From the Chicago Tribune [link]

By Kim Christensen
Tribune Newspapers: Los Angeles Times
Published August 31, 2006

The FBI is investigating allegations that self-styled "Painter of Light" Thomas Kinkade and some of his top executives fraudulently induced investors to open galleries and then ruined them financially, according to former dealers contacted by agents.

The criminal probe focuses on the same issues raised in civil litigation by at least six former Thomas Kinkade Signature Gallery owners. Those ex-owners alleged, among other things, that the artist known for his dreamily luminous landscapes and street scenes used his Christian faith to persuade them to invest in the independently owned stores, which must sell Kinkade's work exclusively.

"They really knew how to bait the hook," said one ex-dealer who spoke on condition of anonymity. "They certainly used the Christian hook."

Two ex-dealers told the Los Angeles Times that they had been asked to provide documentation of their business relationships with Kinkade's company. They said agents asked for copies of dealer agreements, retail sales policies, training materials from "Thomas Kinkade University" and correspondence.

Kinkade spokesman Jim Bryant said this week that the company, based in Morgan Hill, Calif., was unaware of a criminal investigation and had not been contacted by the FBI or U.S. attorney's office.

"The Thomas Kinkade Co. asserts that there is no legitimate grounds for a federal investigation of any kind," Bryant said.

Kinkade has denied the allegations in the civil litigation.

FBI agent Brian Wickham declined to comment Monday, citing bureau policy of neither confirming nor denying continuing investigations.

Others familiar with the case, however, said the FBI's San Jose office, where Wickham is based, was coordinating a probe in which agents from other offices are conducting interviews.

After investing tens of thousands of dollars, former gallery owners said the company's unfair practices and policies drove them out of business. They alleged they were stuck with unsalable limited-edition prints, forced to open additional stores in saturated markets and undercut by discounters that sold identical art works at prices they were forbidden to match.

Some also have accused Kinkade of scheming to devalue his public company, Media Arts Group Inc., before taking it private two years ago for $32.7 million as Thomas Kinkade Co.

Kinkade began his rise to fame in the 1980s, when he and his wife spent their savings to start making his prints. Since then he has built a lucrative career from the mass marketing of his distinctly romantic images.

Although critics have been less than generous with their praise, that has not deterred the multitudes who pay from a few hundred dollars for paper prints to more than $10,000 for canvas editions.

The FBI investigation comes on the heels of the company's first major legal setback. In February, an arbitration panel awarded $860,000 to the former owners of two failed Signature galleries. Bryant said the company is confident the ruling will be overturned.

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