Florida Pastor Accused of Art Fraud

Source: Manhattan D.A's Office

From the pulpit of his Miami church, pastor Kevin Sutherland appears more like a college lecturer than a firebrand preacher.

In video of a recent service posted on Mosaic Miami Church's YouTube channel, Sutherland strolls across the stage in shirtsleeves, using a PowerPoint presentation to talk about marriage and relationships.

"Effective communication enables relationships to endure," Sutherland tells the audience.

It is unclear from the videos or the church's web site how large the congregation is, but authorities allege Sutherland, 45, had a lucrative business on the side: dealing in counterfeit art.

(Read More: How to Spot a Fake: Paintings)

Last week in New York State Supreme Court in Manhattan, Sutherland pleaded not guilty to a single count of second degree attempted larceny. Prosecutors say he tried to pass off five paintings purportedly by British modern artist Damien Hirst, even though he knew they were fake. Sutherland was unaware that a supposed art dealer he met with at New York's Gramercy Park Hotel in January was, in fact, an undercover New York City detective.

Sutherland had allegedly contacted Sotheby's auction house in New York in December offering to sell a Hirst "spin" painting—reminiscent of spin art at carnivals—purported to be worth between $120,000 and $140,000. He also offered documentation—known as "provenance"—of the painting's history.

Source: Manhattan D.A's Office

But according to the criminal complaint, a Hirst-affiliated authentication service in London, Science Ltd., determined the painting and the provenance were fake and Sotheby's rejected it. Nonetheless, according to the complaint, Sutherland again offered to sell the first spin painting, a second spin painting, and three "dot" paintings entitled "Valium," "Opium" and "LSD," all of which were also fake.

(Read More: Fakes and Forgeries That Fooled the Experts)

Asked by the undercover detective if he had any reason to doubt the paintings' authenticity, Sutherland allegedly said in an e-mail, "EVERYTHING'S GOOD, EVERYTHING'S GOOD," according to the complaint.

Sutherland is free on $100,000 bond. Asked outside of court how he got into the art business, Sutherland was silent. His New York attorney, Sanford Talkin, would not say what Sutherland's defense would be, but said his client looks forward to his day in court.

"The truth will come out, and we're very confident in our position," Talkin said.

In the $80 billion art market, there are estimates that as many as 40 percent of the works for sale are fake. The FBI has an entire team dedicated to art fraud, and in New York, in many ways the center of the art market, Manhattan District Attorney Cyrus Vance Jr. is stepping up his efforts as well.

(Read More: The Real Deal on Fake Art)

The Sutherland case is one of about half a dozen major art cases his office has prosecuted since 2010. It is still a tiny fraction of the 100,000 or so cases the office handles every year, but for Vance, who prosecuted art fraud cases as a young assistant, they hold a special place.

"I think we have an obligation, both as a matter of local responsibility and also as a matter of making sure the art market is fair, just like any other market we're involved with—whether it's securities, whether it's real estate, whether it's construction," Vance said in an interview.

He said prosecutors are getting better at art fraud cases, in part due to technology.

"The same art's being stolen the same way I think it has been stolen for generations. Now our tools to build cases are a little more sophisticated than they were thirty and forty years ago."

Nonetheless, the cases can be challenging to prove, in part because experts say determining the authenticity of a work of art is a surprisingly inexact science.

"Unless the artist himself says, 'I actually did that painting,' unless there's a history of the piece coming forward from the artist, it's tough because people have been copying paintings forever," said Robert Wittman, who founded the FBI's Art Crimes Unit and now works for private collectors.

Source: Manhattan D.A's Office

Wittman said the provenance of a painting is key, but even that can be tricky, because paintings are often stolen more than once.

"They go missing. They show up again. They get sold three or four times. But they still don't have good title because once it's a stolen piece, you can't pass good title."

In the case of counterfeit art, prosecutors must prove beyond a reasonable doubt that the person selling the art had intent to commit a fraud. That is where good undercover work comes in.

"You have to prove knowledge that the person knew this was material was fake and that he meant for it to be sold and he was trying to basically pull the wool over somebody's eyes," Wittman said.

Wittman would not say how an undercover agent might do that, since he still does undercover work for private collectors.

"I'm still actually doing this stuff," he said.

Kevin Sutherland, the Florida pastor, hinted during an interview with investigators that he may claim in his defense that he did not know the Hirst paintings were fake when he tried to sell them.

According to the criminal complaint, Sutherland told investigators he "didn't really read the e-mail" from Sotheby's rejecting the first painting as a fake, and that the e-mail "could mean a thousand things."

But prosecutors say Sutherland is no beginner when it comes to fake art. According to the complaint, he acknowledged to investigators that he is currently involved in a civil suit over two other pieces of counterfeit artwork.

Sutherland is due back in court in the criminal case on April 25.

-By CNBC's Scott Cohn; Follow him on Twitter @ScottCohnCNBC