We previously covered the story of Thomas Kinkade, painter of crap, and his troubles with gallery owners who he screwed out of their life savings. Now it's the focus of a federal investigation.

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, former dealers contacted by federal agents said.

Investigators are focusing on issues raised in civil litigation by at least six former Thomas Kinkade Signature Gallery owners, people who have been contacted by the FBI said.

The ex-owners allege in arbitration claims that, among other things, 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 sell only Kinkade's work.

"They really knew how to bait the hook," said one former dealer who spoke on condition of anonymity because of the sensitive nature of the case. "They certainly used the Christian hook."
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Former gallery owners said that after they had invested tens of thousands of dollars each or more, the company's 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 artworks at prices they were forbidden to match.

Some also have accused Kinkade — touted as the most widely collected living U.S. artist — 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.

The panel ruled that the company and one of its executives, Richard F. Barnett, "failed to disclose material information" that would have dissuaded Karen Hazlewood and Jeffrey Spinello from investing $122,000 to open the first of their two Virginia galleries in 1999.

The arbitrators, in a 2-1 ruling, also found that Kinkade and other company executives used the artist's familiar Christian-oriented themes to create "a certain religious environment designed to instill a special relationship of trust" with the couple, who have since divorced.

"It was a program of lies and deception, predicated on Christian values that weren't there," said Joseph Ejbeh, the Michigan attorney who tried the arbitration case.

Norman Yatooma, whose firm Ejbeh worked for at the time, has said the $860,000 award could total $3.5 million when interest, costs and attorney fees are added.

The only sad thing is it will never convince people of how ugly those paintings are.