"Museums Suspected in Tax Fraud, Stolen Artifacts"

MICHELE NORRIS, Host:

Federal agents executed four unusual raids yesterday in Southern California. They were looking for stolen antiquities in museums. The raids are part of a multi-year effort to track down Asian and Native American artifacts in the collections of public museums.

From member station KPCC in Los Angeles, Adolfo Guzman Lopez reports.

ADOLFO GUZMAN LOPEZ: Nearly every store on this west Los Angeles block sells contemporary art, furniture or antiques. The Silk Roads gallery specializes in East Asian antiquities. A 300-year-old wooden Chinese Buddha stares through the window. Its price tag is close to $20,000. But yesterday, the gallery's doors were locked. In the alley behind the store, federal agents carted away items and placed them in a trailer labeled A-Sharp Piano Movers. Internal Revenue Service investigator, Peter Lu, read from a prepared statement that listed the federal agencies involved, including Immigration and Customs Enforcement or ICE.

NORRIS: IRS Criminal Investigation in conjunction with other federal law enforcement agency, including ICE, National Park Service, is present at the location, executing a federal search warrant.

GUZMAN LOPEZ: Affidavits filed in support of the warrants say the owners of the gallery, Cari and Jonathan Markell, received looted artifacts smuggled out of Thailand and China by an associate named Bob Olson. William Webber, a cultural property expert in the London office of the Art Loss Register, which tracks stolen art, says demand for Asian artifacts is growing.

NORRIS: Cultural properties from the Southeast Asia and East Asia is becoming far more collectible. And the objects that are particularly collectible were usually the objects that have come from burial sites and excavations that would have ideally have full providence. But that's not often the case.

GUZMAN LOPEZ: The investigation appears to have begun about five years ago when an undercover National Park Service agent was looking for Native American artifacts looted from sites in New Mexico. According to the affidavits, Bob Olson and the Markells sold artifacts from Thailand to the undercover agent and then arranged to have the agent donate the antiquities to the museums. The affidavits state that the artifacts were appraised for more than their sale price so that the agent could claim tax deductions to which the agent wasn't entitled.

The scheme involved the Pacific Asia Museum in Pasadena, The Bowers Museum in Santa Ana, San Diego's Mingei International Museum, and the Los Angeles County Museum of Art. The affidavit claims that Jonathan Markell said the L.A. museum had found a loophole to accept questionable antiquities. At a press conference yesterday, the museum's director, Michael Govan, responded to that allegation.

NORRIS: There is no loophole that we know about. If anyone could identify one, we would be the first to close it. We know nothing, nothing about that at all.

GUZMAN LOPEZ: But the museum knows quite a bit about the Markells. They're members of the museum, and they've donated about 60 works of art in the last decade. Govan says his institution has policies to track the origins of donated antiquities. But William Webber of the Art Loss Register says some works can be untraceable.

NORRIS: If objects have come freshly out of the ground and moved over to the collecting market, then it's impossible to, to track them down. In areas like Cambodia and Myanmar, objects will often be excavated and pulled across the border, in this case, to Thailand, where laws are a little more relaxed and exporting objects is slightly easier.

GUZMAN LOPEZ: San Diego's Mingei Museum and Santa Ana's Bowers Museum say they're cooperating with the investigation. The Pacific Asia Museum did not return calls seeking comment. The U.S. attorney's office has not filed charges or made arrest. It could take more than a week, according to one federal official, to comb through the seized items.

For NPR News, I'm Adolfo Guzman Lopez in Los Angeles.