ONE of Australia's former leading art dealers, Ronald Coles, faces up to 10 years in jail after he was arrested and charged yesterday with 87 offences relating to an alleged multimillion-dollar investment art fraud scheme.
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At the height of his success in the mid-'90s, the flamboyant Sydney dealer drove a Bentley, mixed with celebrities and boasted an annual turnover of more than $20 million.
But for 18 months, the 64-year-old has been avoiding disgruntled creditors and driving taxis on the central coast while awaiting the outcome of an ''extremely protracted and legally intricate'' investigation by NSW Police into his business affairs.
Mr Coles was ordered to attend Gosford police station yesterday. He was charged under the Crimes Act with 77 counts of larceny as a bailee and another 10 counts of cheating and defrauding as a director.
Police will allege that Mr Coles sold more than 30 paintings stored at his Kenthurst gallery without the permission of the owners of the works.
It is also alleged he created multiple owners of the same works, selling paintings to investors while not divulging details about the numerous other owners. The 87 charges relate to losses of more than $8 million to 43 clients nationwide.
One creditor, Di Allen, bought a Norman Lindsay painting in 2008, unaware that two other people had also allegedly bought it from Mr Coles. She was overcome with emotion when she heard of Mr Coles's arrest.
"A lot of people have lost a lot of money and while I think we all know we're never going to get it back, I'm delighted we're finally going to be heard in court."
For more than 30 years, Mr Coles specialised in fine art by some of Australia's most celebrated artists, including Arthur Streeton, Eugene von Guerard, Brett Whiteley and Lindsay.
He advertised on national radio and television, offering clients an opportunity to boost
their life savings by investing in art, which he bought, exhibited and sold on their behalf - using their superannuation funds.
But under the requirements of the Superannuation Industry Act, artwork bought with super funds may not be stored by the purchaser. So in most cases, Mr Coles retained the art.
The police set up Strike Force Glasson in January 2009 after a Fairfax investigation unearthed two Supreme Court actions and dozens of investors who were missing millions of dollars worth of art and money, all allegedly held by Mr Coles who had been unreachable for some time.
Police raided his boarded-up gallery at Kenthurst and two other addresses, seizing more than 400 paintings, worth an estimated $6 million. As fraud squad detectives chipped away at the complex inquiry, angry investors continued their search for Mr Coles. By now receivers were so desperate to claw back cash, at one stage they wrongly placed a caveat on the home of a Queensland woman who had the same name as Mr Coles's wife.
Individual creditors had grown so impatient at a perceived lack of police progress, they hired private investigators to find Mr Coles.
In October 2009, The Sun-Herald tracked him down to a central coast hideaway. "Why do you think I'm living like this in a small flat doing night-time taxi work?" he asked. "I'm also a victim in all this.''
After a brief appearance in Gosford Local Court, Mr Coles was granted conditional bail of $100,000 without deposit but is being held in Corrective Services custody until his family produces proof of funds.
Police will retain his passport and he will appear before Parramatta Local Court on March 15.
