FBI investigating Kinkade, popular 'painter of light,' dealers say

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By The Los Angeles Times

 The FBI is investigating allegations that self-styled “Painter of Light” Thomas Kinkade and some of his top executives fraudulently induced investors to open galleries and then ruined them financially, according to former dealers who have talked to agents.

The criminal probe focuses on the same issues raised in civil litigation by at least six former owners of Thomas Kinkade Signature Galleries. Those ex-owners alleged, among other things, that the artist known for his dreamily luminous landscapes and street scenes used his Christian faith to persuade them to invest in the independently owned stores, which must sell Kinkade’s work exclusively.

Kinkade spokesman Jim Bryant said Monday that the Morgan Hill, Calif., company was unaware of a criminal investigation and had not been contacted by the FBI or U.S. attorney’s office.

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Painter and businessman Thomas Kinkade is being investigated by the FBI, art dealers say.

Painter and businessman Thomas Kinkade is being investigated by the FBI, art dealers say.

“The Thomas Kinkade Co. asserts that there is no legitimate grounds for a federal investigation of any kind,” Bryant wrote by e-mail.

After investing tens of thousands of dollars, or more, former gallery owners said the company’s unfair practices and policies drove them out of business. They alleged they were stuck with unsalable limited-edition prints, forced to open additional stores in saturated markets and undercut by discounters that sold identical art works at prices they were forbidden to match.

Some also have accused Kinkade — touted as the most widely collected living U.S. artist — of scheming to devalue his public company, Media Arts Group Inc., before taking it private two years ago for $32.7 million as Thomas Kinkade Co.

Although ary critics have been less than generous with their praise, and sometimes openly derisive of his work, that has not deterred the multitudes who pay from a few hundred dollars for paper prints to more than $10,000 for canvas editions he has signed and retouched.

The FBI investigation comes on the heels of the company’s first big legal setback in dealer litigation. In February, an arbitration panel awarded $860,000 to the former owners of two failed Signature galleries.

The panel ruled that the company and one of its executives, Richard F. Barnett, “failed to disclose material information” that would have dissuaded Karen Hazlewood and Jeffrey Spinello from investing $122,000 to open the first of their two Virginia galleries in 1999.

The arbitrators, in a 2-1ruling, also found that Kinkade and other company executives used the artist’s familiar Christian-oriented themes to create “a certain religious environment designed to instill a special relationship of trust” with the couple, who have since divorced.

“It was a program of lies and deception, predicated on Christian values that weren’t there,” said Joseph Ejbeh, the Michigan attorney who tried the arbitration case.

Bryant, the Kinkade Co. spokesman, said the company is confident the interim arbitration ruling will be overturned.