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Chagall painting stolen from New York apartment recovered by FBI after 30 years

"Othello & Desdemona," an oil painting by Marc Chagall completed in 1911. The 13-inch by 16-inch painting was estimated to be worth about $100,000 when stolen from Ernest "Pick" S. Heller and Rose "Red" F. Heller in 1988.

April 12, 2018 04:35 pm Updated: April 12, 2018 04:36 pm

An oil painting by Marc Chagall stolen from a New York City apartment has been recovered by the FBI and is expected to fetch several hundred thousand dollars at auction three decades after it went missing, the U.S. attorney's office of Washington and its owners' estate said.

The theft was "an inside job" by a temporary employee who had access to the apartment building in Manhattan's stately Sutton Place neighborhood when the owners were on vacation, FBI art crimes unit and Washington Field Office Special Agent Marc Hess said.

A Maryland associate of the thief who acquired the work after a dispute tried to sell it last year - still labeled with the names of its true owners, "Mr. + Mrs. E.S. Heller, New York." A Washington art gallery owner balked, however, because the piece lacked documents proving ownership and referred the would-be seller to the FBI, prosecutors said in a court filing Thursday.

The filing asks a court to approve returning the work to the Hellers' estate, which intends to sell it at auction to benefit charities and refund the insurance carrier's payment estimated at about $100,000 at the time.

A feud between the thief and a middleman with ties to Bulgarian mobsters, eventually led to the recovery of the 13-inch by 16-inch painting, one of 14 works stolen in the 1988 heist, the FBI and federal prosecutors said.

Because the investigation and efforts to recover the other 13 paintings continue, the suspects are not identified in the court filing, which suggests at least is cooperating in the case.

Both suspects are now in their 70s and may be motivated by "coming to your end times and wanting to set the record straight," Hess said. The cooperation is "not a (deathbed) confession" Hess said, but may be the associate's attempt to even the score with a thief he believed double-crossed him on a promised fee to find a buyer for the stolen Chagall through "connections with Bulgarian organized crime," as court papers describe the criminal network.

"I would say old rivalries die hard, and it's never too late to get your revenge," Hess said.

The building employee was convicted in federal court in Manhattan in connection with other art thefts from residences on charges of interstate transport of stolen property and mail fraud, court filings state without providing more details.

The employee approached the associate in the late 1980s or early 1990s, when the associate then lived in Virginia.

The two argued over the associate's fee, setting off a decades-long grudge and the attempt last year to sell the painting on his own, according to the saga in the court filings.

The associate by then was in Maryland and had stashed the Chagall for years in a specially made wooden crate, before approaching the gallery in Washington.

None of the other items stolen from the Hellers have been found, but "of all the works that could have been recovered, this is the one that would have pleased them the most," said Alan Scott, the Madison Avenue attorney who handled Ernest "Pike" Heller's estate and is the executor for Rose "Red" Heller, nicknamed after her hair.

Ernest Heller was a jeweler and pearl importer who died in 1998 at 95 after a lifetime of expanding his inherited collection of paintings, jewelry, sculptures, silverware and carpets. Rose Heller died at 105 in 2003.

"They were the quintessential old married couple," recalled Scott, who met the couple in the late 1980s before the theft, "They told it like it is to each other. And they got along well with everyone, particularly Red .... and they had a very active social life."

In a 1988 article reporting the $600,000 theft of all the items, Ernest Heller said he prized most "Othello and Desdemona, " one of Chagall's early Paris works, depicting the jealous title character from William Shakespeare's play holding a sword in a threatening pose over his doomed wife.

"I liked them all, but the Chagall was a very interesting one because it was a 1911 painting," Heller said.

Heller was about 8 and living in Paris when his father, a jeweler named Samuel Heller, bought the painting from Chagall, who was one of several artists in his family's social circle, said Scott.

It remained in the family and part of the collection that came to fill the Hellers' New York prewar three-bedroom apartment along with works by French painters Pierre-Auguste Renoir, George Rouault and Fernand Leger, the Italian Amadeo Modigliani and the American Edward Hopper. The Hellers also acquired Asian and pre-Columbian pottery.

Chagall, a Russian-French painter and Modernist pioneer, became a preeminent Jewish artist of the 20th century but was little known in 1911, having arrived in Paris just the year before.

Chagall thought enough of "Othello and Desdemona" that he suggested the Hellers offer a Zurich art museum a chance to include it in a 1967 retrospective of his work. It was exhibited and that June, Heller politely rebuffed a Basel gallery owner who asked whether the painting was for sale.

"Under the circumstances we would not like to part with it," Heller wrote, citing its "great sentimental value" after almost 50 years in his family, according to correspondence kept by Art Recovery International, a private firm employed by the Hellers' insurance company that recovers stolen and looted art.

The Hellers were longtime art and music patrons. Ernest Heller, who graduated from Princeton University at age 19 and joined the family jewelry business importing Mikimoto pearls before retiring in 1975, learned Chinese and became a trustee of the New York City Center, a forerunner of the Lincoln Center, according to his university alumni death notice.

Rose Heller, served on the boards of several U.S. contemporary music organizations, supporting festivals in Aspen, Colo., and Tanglewood in Massachusetts, and raised more than $1 million for the MacDowell Colony, which has supported more than 7,700 artists in residence since 1907 including Aaron Copeland, James Baldwin, Leonard Bernstein and Alice Walker.

Art investigators said it is not unusual for thieves to try to sell a painting over the span of many years, whether to an established business or through a formal but illegal network or ring.

In the case of the Chagall piece, various sales approaches by the Maryland associate failed before he finally called the FBI asking if there was a reward out for the stolen painting, said Hess and Tim Carpenter, who oversees field programs for the FBI art crimes unit that has about 150 pending cases.

There was no reward but agents confirmed the work was stolen using FBI and Interpol stolen art databases.

"There's no harm in asking if there is a reward, because sometimes there are rewards posted by insurance companies," either publicly or privately, said Art Recovery International's chief executive, Christopher Marinello. But not for anyone holding back an art piece or information for ransom, which is extortion, Marinello said.

U.S. prosecutors in Washington working with the FBI filed a formal civil forfeiture claim for the painting in federal court on Thursday to return the painting to the estate.

If the court agrees later this year, the painting is to be sold at auction, with proceeds going to refund a payout by the Hellers' insurance company and any remainder to charities named by their estate, 80 percent for the MacDowell Colony and 10 percent each to Columbia University and New York University Medical School, said Assistant U.S. attorney Zia Faruqui.

Marinello said the Heller painting has an "excellent provenance" but awaits formal blessing from the Chagall committee in Paris, to which it will be submitted before auction for examination and authentication.

The Isabella Stewart Gardner Museum in Boston offered a $10 million reward in the 1990 theft of 13 works valued at half a billion dollars, Marinello said, while there is also a "sizable" bounty for one of two Aston Martin D5s used in the James Bond film "Goldfinger," stolen from a Boca Raton airfield in 1997.

Marinello said collectors, sales rooms, auction houses and dealers to can check items offered for sale against databases of stolen art maintained by the FBI, Interpol and Artive, a nonprofit group.

"The art market is reluctant sometimes of course to perform due diligence because that tends to get in the way of earning profits," he observed. "There are lot of people that do the right thing, I don't want to be critical of the entire art trade, but when someone comes to them with a painting that doesn't have proper paperwork, one has to be suspicious."