ORLANDO MUSEUM OF ART BASQUIAT EXHIBIT: The Juiciest Story in Florida?

Late Friday evening, February 18, I sent an email to Joann Walfish, the Chief Financial Officer of the Orlando Museum of Art detailing the preliminary results of my investigation into the true identities of the men described in media reports as a “Massachusetts treasure hunter” and his “financial backer”.

In my opinion, the origin story proffered by two men behind the trove of 25 “lost” Jean-Michel Basquiat paintings, described by the Museum’s Director, Aaron De Groft as “worth millions”, was fatally compromised.

Later today, I will have more exclusive revelations.

(I have removed my private email address, while publishing Walfish’s publicly-available Museum email.)

The rest of the email message follows:

The discounted stock, some obtained for as little as a dime, was then funneled into accounts shared by Mangan, Curtis and Masley in Canada and Britain and later sold at prevailing stock market prices, the indictment said.

Comprehensive’s connection to the massive stock fraud scheme began in mid-1993 when Leo J. Mangan was named the company’s chief operating officer.

What investors did not know, and what should have been revealed in SEC filings, was that Mangan had a criminal record, including eight arrests, the earliest dating to 1972 and the most recent in 1991. Most of the arrests involved drug possession and distribution.

Mangan’s two colleagues, Grant Curtis and Timothy Masley, had their own questionable backgrounds. Curtis had been convicted of bank fraud in 1994 and, according to Business Week, Masley was a “former broker with North American Investment Corporation, a controversial Hartford brokerage firm that ceased operation in 1988 amid stock-manipulation investigations and a class action by investors. … his record with the National Association of Securities Dealers shows disciplinary problems, including a suspension.”

According to the Wall Street Journal, the three men controlled Comprehensive, as well as Alter Sales Co., a Florida auto parts company, by issuing stock to “bogus companies around the world that were allegedly created by co-conspirators Ray Irangy and Pedro Gomez to hide the group’s control of the two companies, the indictment says. The phony foreign companies purportedly rendered services in exchange for the stock, but the indictment says they never did.”

The indictment also charged Grant Curtis and Leo Mangan (who have previous convictions for bank fraud and drug trafficking) of issuing death threats to people suspected of reported the scam to SEC authorities.

In essence, the scheme called for a reverse split of the company’s stock, which reduced the number of shares in the marketplace, thus raising its price. The group then issued millions of shares of stock to themselves for little or no consideration, some of which were used to procure favorable television coverage to pay brokers to tout the stock.

“But investors didn’t learn about the new shares until months later, when the moves showed up in the company’s quarterly SEC reports,” reported the Wall Street Journal. According to Business Week, “Mangan hired stock-promoter Donald Kessler, an acquaintance, who was reputed to have an ability to get plugs from his close friend Dan Dorfman. On April 18, [1995,] Dorfman gave a positive CNBC report on Alter. … About that time, Kessler became CEO of Comprehensive.”

Another member of the Comprehensive was a rogue SEC enforcement attorney named James W. Nearen.

Business Week reported that, according to a federal indictment, in 1994, “Nearen began looking for work in the private sector. He approached a brokerage, which sources say was Chatfield Dean & Co., an Englewood (Colo.) penny-stock firm that then was the target of an SEC probe. To ingratiate himself, Nearen allegedly fraternized with the ‘lead target’ at the firm and disclosed nonpublic information to help the target firm defend the SEC action. That same year, Nearen became involved with the probe of Comprehensive Environmental.”

In 1995 he left the SEC to work with Comprehensive as “a special regulatory consultant.”

In February 1995 Comprehensive completed a 1-for-10 stock split. Then in June 1995 the little-known company caught the attention of the press when the price of its stock increased by 50 percent over the course of two trading sessions on heavy volume.

The company issued no news to account for the sudden interest, although Mangan noted that “business is booming,” and the chairman maintained that Comprehensive was “the most undervalued stock on the exchange.”

It was later determined that from 1994 until October 1996, Comprehensive issued more than four million shares of stock to participants in the stock manipulation scheme. Ultimately, seven people pleaded guilty and were imprisoned for their role in the fraudulent activities surrounding the company, with the various charges including stock fraud, income tax evasion, insider trading, and money laundering. Dorfman was never charged with a crime.

Leo Mangan pleaded guilty to three criminal counts and accepted five years of probation to settle allegations of defrauding investors and not telling securities regulators of his 1979 and 1991 federal drug-trafficking convictions.

Name: LEO JOHN MANGAN

Register Number: 22211–013

Age: 66
Race: White
Sex: Male

Released On: 06/26/1998

In 2006, under the assumed name “Lee Tucker”, Mangan and his wife, Michelle (using the alias “Michelle Tucker”) ran two Colorado-based debt reduction companies, “Debt-Set” and “Resolve Credit Counseling, Inc.”

“Tucker”/Mangan and Michelle bought a $1.5 million home northeast of Boulder in 2005.

In late 2008, a limited liability company registered by Michelle Mangan bought Resolve Credit Counseling’s 1327 Spruce St. building in Boulder for $3.8 million.

A lengthy list of checks the Mangan/Tuckers wrote to themselves or each other from company accounts included a $100,000 check Michelle Tucker wrote herself in December 2008 and a check from company accounts in January 2009 to cover the couple’s $175,000 tax bill, the FTC alleged.

Meanwhile, the debt-consolidation company generated a complaint a month with Denver-Boulder Better Business Bureau.

The nonprofit agency rated Debt Set “unsatisfactory” but kept working with it to try to improve its customer service, said Susan Liehe, the bureau’s vice president of public affairs.

“We had several years of working with them,” she said, adding that it wasn’t the bureau’s finest hour. “For a while, the company had been promising us in writing to fix things. … We didn’t see that they really improved.”

Consumers were also complaining to regulators in New York, Iowa, Texas, California and Tennessee, according to correspondence submitted as evidence by the FTC.

According to a complaint filed in March 2007 by the Federal Trade Commission, the Mangans sold debt reduction services through Web sites and television and radio advertisements with claims such as “Reduce Debt Now” and “Eliminate Harassing Calls.”

When consumers called a toll-free number, the complaint alleged, they were encouraged to enroll in a “debt consolidation program” if their unsecured consumer debt was up to one month overdue, or a “debt settlement program” if overdue longer.

The Federal Trade Commission accused the couple, well as their businesses and business partners, of disguising fees and misrepresenting their services to debt-saddled consumers in an operation that has generated a litany of complaints across the country since 2004.

The result, the FTC alleges, was consumers who — after being promised no upfront fees for the service — paid hundreds of dollars and saw what they owed grow instead of the creditor relief promised in radio, television and Internet ads.

Debt Set and Resolve Credit Counseling employed teams of telemarketers at their two downtown Boulder offices, in the basement of 2060 Broadway and at 1327 Spruce St. In early August 2009, the FTC froze the companies’ assets as well as those of the Tuckers and business partners William Riggs and Isaac Khan, also known as Issac Klan or Ishaq Mohammad Khan.

The freeze was necessary, the FTC asserted in court filings, because the Tuckers spent company funds lavishly and Lee Tucker had a criminal background that included disguising financial transactions.

A settlement was reached with the SEC on February 14, 2008, prohibiting the defendants from engaging in the violations alleged in the complaint, and require them, when making representations about specific debt reductions they can achieve, to disclose truthfully key terms of the program: all fees and costs they charge, including when and how such fees and costs will be paid by consumers; the approximate time period before settlements will be achieved; and the fact that consumers’ balances typically will increase before settlements for all accounts are achieved.

Mangan paid $40,000, and Resolve Credit Counseling and Michelle Tucker (Mangan’s wife) have collectively paid $350,000.

In 2014, Mangan, along with Michael William Force, John “Jovian” Re, and Force’s wife (Taryn Burns) were sued in the Central District of California by Anders Karlsson. Alleging the defendants set up “fraudulent investment schemes involving fake or forged artworks, attributed to Pollock and de Koonig”, Karlsson alleged breach of a Joint Venture Agreement (“JVA”) between Karlsson and Defendants Raven Art, Inc., Mangan, and Force.

Pursuant to the JVA, Karlsson purchased a Jackson Pollock painting for $1,000,000, in which Karlsson maintained a 23.5% interest. The Raven Art Defendants represented the Pollock to be authentic and, according to Karlsson, he relied on their representations when purchasing the painting.

In a court filing, Karlsson alleged that “Mangan and Force saw an opportunity to cash in on a series of hoaxes and frauds with Plaintiff as victim. They engaged their efforts via two clusters: (a) the New York-based John Re phony Pollocks, in which Mangan and Force were the front men and promoters of the fraud; and (b) the California based Force-Burns-James manipulations of numerous artwork frauds. In each of these, Force would operate via his company Art Force, LLC and Mangan would operate via his company Art Possible, LLC.”

Karlsson alleged that “Mangan and Force worked together via their jointly controlled company, RavenArt, Inc.”.

On May 19, 2015, the Court granted John Leo Mangan, Art Possible, LLC and Raven Art, Inc.’s motion to dismiss Karlsson’s “Second Amended Complaint” and awarded the defendants nearly $92,000 in attorney’s fees.

It turns out Karlsson may have been right about those “New York-based John Re phony Pollocks.”

On December 1, 2014, John “Jovian” Re, an East Hampton, New York resident, pleaded guilty at federal court in Manhattan to one count of wire fraud, defrauding victims of $2.5 million in a nine-year scheme to sell phony art purportedly created by masters such as Jackson Pollock and Willem de Kooning, prosecutors said.

John Re, 54 at the time, faced up to 20 years in prison and was ordered to forfeit $2.5 million and not sell the former USS Quest, a submarine he acquired with the proceeds of the fraud, until the debt is paid off, according to court federal records.

Between 2005–2014, Re invented false provenance for dozens of paintings and sketches by famous artists, telling some victims of the scam that the art had been found in a home belonging to a former acquaintance of the artists.

Prosecutors said that Re continued to peddle the phony art after works he sold had been repeatedly de-authenticated by forensic experts, and on at least one occasion threatened a victim who confronted him with violence and claimed an organized crime connection.

Prosecutors said for nine years beginning in 2005, Mr. Re tricked art collectors by creating a false provenance, the document that shows the history of a piece of art.

He bought the submarine, which he called the Deep Quest, with the proceeds from a fake Pollock painting.

Mr. Re continued to sell the imitations even after appraisers determined they were not authentic, prosecutors said. In one case, they said, when a victim confronted Mr. Re, he threatened violence, claiming that the person should be wary of his alleged connections to organized crime.

Although Re faced up to 20 years in prison, he served roughly five years and was released from prison on August 14, 2019.