Machold

[Don Noon]

From Madoff to Machold...geez.

When will they ever learn?

As soon as there is a world-wide cure for greed.

(i.e. never)

[Roger Hargrave]

One of the points the article makes is that Machold, himself, set the values of the instruments he was using as collateral. Surely the banks would have called in somebody else to confirm Machold's valuations, if not before the loans were made, then when Machold showed himself incapable of meeting his obligations.

No. He set the values and wrote the expertise himself for several banks. Dumb bastards, no wonder the world is in a mess. Now here is another naughty thought - isn't that just what most dealers do for their customers.

[jacobsaunders]

No. He set the values and wrote the expertise himself for several banks. Dumb bastards, no wonder the world is in a mess. Now here is another naughty thought - isn't that just what most dealers do for their customers.

The subtle difference is that you would probably tell me where you had hidden the fake overpriced Hargraveius violin you had sold me, if I got angry enough!

[jacobsaunders]

http://derstandard.at/1308680100467/Geigenhaendler-Dacapo-der-Justiz-bei-vergeigten-Geschaeften

Tomorrows "Dietmar M." article in der Standard (Vienna)

[vlnhunter]

http://derstandard.at/1308680100467/Geigenhaendler-Dacapo-der-Justiz-bei-vergeigten-Geschaeften

Tomorrows "Dietmar M." article in der Standard (Vienna)

I get that they wanted some art for the piece, but did they have to put a picture of the "Lady Blunt" next to this article??? There's a pearls-before-swine reference in the offing...

[skiingfiddler]

No. He set the values and wrote the expertise himself for several banks. Dumb bastards, no wonder the world is in a mess. Now here is another naughty thought - isn't that just what most dealers do for their customers.

The subtle difference is that you would probably tell me where you had hidden the fake overpriced Hargraveius violin you had sold me, if I got angry enough!

One thing isn't clear to me: Do the violins M. was using as collateral actually exist? I've been meaning to consult the books I have to see if there are such violins as the 1725 "Leonardo da Vinci" and the 1688 "Derenberg" Strads, but haven't yet gotten to it.

[jacobsaunders]

I get that they wanted some art for the piece, but did they have to put a picture of the "Lady Blunt" next to this article??? There's a pearls-before-swine reference in the offing...

You don't think he got his sticky fingers on that one then?

[skiingfiddler]

No. He set the values and wrote the expertise himself for several banks. Dumb bastards, no wonder the world is in a mess. Now here is another naughty thought - isn't that just what most dealers do for their customers.

My emphasis, above.

Roger and Jacob,

One of the revelations for me from your posts is that Austria, and, I bet, Germany, too, have state certified experts in string instruments. (At least that's my translation of "beeideten Sachverstaendigen fuer das Fachgebiet Streichinstrumente," a position which Jacob holds.) In America, the state certifies lawyers and medical doctors with the appropriate state exams or state certification process, allowing them to become legally practicing lawyers and doctors. It looks like the Austrians and maybe the Germans, too, have a similar, formal, legally recognized status for violin experts. In the USA, there is no formally, legally recognized expert status for violin experts to attain.

One of the consequences of the Austria/German system for state certification in violin expertise would be, I would think, a separation of legally recognized expert appraisers from those folks who sell instruments. Can someone in Austria or Germany be a "beeideter Sachverstaendiger fuer Streichinstrumente" and also sell instruments? I'm assuming you can't, but that assumption may be very wrong.

Any clarification you folks can offer on the role of Austrian or German state certified violin experts in relation to the violin trade would be very interesting. Maybe it's a system the USA should emulate.

[Flyboy]

One thing isn't clear to me: Do the violins M. was using as collateral actually exist? I've been meaning to consult the books I have to see if there are such violins as the 1725 "Leonardo da Vinci" and the 1688 "Derenberg" Strads, but haven't yet gotten to it.

A "Da Vinci" Strad was used by Nagyvary to compare to his own:

http://classic-web.archive.org/web/20031003034650/http://agnews.tamu.edu/dailynews/stories/BICH/Sep2203a.htm

I have no idea if that's the same "da Vinci" referred to in derstandard.at. But if it is, it'd be pretty funny in more ways than one.

[jacobsaunders]

A translation of today’s “Standard”, Vienna, “Dietmar M.” story, for those unfamiliar with the German Language.

Judiciary makes a Da Capo on fiddled deals

(Caption beneath Lady Blunt picture: The violin disappearances provoking criminal charges from throughout the world)

The Judiciary was investigating jailed violin dealer M. years ago, but ended enquiries in 2009.

M. had, should the accusations made by his customers prove correct, established a sort of Violin-Ponzi-Scheme.

…..

The Judiciary and the Police have investigated the violin dealer Dietmar M., presently detained in Swiss extradition custody before. The Public Prosecutor from Wiener Neustadt had, on the basis of private criminal charges, investigated the suspicion of Breach of Trust and Fraud. These investigations were terminated in February 2009 for lack of sufficient proof, as an official spokesperson has confirmed.

A Da Capo, therefore: Since the end of 2010 the case is being re-investigated by the Public Prosecutor (this time, the one from Vienna) with the suspicion of Fraud, Breach of Trust and bankruptcy offences. Around one hundred violins are being searched for. Last autumn, M. and his Viennese firm filed for bankruptcy, leaving 80 million Euros of claims. Customers from here and abroad (including the National Bank) are searching for violins that they either bought from or entrusted for sale too M. Austrian Banks are searching for instruments which represent 30 Million Euros of loan collateral.

The insolvency administrator, Jörg Beirer has, to date, found merely two fiddles, that are currently being appraised for there value in London. The insolvency administrator, in a letter to the creditors committee, writes “the, from the debtor (i.e. M.) evaluated prices are partly seriously overvalued”. Beirer is assuming an overvaluing from up to three quarters.

Second run-up

In their second stab at this material, the Judiciary have obviously found the soup to be much thicker. They have appointed a bookkeeping expert to scrutinize the returns of the Viennese firm from 2005 onwards. In 2005, M’s Viennese firm reported a result of only 13.515 Euros. The accused, whos’ pecuniary affairs are “not transparent” is accused by the Public Prosecutor of "appropriating instruments with the object of enriching himself”. From the criminal charges of his customers, it is possible to construct how a Ponzi scheme worked. The Standard emphasises that the subject is innocent until proven guilty. M. is contesting the extradition and refuses to impart information on the whereabouts of the missing instruments.

The Dutchman, William L., entrusted the dealer in 2005 with the sale of two violins and a viola estimated at 1,4 million Euros. A cheque, that M. left as a deposit, bounced, no payment has occurred and the instruments are not to be found.

A violin soloist from Brussels, Michael G., is nursing losses of 8 million Euros. He was introduced to M. by a famous conductor. At the end of 2006 he bought 6 instruments (including two Stradivari) for 8 million Euros and hoped to make a quick profit. M. offered to sell the instruments for him for “more than 8,25 million Euros”, any profit above and beyond that to be divided between them. Nothing came of it though: “Mr. M. then took the instruments back to Vienna, and since then they have disappeared”. The musician though “unfortunately” suspects that the Certificate, written in 1936 by the London firm of W.E. Hill (legendary vm.’s and experts) for a Stradivari from 1728, was faked.

Bad luck too for the Dutch married couple K. They bought instruments and accessories from M. – and feel cheated of 20 million Euros.

Castle and Steinway flogged

None of this will be covered from the recovered assets. The sale price of his castle in lower Austria (3,5 million Euros) is almost entirely reserved for the mortgages with Erste Bank and Wiener Neustädter Sparkasse. The castles inventory, estimated at 241.000 Euros (including a Steinway grand piano at 61.000 Euros) has been sold for a total of around 130.000 Euros, including piano.

That the strings on M.’s lively business, despite numerous urgent calls from customers and banks and civil court charges, lasted amazingly long, is even confirmed by his own lawyer in a letter to the insolvency administrator: “My client was able to hide his pecuniary situation extremely well, until the opening of bankruptcy, which allowed him until quite recently to appear wealthy”. (Renate Graber, DER STANDARD; Printed edition, Vienna 1.7.2011)

[robheys]

Hope you don't mind me being pedantic Jacob, but I would like to make a minor correction to your excellent translation. I think the relevant adverb is "appropriating" rather than "obtaining".

I know a lot of players would like to see obtaining violins for profit made illegal, but I think it would be a bit over the top myself.

"The accused, whos’ financial affairs are “not transparent” is accused by the Public Prosecutor of “appropriating instruments with the object of enriching himself”.

Best

Rob

[jacobsaunders]

Hope you don't mind me being pedantic Jacob, but I would like to make a minor correction to your excellent translation. I think the relevant adverb is "appropriating" rather than "obtaining".

I know a lot of players would like to see obtaining violins for profit made illegal, but I think it would be a bit over the top myself.

"The accused, whos’ financial affairs are “not transparent” is accused by the Public Prosecutor of “appropriating instruments with the object of enriching himself”.

Best

Rob

Dear Rob,

I don't find that pedantic at all, I entirely agree with you (and have edited). I find it quite diffucult translating texts with legal jargon and outrageóusly long sentences into understandable digestable english, so thanks for you're help.

Best wishes

J

[jacobsaunders]

http://derstandard.at/1308680218534/Causa-Stradivari-Justiz-ging-Verdacht-auf-Geldwaesche-nach

Money laundering today!

[Flyboy]

http://derstandard.at/1308680218534/Causa-Stradivari-Justiz-ging-Verdacht-auf-Geldwaesche-nach

Money laundering today!

Wow, so Toifl is in also in trouble with the Austrian authorities now. The same cast of characters keep on cropping up.

I think I'm finally beginning to understand the purpose of Sator's "safe-keeping receipt."

[jacobsaunders]

The translation:

Judiciary investigated the suspicion of money laundering

Waldviertel-Mitte Savings Bank reported to the authorities in 2004

The violin dealer Dietmar M., currently in swiss custody awaiting extradition and his ex-business partner, the finance consultant Klaus T were investigated years ago by the money laundering agents of the home ministry and the public prossecutor from Krems.

T. visited the Savings Bank, Waldviertel-Mitte, in Allentsteig in January 2004. He had come to haggle out a finance deal in which he wished to pledge "valuable violins" as colateral, as recorded in the statement of events protocol in the money laundering department of the home ministry, dated from August 2004. The violins for this deal were to come from Dietmar M., who had also appraised them.

During this meeting, T. provided all relevant documents, which the Savings Bank employees found extreemly strange. For instance the, pre-printed bank guarentee form, in english language, that T. wanted to have filled out with "at least ten million Euros".

He didn't recieve a bank guarentee after all. Rather the Waldviertel-Mitte Savings Bank employees reported their money laundering suspicion to the authorities. During the following investigations, T. told the police that M. had sent him to organise a credit, which he wouldn't have been able to apply for himself, since he had certified and valued the violins intended for colateral himself. Upon his own interogation, the violin dealer explained himself slightly differently, he had interested investors in Switzerland who would like to provide the finance, he himself had only provided valuations.

So the Lower Austrian authorities in Krems didn't really bring much light into this dark corner. The charges of money laundering were dropped in September 2004, with the explination that the accused had only made "crimanaly irrelivant preperations" (Der Standard, Vienna, Print edition, 2&3.7.2011)

[jacobsaunders]

A "Da Vinci" Strad was used by Nagyvary to compare to his own:

http://classic-web.archive.org/web/20031003034650/http://agnews.tamu.edu/dailynews/stories/BICH/Sep2203a.htm

I have no idea if that's the same "da Vinci" referred to in derstandard.at. But if it is, it'd be pretty funny in more ways than one.

http://www.florianleonhard.com/en/noteworthy-sales/view//3/

What about this one? surely not!

[Groda]

Once he settles out of court he can go into buisness with Peter Biddulph.

Are people not sick of this stupidity? Yet?

[skiingfiddler]

http://www.florianleonhard.com/en/noteworthy-sales/view//3/

What about this one? surely not!

OK. The 1725 "Leonardo da Vinci" Strad does exist.

[Flyboy]

.

[skiingfiddler]

One thing isn't clear to me: Do the violins M. was using as collateral actually exist? I've been meaning to consult the books I have to see if there are such violins as the 1725 "Leonardo da Vinci" and the 1688 "Derenberg" Strads, but haven't yet gotten to it.

A "Da Vinci" Strad was used by Nagyvary to compare to his own:

http://classic-web.archive.org/web/20031003034650/http://agnews.tamu.edu/dailynews/stories/BICH/Sep2203a.htm

I have no idea if that's the same "da Vinci" referred to in derstandard.at. But if it is, it'd be pretty funny in more ways than one.

http://www.florianleonhard.com/en/noteworthy-sales/view//3/

The 1688 "Derenberg" Strad seems to be pretty well documented. It's cited and discussed in both Henley's, 1961 (C. Woodcock editor), book, Antonio Stradivari, and in Doring's, 1999 (Bein and Fushi edition), How Many Strads?.

I can't find reference to the 1725 "Leonardo da Vinci Strad" in either of those two sources, but then neither of those two sources claims to be an exhaustive listing of all Strads.

Cozio.com lists certification for a c1725 "da Vinci" Strad going back to 1985:

[Roger Hargrave]

OK. The 1725 "Leonardo da Vinci" Strad does exist.

Wasn't it purchased by "Da Vinci" from Antonio Stradivari? I believe that M has the original bill of sale?

[skiingfiddler]

Wasn't it purchased by "Da Vinci" from Antonio Stradivari? I believe that M has the original bill of sale?

Of course, that would be it. The Renaissance, a period of great scientific advancement, time travel, ghosts with bank accounts and all the rest. Who knows, maybe da Vinci never paid Strad but kept the fiddle anyway. M bought the rights to the debt from Paolo Stradivari (ergo the bill of sale in M.'s possession), but was too scared to go after da Vinci to collect. That could have been the beginning of M.'s cash flow problems.

[jacobsaunders]

My emphasis, above.

Roger and Jacob,

One of the revelations for me from your posts is that Austria, and, I bet, Germany, too, have state certified experts in string instruments. (At least that's my translation of "beeideten Sachverstaendigen fuer das Fachgebiet Streichinstrumente," a position which Jacob holds.) In America, the state certifies lawyers and medical doctors with the appropriate state exams or state certification process, allowing them to become legally practicing lawyers and doctors. It looks like the Austrians and maybe the Germans, too, have a similar, formal, legally recognized status for violin experts. In the USA, there is no formally, legally recognized expert status for violin experts to attain.

One of the consequences of the Austria/German system for state certification in violin expertise would be, I would think, a separation of legally recognized expert appraisers from those folks who sell instruments. Can someone in Austria or Germany be a "beeideter Sachverstaendiger fuer Streichinstrumente" and also sell instruments? I'm assuming you can't, but that assumption may be very wrong.

Any clarification you folks can offer on the role of Austrian or German state certified violin experts in relation to the violin trade would be very interesting. Maybe it's a system the USA should emulate.

Dear Steven,

I have been slightly reluctant to answer the question you asked in you’re post #208, since it will take this thread fairly off topic. It also involves explaining a misunderstanding. I was hoping that Roger would answer, but I spoke to him this afternoon and he told me too.

Austria does NOT have “state certified experts in string instruments”. On the contrary, who may issue an opinion (not just violins, but anything) is regulated by paragraph 1299 of the Allgemeines bürgerliches Gesetzbuch vom 1.6. 1811 (General civil law book from 1.6.1811)

which says:

Wer sich zu eine Amte, zu einer Kunst, zu einem Gewerbe oder Handwerk öffentlich bekennt; oder wer ohne Not freiwillig ein Geschäft übernimmt, dessen Ausführung eigene Kunstkenntnisse, oder ein nicht gewöhnlichen Fleiß erfordert, gibt dadurch zu erkennen, dass er sich den notwendigen Fleiß und die erforderlichen, nicht gewöhnlichen, Kenntnisse zutraue; er muß daher den Mangel derselben vertreten…………

In other words; anybody can provide an opinion should they feel competent to do so, does however have to be responsible for any mistake. For this reason it gets terrifically tedious, when people say “how can Machold write certificates, he isn’t even a violin maker”.

“Allgemein beeidete und gerichtlich zertifizierter Sachverständige” (Generally sworn in court certified expert”) is something different:

A Judge has to judge the most varied cases from all walks of life, medical, contract, technical, custody, even violins etc. etc. and no human Judge can be expected to have expertise in all these areas. I can remember one case, when the Judge, for instance, was absolutely convinced that “Cello” and “Violoncello” were two entirely different entities. Therefore the Courts appoint people with expertise in all wild and wonderful special knowledge areas and publish these in lists at http://www.sdgliste.justiz.gv.at/ violins being a sub group of "Maschinen, Anlagen, Geräte, Instrumenten". A Judge can then, after working out which special knowledge is required in a particular case, consult this list and appoint somebody who does have this knowledge to be his/her assistant in this case. In every day practice, other people, particularly insurance companies also consult this list privately should they be seeking advice, but have no obligation to do so.

To become a “Gerichtliche Sachverständige” you have to take a difficult (for a non-lawyer) exam about contract law, damages law, court structure and procedures etc. and a second one, to show that you know what you are talking about on the subject.

I think a legally recognised violin expert who is prohibited from selling violins would be a terrible idea, like something from the ex-DDR (East Germany). If you ever come to visit, you can buy as many violins from me as you like!

[Jeffrey Holmes]

Maybe it's a system the USA should emulate.

While "expert status" is earned by reputation here, there are US appraisal standards. USPAP. Most if not all appraiser's associations require their members to take, and pass, the course... and take "follow up" courses every couple/few years as the standards are updated. When producing a USPAP compliant appraisal, there is a requirement to state conflict of interest and recent contact with the item (instrument or bow) as well as a myriad of other standards. Also, anyone who is active (and competent) in producing IRS appraisals above a certain $ amount in the US is aware of the "deadly form" required that accompanies such documents... which puts a nasty burden on the appraiser.

[Flyboy]

“Allgemein beeidete und gerichtlich zertifizierter Sachverständige” (Generally sworn in court certified expert”) is something different:

A Judge has to judge the most varied cases from all walks of life, medical, contract, technical, custody, even violins etc. etc. and no human Judge can be expected to have expertise in all these areas. I can remember one case, when the Judge, for instance, was absolutely convinced that “Cello” and “Violoncello” were two entirely different entities. Therefore the Courts appoint people with expertise in all wild and wonderful special knowledge areas and publish these in lists at http://www.sdgliste.justiz.gv.at/ violins being a sub group of "Maschinen, Anlagen, Geräte, Instrumenten". A Judge can then, after working out which special knowledge is required in a particular case, consult this list and appoint somebody who does have this knowledge to be his/her assistant in this case. In every day practice, other people, particularly insurance companies also consult this list privately should they be seeking advice, but have no obligation to do so.

To become a “Gerichtliche Sachverständige” you have to take a difficult (for a non-lawyer) exam about contract law, damages law, court structure and procedures etc. and a second one, to show that you know what you are talking about on the subject.

I think a legally recognised violin expert who is prohibited from selling violins would be a terrible idea, like something from the ex-DDR (East Germany). If you ever come to visit, you can buy as many violins from me as you like!

That's an interesting system. So in effect the state is paying to educate the judge on matters where he does not have expertise. Does the plaintiff or defendant get to have a say which "court certified expert" ultimately gets chosen?

I think in the US the plaintiff and defendant is responsible for bringing in their own experts. In other words both sides pay for their own experts and the judge must then make determination which side is more credible (if it comes down to that).