Luke Brugnara Case: Stolen Art, Mail Fraud and $11 Million

I came across a case recently involving Luke Brugnara

Luke Brugnara is a former real estate investor who managed to attract media attention to himself over the years first with his bombastic claims about his personal wealth, then with his conviction for tax evasion and trout poaching, for which he was sentenced to 30 months and 15 months, respectively. It seems like Brugnara may have been at it again, ashe has been charged with mail fraud for an alleged attempt to steal $11 million worth of artwork. Let’s take a look at the case and at why the U.S. has established such strong mail fraud laws.

Luke Brugnara Case

Brugnara allegedly told an art dealer that he wanted to buy several works of art for a rough total of $11 million. He agreed to pay $7.32 million for 16 Willem de Kooning paintings, $3 million for a sculpture by Edgar Degas, $450,000 for a George Luks painting, $160,000 for a Joan Miro drawing and $145,000 for an etching by Pablo Picasso. Apparently, he told the dealer that he was planning on opening a museum in San Francisco. When she said that she hadn’t heard of any new art museums in the city, he changed his answer to Las Vegas.

The Plot Thickens

If that wasn’t enough to set alarm bells ringing, the art dealer claims that she asked for some of the money up front – more than reasonable for a transaction of this size. Brugnara allegedly claimed that he shouldn’t have to pay a deposit because an earlier transaction went off without a hitch.

Inexplicably, the dealer elected to send the art anyway, which arrived at Brugnara’s San Francisco home April 7, along with the dealer, who came to ensure that the art arrived undamaged. Brugnara was apparently surprised by the arrival of the dealer along with the art, and the dealer, in turn, was surprised that he ordered $11 million worth of art be stored in his garage. Brugnara allegedly told the dealer that he was too busy to open and check on the art for several days, before telling her to deal with his attorney. He then told his attorney that the art was given to him as a gift.

Brugnara appeared in court June 11 for arraignment, preliminary examination and a bond hearing.

Mail fraud in the U.S.

The reason that this case is proceeding with the charge of mail fraud, and not simply theft, is that the U.S. Postal Service was used as the intermediary. The mail fraud statute was enacted in 1872 after an increase in post-Civil War mail fraud – so clearly the problem has been around for some time.

The basic problem is that it’s beneficial for the country to be able to conduct business remotely, but without an in-person exchange, it is difficult to trust people. If you send goods or money, how do you know that the other person won’t simply stop writing back? For this reason, mail fraud is a serious federal crime, which carries a maximum 20 year jail sentence.

In order for a defendant to be convicted of mail fraud – which falls under 18 U.S.C. 1341 – the following must be proved:

• The defendant engaged in a scheme to defraud.
• The scheme involved misstatements or omissions.
• The scheme resulted in a material loss, or would have upon completion.
• The defendant used the U.S. mail service in the scheme.

If the allegations against Mr. Brugnara are true, the plaintiff’s attorneys have a strong case for mail fraud, in my opinion.

If you have any questions about this post or would like to discuss your sports and entertainment matters , please contact me, Anthony R. Caruso at www.ScarinciHollenbeck.com.