This Week In Blunders – Sept. 20-26
“I like money on the wall.” – Andy Warhol
Miami art dealer Leslie Roberts made millions showing fake Andy Warhols. When it came time for his sentencing Friday, he was a no-show.
Roberts was indicted in April 2025 and later pleaded guilty to conspiracy to commit wire fraud. When he failed to appear for sentencing on Friday, his lawyer told the court he didn’t know where Roberts was, Law360 reports.
The judge rescheduled the hearing for a week later. Roberts could face more than 20 years in prison … if he ever shows.
Pop artist Andy Warhol is perhaps the most diabolically hilarious trend that ever hit the 1%.
He turned soup cans, Coke bottles and Brillo boxes into status objects, often mocking American consumer culture while getting rich collectors to pay enormous sums for images of things everyone else could buy at the grocery store.
Florida real-estate investor Richard Perlman and his family, for instance, spent more than $6.7 million buying more than 200 purported Warhols from Roberts, according to The Wall Street Journal. Perlman settled an earlier lawsuit against Roberts and is now suing a litany of other art-world players he alleges supplied, sold or authenticated bogus works.
It may be difficult to tell a fake Warhol from a real one, considering how the artist mass produced so much of his work in a New York studio he called “The Factory.” But a fake art dealer should be easy to spot.
Vanity Fair laid out Robert’s background last year in a piece headlined: “An Art Fraud Case That Is Bonkers Even by Florida Standards.”
Business Blunders needn’t generate too many pixels to summarize it.
Just two words: Florida Man.
By the time the Perlmans walked into Roberts’ gallery, his provenance was considerably easier to check than the Warhols’ works.
Roberts had received a 15-year federal prison sentence for defrauding his great-uncle in a stock scheme. Artist Romero Britto later won a permanent injunction after Roberts sold counterfeit Brittos. Roberts also served 22 months in federal prison for selling forged Peter Max works — followed by another five months behind bars after violating the terms of his supervised release.
He also claimed to have studied at New York Univeristy and trained at Sotheby’s. He actually attended the University of Miami for just two semesters, and NYU said it had no record of him attending, according to published reports.
Does anybody know about this handy research tool called Google?
Then there was the purported Andy Warhol Foundation representative who reassured Roberts’ customers. His emails came from andywarholfoundation.co. The real Foundation is warholfoundation.org.
This is real-life satire at its finest, opening up a supersized can of dumbass that Warhol might have been proud to paint.
Warhol turned mundane consumer products into masterpieces. Roberts turned Warhol into art.
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It’s the debt, stupid
Washington is borrowing money it can’t stop spending. Silicon Valley is borrowing money for chips it can’t stop replacing.
Fortunately, they both have a plan: borrow more.
This week, the 10-year Treasury yield hit its highest level in 19 years.
Washington has run a deficit of more than $2 trillion already this fiscal year, and it has pushed the national debt past $40 trillion. Servicing this debt is already costing taxpayers more than $1 trillion a year. And that’s more than the government spends on defense.
Then there’s the AI beast Silicon Valley can’t stop feeding, even as it warns that it may kill us all.
Tech companies are spending hundreds of billions on data centers, chips and other infrastructure, increasingly with borrowed money. Goldman Sachs, for one, estimates these hyperscalers could issue $420 billion in bonds next year on top of billions and billions they’ve already borrowed.
The trouble is that today’s state-of-the-art AI chips may become yesterday’s technology long before some of the debts used to buy them come due. Can you say TRS-80?
Then there’s inflation, which isn’t going away, making all that borrowing more expensive.
This predicament was easy for anyone to see coming. Nobody cared.
Read More: Hello? What About The 36 Trillion Tab? (Business Blunders, 2024)
Brace yourselves, folks, not just for increasingly unaffordable mortgages and consumer loans, but for what may be the next big one.
John Roque of 22V Research studied 16 rapid spikes in the 10-year Treasury yield since 1970 and compared them with the financial calamities that followed, CNBC reported on Thursday.
His conclusion: “Something always breaks.”
This week in Ponzis
A Ponzi here, a Ponzi there, a Ponzi almost everywhere.
Regulators had a busy week:
Foreign exchange: The Commodity Futures Trading Commission accused Cash FX Group of running a $950 million global Ponzi scheme, promising returns of up to 15% a week from expert traders, algorithms and artificial intelligence. The CFTC says it did almost no forex trading, and investors lost at least $406 million. Nothing like losing millions to artificial Artificial Intelligence.
Trucking: The Securities and Exchange Commission accused Florida trucking entrepreneur Kristopher Lunsford and his companies of raising $127 million by promising investors $1,250 a week per truck. That’s about a 260% annual return. The SEC says $52 million went to earlier investors while Lunsford diverted another $33 million for himself, including millions for travel, bars, nightclubs and casinos. Apparently the money was doing most of the hauling.
Mobile homes: The SEC also alleged that Michael Ayala’s Wavemark Capital raised $9.6 million to buy mobile homes and promised investors guaranteed annual returns of 12% to 14%. It allegedly bought no mobile homes at all, instead using investor money for Ponzi-like payments and other expenses. The only thing that appeared to be mobile was investors’ money.
No real business plan. No real returns. Real money for the alleged perpetrators. Why does one of the oldest frauds in The White Collar Playbook keep fooling investors? Because they’re not reading Business Blunders. Feel smarter now?
The Feeling isn’t ‘mutual’
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How To Lose An Internet Fight eBay executives tried to silence a newsletter. It cost them tens of millions of dollars, seven criminal convictions, and one of the worst public-relations disasters in Silicon Valley history.
"Just Google him" assumes the buyer arrived with the dealer in their search frame. Most didn't. The art market's authentication ritual runs toward the work - certificates, provenance papers, foundation confirmations. The dealer earns a position inside the buyer's trust radius through gallery relationships and collector introductions. Background checks aren't part of the ritual.
His prior convictions were public record. The Britto injunction was public. The Peter Max prison term was public. The information was findable. What the market didn't require was finding it - because the verification structure was pointed at the paintings, not the person selling them.
The fake domain worked the same way. Buyers receiving a reply from andywarholfoundation.co were running a check on the work's legitimacy. The email was inside the frame they were already using. .co versus .org is easy to spot when you're suspicious of the sender. It disappears when the check is "did the Foundation respond?"
He also claimed to have studied at New York *Univeristy^spp. and trained at Sotheby’s. He actually attended the University of Miami for just two semesters, and NYU said it had no record of him attending, according to published reports.