Ronald Coles, one of Australia’s leading art dealers, is at the center of a police investigation involving the loss of millions of dollars worth of artworks and financial investments. Coles disappeared owing hundreds of investors more than AUD 30 million (USD 20.9 million). The dealer was last seen in late January, when he abruptly canceled a three-day D’Arcy Doyle exhibition in Geelong, a city south of Melbourne.
Ronald Coles Investment Gallery, which in previous years enjoyed an annual turnover of AUD 20 million—Coles drove a Bentley with the license plate BUY ART—invested in art on behalf of clients, many of whom used their superannuation funds (government-mandated pension funds known as super-funds) to create art portfolios. Coles bought, stored, exhibited and sold the art for a profit on their behalf, re-investing the profits in further works of art. Australian tax law requires that art bought through self-managed super-funds must be stored separately from personal assets.
On January 18, Sydney’s The Sun-Herald newspaper revealed that several clients who invested heavily through Coles in works by Australian artists, including 20th-century painters Arthur Streeton, Tom Roberts, Sir Sidney Nolan and Brett Whiteley, had no idea where their art or money was, or whether Coles had sold the art. One disgruntled customer instigated court action against Coles in December 2008 and, in response, Coles liquidated two of his companies and filed for bankruptcy.
Three days later, on January 21, police raided the Ronald Coles Investment Gallery and two other private residences in which Cole’s family members were living in rural Kenthurst, 45 minutes north of Sydney. Investigators discovered a truck loaded with 107 paintings that had stopped outside the nearby home of Coles’ step-daughter. A search of the three properties and the truck located 404 paintings and, allegedly, a number of firearms. Many of the seized paintings, initially valued at AUD 5 million (USD 3.4 million), are believed to be subject to multiple ownership claims from creditors, investors and owners. The total value of the missing artworks is said to be in the region of AUD 23 million (USD 16 million).
New South Wales police commissioned auctioneer Tim Goodman, of Sydney auction house Bonhams and Goodman, to store the seized art and create an inventory. In a curious twist to the story, Goodman declared that many of the seized works are worthless, painted by artists with no reputation and which he valued as low as $200 each. The Australian Financial Review reported that there are no Whiteleys or Streetons, other than three with forged signatures. Also there are several fake Pro Harts and more than a dozen imitation David Boyds (the brother of landscape painter Arthur Boyd), as well as paintings signed by Coles himself in the manner of Arthur Boyd, Whiteley and Sidney Nolan. Other canvases were painted with varnish to suggest aging.
Investigators now believe—and Coles’ clients hope—that there is an as-yet undiscovered cache of valuable paintings by big-ticket names against which Coles supposedly secured loans. Far from being worth AUD 5 million, Goodman valued the collected 404 works at somewhere between AUD 350,000 and AUD 580,000 (USD 244,000–404,000).
There is no evidence that Coles himself has been faking paintings and his solicitor Peter Zacharatos was quoted as saying, “He [Coles] strongly denies dealing in fakes.”
The Sun Herald reported that one Coles investor, Bruce Bushell, bought several paintings for AUD 80,000 by the self-taught Australian landscape painter D’Arcy Doyle. The article in the Sunday paper also alleged that only one of the Bushell Doyles is an original. Bushell refused to comment when approached by ArtAsiaPacific.
Coles is a fixture on the horse-racing circuit of New South Wales and several creditors are said to be involved with the horse-racing industry. They were described by one source who asked to remain anonymous as, “colorful identities, people you wouldn’t want to meet in a dark alley.”
New South Wales police, who are currently taking statements from hundreds of investors caught up in the Coles scheme said: “Inquiries are still ongoing and we are still seeking Mr. Coles.” At the time of writing, police have laid no charges and investigations by the Australian Securities and Investments Commission are ongoing. Coles’ whereabouts remain unknown.
Coles did not respond to emails and the investment gallery’s telephone is disconnected. The domain name for the Ronald Coles Investment Gallery is no longer registered. Tim Goodman of Bonhams and Goodman also did not return calls. Peter Zacharatos, Coles’ Sydney solicitor, also refused to talk to AAP, but has been quoted as saying in early March that Coles, “is not in hiding, he’s been in contact with police.”