Tuesday, December 18, 2012

"Maintaining Plausible Deniability": Prosecutors in Sotheby's Duryodhana Case Charge Sotheby's with Avoiding Mention of the Alleged Theft of the Cambodian Statue


Prosecutors rebuked Sotheby's last Friday, accusing the New York auction house in a reply memorandum of failing to disclose information it knew about a Duryodhana statue offered for sale this past spring.  Prosecutors charge the New York auction giant with issuing misinformation to prospective sellers; skirting claims that the statue was stolen from Cambodia in 1972 and trafficked to Thailand; and making unsubstantiated assertions in its last court filing.

Governments lawyers write that "Sotheby's behavior is that of a company seeking to sell an artwork it knew was stolen, while maintaining plausible deniability should the true owner or the authorities become aware of the truth.  Accordingly, it supports the reasonable inference that Sotheby's knew the Statue was stolen, or at least suspected it and closed its eyes to the truth."

The U.S. Attorney's Office for the Southern District of New York filed the reply memo on December 14 to rebut arguments made recently by Sotheby's and Decia Ruspoli di Poggio Suasa, the claimants in United States of America v. A 10th Century Cambodian Sandstone Sculpture.  Readers will recall that federal prosecutors in November filed a petition to amend their original forfeiture complaint after the district court expressed skepticism.  The government seeks to forfeit and repatriate the statue to Cambodia, a sculpture originally from the Prasat Chen temple at Koh Ker and now sitting at the Sotheby's auction house in Manhattan.  

Daniel Patrick Moynihan Courthouse
Creative Commons: Americasroof
The claimants oppose the forfeiture.  They insist that the statue is not stolen property that must be forfeited.  Prosecutors disagree, arguing in their reply memo that "Prasat Chen was ...  the property of Cambodia in exactly the same way that the Daniel Patrick Moynihan United States Courthouse is the property of the United States."  Federal lawyers add, "If Sotheby' s wishes to argue that it was duped ... as a result of a negligent failure to investigate the representations of obviously self-interested parties regarding a statue with numerous indicia of theft, that is an entirely valid argument on the merits."

The prosecutors argue  in their reply memorandum to the court:

"The [government's] proposed amended Complaint adds crucial new allegations that go to the heart of this action.  Most importantly, it contains allegations regarding the theft of the Defendant in rem (the "Statue") from Koh Ker in 1972 by an organized looting network, which transferred it to Thailand. There, it was knowingly acquired from the looting network by a well-known collector of Khmer antiquities (the "Collector").  The Collector in turn sold the Statue in 1975 to the former husband of Claimant Decia Ruspoli di Poggio Suasa ("Ruspoli") on the international art market through an auction house which was also entirely aware of its illicit origin.  These allegations conclusively answer the arguments previously advanced by Claimants Sotheby's Inc. ("Sotheby's") and Ruspoli that the Statue could have been stolen by anyone at any time in the last thousand years.  Moreover, the new allegations in the Amended Complaint demonstrate that Sotheby's communicated closely with the Collector during the sale process, knowing him to be the original seller of the Statue, but failing to disclose that information to other interested parties, while also inaccurately informing such parties that the Statue had been seen by numerous people in the United Kingdom in the late 1960s, at least three years before it was stolen from Koh Ker.

"Claimants fail to acknowledge the significance of these new allegations, and indeed go to great lengths to avoid mentioning the facts concerning the 1972 theft of the Statue in their Memorandum of Law in Opposition to the Motion ("Clmt's Br.").  Instead, Claimants largely focus on various documents and unsupported attorney assertions regarding Sotheby' s supposed intentions that they themselves admit are entirely improper for the Court to consider. (See Clmt's Br. at 2 n.1 (Claimants "do not ask the Court to rely on emails" they attach); 13 (Claimants "do not ask the Court to rely on materials" they go on to discuss at length).)  The Court should, of course, disregard these sections of Claimant's brief entirely.

"As to their actual bases for denial of the motion, Claimants argue that the Motion is futile because it would not survive a motion to dismiss on three grounds.  First, Claimants argue that the Statue was not actually owned by Cambodia at time of the theft.  As described in detail below, the Statue was owned by Cambodia in 1972 pursuant to clear and unambiguous national ownership laws.  Second, Claimants again assert their frivolous argument that British law rendered the Statue no longer stolen six years after the 1975 sale.  As made clear by their very own expert in British law, Claimants bear the burden of proof on the relevant issue even if British law actually applies, and so they cannot prevail on a motion to dismiss.  Third, Claimants continue to assert that the allegations regarding their knowledge that the Statue was stolen are insufficient.  The factual allegations in the Amended Complaint are more than sufficient to show that Claimants knew the Statue was stolen, or at least that they consciously avoided learning the truth about the theft of the Statue.

"Finally, Claimants argue that the Government delayed unduly in filing this Motion, despite being entirely unable to point to any case where a Court found undue delay in similar circumstances.  The Government appropriately filed the Amended Complaint to include facts gathered in the course of its post-Complaint investigation which could 'aid the court in assessing both the adequacy of the complaint and Defendant's remaining arguments in its motion to dismiss.' Michael Miller Fabrics, LLC v. Studio Imports Ltd., Inc., No. 12 CV 3858 (KMW), 2012 WL 4513546, *2 (S.D.N.Y.  October 1, 2012).  Accordingly, leave to file the Amended Complaint should be granted and Claimants' motion to dismiss should be denied as moot.  ld. at *2-3.
....

"The Amended Complaint has clearly alleged sufficient facts to support a reasonable belief that the government will be able to meet its burden of proof at trial by showing that Sotheby' s either knew or consciously avoided learning that the Statue was stolen when it imported it into the United States and attempted to sell it."


This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com

Acknowledgement: Gary Nurkin