None of that was true, Johnson admitted.
Russoli's attorneys also allege that Johnson is guilty, once again, of selling unregistered securities. In a sworn affidavit dated December 1994, I. Douglas Dunipace--an attorney with the Phoenix law firm of Jennings, Strouss & Salmon and an expert witness for Russoli--wrote that he believes Artex stock was sold illegally in 1991 and 1992, because it was not registered with state or federal securities regulators.
Dunipace claims Artex did not prove that potential investors had the wherewithal to determine if the business was healthy; in addition, he notes, potential buyers were not provided with an audited balance sheet for Artex. And, the attorney contends, Artex's marketing plan contained incomplete and misleading information.
Johnson's attorneys, however, claim the offering of stock was sold to just seven individuals and three businesses, all knowledgeable in financial matters.
Via his attorney, Russoli refused an interview with New Times.
Johnson says, "It was a very complicated thing because he and three other guys tried to steal a company from me and the other stockholders, and I kicked him out, and so now he wants his money back that he had invested after he got kicked out."
He refuses to elaborate.
Russoli v. Artex is expected to go to trial sometime in the next several months. But the Securities and Exchange Commission may have a jump on Russoli. Although SEC officials refuse to comment, former Artex employees claim the SEC began investigating Johnson's business holdings in 1993.
The Artex International Fine Art Exchange finally went online earlier this year. But in 1993, all of Artex's employees were dismissed and told the company was out of money. In a claim for back pay filed in Maricopa County Superior Court, former Artex advertising/marketing manager Ron Lee described a meeting in June 1993, in which Artex president Tom Larkin announced his resignation.
Lee wrote, "[H]e [Larkin] notified us that he could not receive, or take, or even try to persuade an investor to provide any more funding because of an SEC investigation (then in a 'start-up' mode) and targeting its focus on Artex Int'l and Mr. Snell M. Johnson. After this information he then said we should seek employment elsewhere."
Lani Gore, who at the time was Artex's accountant, confirms the events as recollected by Lee.
"There was definitely an SEC investigation," she says, recalling that other Johnson employees were called upon to pull documents requested by the SEC.
Snell Johnson has been convicted three times for misleading people about investments and is the target of several lawsuits alleging recent fiscal legerdemain. But is finance connected in any way to Johnson's art? Why is the western United States being littered with enormous bronze horses, buffalo and Native Americans, all of whom have faces resembling Yoda from The Empire Strikes Back? Why are people paying large sums of money for sculptures that will never be mistaken for the work of Rodin?
Of course, customers may buy Johnson's work simply because they like it. In at least some cases, however, the decision to purchase may focus on financial as well as artistic considerations.
Last year, a potential Johnson customer received a form titled "Financial Benefit Profile Created by Donating Art Monument."
The form provides an example of how a purchase of Snell Johnson sculpture might shelter significant amounts of income from federal tax liability. In the example, a sculpture purchased from Johnson for $100,000 is projected to double in value a year after the sale. If the sculpture were then donated to a nonprofit entity, the form says, that charitable donation could reduce the original purchaser's taxable income by $80,000, if he or she were in a 40 percent tax bracket. (That is, 40 percent of the $200,000 value of the art is $80,000.)
Johnson's form, of course, offers the caveat that each client's tax situation is different. The form does not suggest that clients take any actions that are, per se, illegal.
But the sales pitch does not dwell much on evaluating fine art, either.
During preparation of this story, more than a dozen gallery owners, artists, public-art experts and curators were asked to assess the artistic aspects of Johnson's sculpture. All refused, either claiming they didn't know the work well enough or saying they simply didn't want to comment publicly on his work.
But Robert Schultz, a former registrar at the Phoenix Arts Commission, was willing to recount one anecdote about a Snell Johnson art proposal. In the early 1990s, Schultz recalls, Johnson offered the city a free bronze to be placed near America West Arena in exchange for the right to sell smaller versions of the sculpture. The city refused the "donation."
"Snell basically had offered Jerry Colangelo and the Suns a huge, double life-size sculpture of a basketball player going up to slam a ball into a basket, and at that time, the arts commission had a gifts and loans policy where any artwork that was to be placed on city property had to go through a review process through the arts commission," Schultz recalls.
"It wasn't accepted," he says.
"As I recall, they felt that just simply the quality of the maquette--the model that was submitted--was just not up to standard of what they would have liked to see in a major artwork outside of a major venue."
Even for the low, low cost of--nothing?
"The artistic quality was the first criteria," Schultz says, "and in their opinion, it didn't pass muster.
