Biggest Fake Native American Art Conspiracy Revealed
Jewelry dealer Nael Ali will be the first defendant sentenced in the most extensive federal investigation into Indian arts and crafts fraud.
By Maraya Cornell
High on the Colorado Plateau in northwestern New Mexico, a dusty main road runs through the Pueblo of Zuni. Pull over to the side, and someone in threadbare clothing will soon approach your window holding out a mysterious little box. In Los Angeles, where I live, such an offering could only mean trouble, and you’d be wise to roll up the window and make a quick getaway. But here in the homeland of the Zuni people, it’s safe to take a look. The box is lined with soft cloth, and in it you’ll find an exquisite creation this person made with his own hands—a travertine animal carving, silver earrings inlaid with the Zuni sun face motif, a corn maiden pendant of carved shell.
The Zuni people rely heavily on hard-won earnings from handmade jewelry and crafts. The tourism department of Zuni Pueblo estimates that 80 percent of working adults there make arts and crafts for sale. Yet it’s getting harder and harder for them to make a living.
For as long as the Zunis and other indigenous artisans have sold their crafts, they’ve been undercut by fakes—nonnatives posing as Indians to sell more of their work, factory made goods sold as handmade. But today’s fakes include a virtual torrent of knockoffs cheaply manufactured overseas and masquerading as genuine Native made—baskets made in Pakistan sold as Navajo, beadwork made in China sold as Plains Indian, Hopi katsina dolls cranked out in the Philippines—none more profitable than counterfeit Indian jewelry.
The insult isn’t just financial. “Our arts and crafts give us a really concrete way to stay connected to our culture and our history,” says Navajo jeweler Liz Wallace. “All this fake stuff feels like a very deep personal attack.”
But even though the rampant sale of counterfeits in the Southwest has been widely acknowledged for decades—and has ties to organized crime, according to affidavits by federal investigators—only recently has the U.S. government taken any serious action to shut down the major operators. Whether the crackdown has teeth will be tested in New Mexico in April, when Albuquerque jewelry dealer Nael Ali will be sentenced for fraudulently selling imported jewelry as Native American made.
Ali, the owner of several retail stores in Albuquerque’s Old Town district, pleaded guilty on October 18, 2017, to misrepresenting as Native-made jewelry sourced from two family-run networks he said were supplying him with counterfeit jewelry made in the Philippines. These two networks make for the largest Native American art fraud conspiracy ever brought to light.
Ali’s sentencing is the first in the ongoing federal investigation called Operation Al Zuni, which began in March 2012, and is the most extensive ever conducted into Native American art fraud.
The investigation was named Operation Al Zuni after Al Zuni Global Jewelry, a well-known business in Gallup, New Mexico, owned by Nashat Khalaf, a Palestinian immigrant and prominent Indian arts dealer. Al Zuni, which claims to be the “largest wholesaler of Indian jewelry serving the Southwest since 1977,” has its storefront in Gallup but also sells at gem and jewelry trade shows where retailers from all over the country buy inventory.
Misrepresenting arts and crafts, including jewelry, for sale as Native made when they’re not is a federal crime under a law passed in 1935 called the Indian Arts and Crafts Act. The act provides for penalties of up to $250,000 and five years in jail for first time offenders, but until now it has rarely been enforced. Federal law also requires that “Indian-style” products imported into the United States be permanently marked with the country of origin. That law too has been widely flouted.
It has been estimated that the Native American arts and crafts industry brings in more than a billion in gross sales annually nationwide. And although many would say that not enough profits have ever reached the artists, the sale of handmade jewelry, baskets, pottery, carved figurines, beaded leather, and other crafts provide livelihoods for thousands of indigenous people.
According to federal investigators, the two families running counterfeiting networks are both Palestinian, known to law enforcement as the Sterling Coalition and the Aysheh brothers. The Sterling Coalition, the larger of the two, operates an importing company in Albuquerque called Sterling Islands, which is owned by Nashat Khalaf’s brother, Jawad Khalaf, and niece, Sheda Khalaf.
In affidavits filed in support of 18 search warrants executed in October of 2015, investigators name these and other members of the Khalaf family, and associates, as participants in a scheme to import and fraudulently sell counterfeit Native American jewelry manufactured in a factory in the Philippines called “Fashion Accessories 4 U.” Jawad Khalaf and his son, Nader, have owned the factory since at least 2006. None of the Khalafs has been charged yet.
Albuquerque lawyer John Boyd, who represents Nashat Khalaf and Al Zuni Global Jewelry, calls the allegations against his client “wrong.” The business and its owner, he said in an email, “have supported Native American artisans for decades, maintain good relationships with them and provide the most important outlet in the area for Native Americans to sell their work. Al Zuni and Khalaf deny that they have ever attempted to pass off or have passed off any jewelry as Native American, Navajo, Zuni, Hopi, or any other tribe, when it is not.”
Mark Baker, another Albuquerque lawyer, who represents Jawad Khalaf and Sterling Islands, emailed that his clients “certainly deny that they violated the law or otherwise engaged in any deceitful conduct. This is a family of people known in the community as honest and responsible.”
Law enforcement estimates that Sterling Islands has imported into the U.S. contraband jewelry worth $11,800,000 in wholesale value between October 2010 and October 2015. According to court records, retail buyers and wholesalers would place orders for replicas of particular pieces of genuine jewelry and pick them up at Sterling Islands.
The four Aysheh brothers running the other alleged conspiracy—Imad, Nedal, Iyad, and Raed—were charged in February 2017. Their trial is scheduled for October of this year. None has yet entered a plea.
In October 2015, when Operation Al Zuni went public, 11 jewelry and Indian arts stores were raided in New Mexico and California, including two of Nael Ali’s Albuquerque stores, Gallup 8 and Galleria Azul. The Indian Arts and Crafts Board estimated in 2016 that the retail value of the 350,000 pieces of jewelry seized during the raid exceeded $35 million.
Operation Al Zuni was conducted by the Office of Law Enforcement for the Southwest Region of the U.S. Fish and Wildlife Service and funded through an agreement with the Indian Arts and Crafts Board, an agency within the U.S. Department of the Interior tasked with developing and promoting arts and crafts as a source of income for American Indians and Alaska Natives, as well as with enforcing the Indian Arts and Crafts Act.
MADE BY INDIANS?
In the Pueblo of Zuni, jeweler Roxanne Seoutewa sits in a folding chair at a cramped desk in a well-worn trailer, soldering tiny hand-made bezels to a piece of silver sheet. Into the bezels she’ll fit the seed-like stones she’s cut, sanded, and polished to form the close, stitch-like pattern known as needlepoint and recognized by collectors the world over as one of the classic Zuni styles of handmade jewelry.
Compared to artisans trying to sell their work on the street, Seoutewa is doing well. But she has to go farther and farther from home to get a decent price for her work. She doesn’t sell to the local shops in Zuni anymore, or even to the wholesalers 40 miles away in Gallup. The problem, she says, is all the cheaply made foreign imports illegally sold as Zuni handmade.
It was the arrival of the railroads in the Southwest at the turn of the 20th century that set off a roaring business in indigenous art and crafts, and the industry has been a defining presence in the Southwest ever since.
And it was a boom in the tourist industry along Route 66 in the 1960s and 70s that attracted fortune-seekers from the Israeli-occupied Palestinian West Bank. In 1972 Nashat Khalaf and three of his brothers were among the first to arrive in Gallup, the wholesale center for the arts and crafts produced on nearby Indian reservations. They opened a business selling Zuni jewelry, calling it Al-Zuni Traders. As Khalaf told Al Jazeera years later, he and his brothers had such instant success in the jewelry business that they “called everybody” back home. “It was a bonanza,” he said. “It was a gold rush, and they all came here.” By 2002 several hundred Palestinians had settled in Gallup, most reportedly in the Indian jewelry business.
Today road trippers driving Interstate 40 through Arizona and New Mexico are bombarded with billboards hawking crafts “MADE BY INDIANS.” Much of what’s for sale hasn’t been made by Indians at all. Even Santa Fe, regarded as the heart of the high-end Indian art market with its world-renowned plaza shopping district, is rife with forgeries—so much so that the city recently announced an ordinance to try to rein in the fraud.
Higher-end jewelry knockoffs are copied from one-of-a-kind pieces by master Indian artisans and stamped with initials and symbols to mimic an artist’s hallmark. In stores the fakes are often mixed in with genuine pieces but sold at a discount, forcing jewelers who painstakingly craft each piece by hand to compete with counterfeits produced in sweatshops.
The Indian Arts and Crafts Board collects complaints about potential violations of the Indian Arts and Crafts Act, but without a law enforcement bureau of its own, the board must rely on other agencies to investigate complaints. In 1990 a major overhaul of the act increased penalties for violations and gave the FBI primary responsibility for enforcing the law. But the FBI had other priorities, and the bureau generally declined referrals of potential violations from the board, according to a report by the Government Accountability Office.
By late 2011 when the Fish and Wildlife Service agreed to look into fraudulently sold Indian arts and crafts, no jewelry dealers, or large-scale dealers in Indian arts and crafts of any kind, had been charged under the act. On several occasions during the 1990s and 2000s, New Mexico attorneys general sued jewelry stores in Santa Fe and Albuquerque, including several dealers identified by Operation Al Zuni as selling the Sterling Coalition’s Philippine counterfeits, but their suppliers were never identified. And even though the rampant sale of counterfeits in Arizona and New Mexico has been widely acknowledged for decades, no major counterfeiters had ever been charged.
Yet federal law enforcement had been alerted to at least one potential supplier as early as 1994, when the Arizona law firm Kirkpatrick & Kramer wrote to a Department of the Interior investigator on behalf of Hopi jeweler Jason Takala warning that “an outfit in eastern Gallup, New Mexico named ‘Al Zuni’ is mass-producing copies of original Native American jewelry.”
It wasn’t until nearly two decades later, after the Fish and Wildlife Service had taken over enforcement of the Indian Arts and Crafts Act, that a piece of counterfeit Indian jewelry in a retail store was traced back to the Khalafs.
MAKING THE CASE
On November 26, 2012, a Monday, Fish and Wildlife Service Special Agent Russell Stanford walked into Gallery 8, an upscale jewelry shop in Albuquerque owned by Nael Ali. Posing as a jewelry dealer, Stanford bought two rings stamped with the initials CK, which the clerk told him stood for the Navajo artist Calvin Kee, according to court records. (There is no known Navajo jeweler named Calvin Kee.)
Later Stanford looked at the ring under an ultraviolet light and confirmed that it had come from the Khalafs’ factory in the Philippines: There were the dabs of otherwise invisible ink he’d applied to the ring two and a half months before when he intercepted a shipment of jewelry coming in from Fashion Accessories 4 U and bound for Sterling Islands.
In just months Stanford, working as the sole investigator on Operation Al Zuni (a second agent wasn’t added until June 2014) had done what no federal investigator had yet been able to do: substantiate a source for the high-end counterfeits that had been turning up in retail stores for decades.
Less than 30 days later, Gallery 8 was featured in a Christmas shopping guide in the Albuquerque Journal. Nael Ali claimed that he purchased all his jewelry, except for the Polish amber jewelry, directly from Native artists. “There’s no middleman for me,” he said.
Ali, along with Mohammad Manasra, a traveling jewelry seller (who Ali admitted in his plea agreement was indeed his middleman) were arrested in October 2015 in Operation Al Zuni’s initial take-down and became the first jewelry dealers ever to be charged with violating the Indian Arts and Crafts Act. (The charge against Manasra has been reduced to a misdemeanor, and he isn’t facing incarceration.)
In Nael Ali’s plea agreement, filed October 18, 2017, he admitted that the Philippine-based factories run by the Khalafs and the Aysheh brothers were the sources of counterfeits (some supplied through Mohammad Manasra) that he was fraudulently selling as Native made at Gallery 8 and at Galleria Azul, another store in Albuquerque. Ali confessed to mixing the knockoff jewelry with genuine Indian-made jewelry and ensuring “that none of the Philippine-made jewelry was marked with its country of origin.”
TAKING OUT THE THORN
The ongoing prosecutions against the alleged fraudsters in New Mexico are sending shockwaves through the Indian arts and crafts industry. Nidal Abdeljawad of All Tribes Trading Post, an Indian arts store in the Pueblo of Zuni, claims that Nashat Khalaf’s Al Zuni Global Jewelry supplies 90 percent of the retail stores in the U.S. that deal in Native art. “If this guy has to close his shop, it will be a disaster for the Native Americans,” Abdeljawad says.
Other Southwest dealers fear that prosecutions against business owners accused of peddling fakes make for bad publicity and that customers and collectors, concerned about getting ripped off, will avoid shopping for Indian arts and crafts altogether.
Justin Winfield, of Winfield Trading Company, a large buyer of Indian jewelry and crafts located on the highway between Gallup and Zuni, disagrees. Fanning out the thick stack of newspaper articles he’d collected since October 2015, he told me last July that he thought the ongoing prosecutions were already having a “positive impact”—that buyers for retail stores were taking greater care to ensure authenticity.
A few spooked customers in the short-term is a price Winfield is willing to pay if it means curbing the influx of fakes. “It hurts to take the thorn out,” he said. “But after it’s out, you can heal up.”
William Woody, who championed his agency’s investigations into Indian arts and crafts fraud when he was chief of law enforcement at the Fish and Wildlife Service, thinks Operation Al Zuni has “just scratched the surface.” At a Senate field hearing last July—Woody’s final day on the job—he said, “We have not begun to take a comprehensive look into the markets for other Native American items in the Southwest, including pottery, paintings, blankets, etc., where there is likely similar fraudulent activity.”
“In order for things to change,” wrote the editors of the Gallup Independent in October 2017, “the federal government, as well as attorneys general in states like New Mexico and Arizona, must get a lot tougher on these frauds.”
The sentencings of Nael Ali and Mohammad Manasra, who have confessed to knowingly dealing in fakes from both alleged networks, will test how tough New Mexico judges are willing to be. Manasra isn’t facing prison time. But Ali, who pleaded guilty to a felony, faces up to 18 months in prison and could be the first person ever to go to jail for violating the Indian Arts and Crafts Act.
Prosecutors have requested that the sentencing in Albuquerque of Ali and his co-defendant, Mohammad Manasra, be on the same day in April so that any Native American artisans who wish to be heard by the court won’t have to travel twice. “Now’s the time for these artists to come forward,” says Special Agent in Charge Nicholas Chavez, who supervised the Fish and Wildlife Service’s investigation.
This 1980 hard bound book is full color, 64 pages and 11 3/4″ x 8 3/4″
My copy of this book had no author on the binding, no title page, no copyright page, nothing to indicate who wrote this book and when it was published. But with a little digging, I found it was written by Gordon Levy and published in 1980 by Western Arts Publishing Co.
It doesn’t have an ISBN but it does have an ASIN – B001LQQM8Q
There are ample quantities available new and used if you search by the title.
Now to the book itself. Here is the the copyright page that was not in my book but I found on line.
Copyright page from “Who’s Who in Zuni Jewelry”
On the copyright page (above) and in the Introduction (below), there is mention of future volumes but I am only aware of this one volume. If anyone knows of subsequent volumes, please leave a comment at the end of the article.
Introduction from “Who’s Who in Zuni Jewelry”
The front matter contains:
ZUNI JEWELRY THE ART AND THE ARTISAN
The Stamping or Signing of a Piece of Jewelry
The Meaning Behind the Making of Zuni Jewelry
The Art and Craft of Silversmithing
Tribal Heritage and Goals
Natural Turquoise and How to Care for It
Following the front matter are full color pages about the artists. Here are the artists that are covered in this book.
Native American pieces that are completely handmade are becoming harder to find. By NA handmade, I mean made in the USA by a registered Native American using no manufactured elements. Its like cooking from scratch – using whole foods and no canned ingredients.
Jewelry by Algonquin artist Mike Schmaltz is not only handmade but beautiful and unique.
Michael (Poole) Schmaltz started making jewelry full time in 1973. He learned jewelry through making many mistakes and learning what not to do. He picked up some valuable tips by watching a few master Zuni silversmiths who were more than willing to share. He learned the art of hot forging ingots into sheet and wire from the blow by blow description of Tom Burnsides hammering silver that is described in the book The Navajo and Pueblo Silversmiths by John Adair.
Let’s step inside Mike’s shop and watch him create a coin silver dragonfly pendant from concept to finish.
Photo 1 – The design and dimensions are roughed out on graph paper.
Photo 2 The coin silver ingot is heated to a dull red, then taken to the anvil . When it turns black, it is pounded with a heavy hammer all over all surfaces, then reheated and pounded again. These steps are repeated until the required shape, thickness, and size is reached. It takes a lot of experience to know when to reheat so as to not get a cracked ingot.
Native American jewelry enthusiasts, collectors, wholesalers and retailers alike often refer to Bille Hougart’s book (Native American and Southwestern Silver Hallmarks, Third Edition) as the “bible” and the most useful book on identifying Native American hallmarks.
This 7″ x 10″ fat paperback has 517 pages.
The bulk of the book, pages 34-416, consists of an alphabetical (usually by last name) list of artists. In many cases there is a photo of the hallmark along with biographical information such as tribal affiliation, birth date, types of jewelry usually made, family member of note and more.
Example of interior pages
There is a 10 page section in the front of the book that discusses the history and function of the Indian Arts and Crafts Board.
Following there are discussions of:
The Hopi Silver Craft Guild
The Navajo Arts and Crafts Guild
United Indian Traders Association
The back matter contains an alphabetical listing of marks. This list is of the actual marks, different from the body of the book which is alphabetical by artists’ last names. This makes several ways to find who a mark belongs to.
Then there is 42 page section of symbol marks by category such as Paws, Sun etc.
To complete this essential work, there is a
and an index.
If you have interest in Native American jewelry and need to identify hallmarks, this book is essential.
When this piece arrived in an estate lot several years ago, I fell in love with it immediately – purely for its design and symbolism. I didn’t even look at the back – just thought it was an extraordinary piece.
Then I turned it over…..and………thought………..could it be?
I started googling and soon had a strong feeling this could be a piece by Hopi legend Charles Loloma.
Sonwai is the artistic name used by Verma Nequatewa. Verma began working with her uncle, the late Charles Loloma, in the mid-1960’s and continued working with him until his studio closed in the early 1990’s. At that time, she opened her own studio and has been continuing his teachings through her own jewelry.
Here is the reply I received from Bob Rhodes in response to my photos and email to Verma : “The pendant has a tufa-cast back and inlay of turquoise, lapis lazuli, coral and ironwood. It is difficult to see the detail in the photo, so I may have missed something.
The piece represents what Charles called a “Badger Hand.” Charles was Badger clan and this is his concept of a combination of badger paw and human hand. It was most likely made at the Loloma Studio at Hotevilla, AZ in the late 1960’s or early 1970’s. At that time he often did not differentiate between turquoise from different mines. He had a wash basin that he put all sorts of turquoise in, then picked pieces out for different colors and shapes. He did only use natural, not treated, turquoise, so some of the stones will “mature” or change color as they are exposed to light, air and skin oils. What you have is a very representational piece of Loloma jewelry of that time period. ”
Well I got goose bumps and thanked them both so much for the thoughtful and detailed reply.
They appreciated the photos as they are collecting as many as they can of Charles Loloma’s pieces.
Charles Loloma (1921-1991) was an active Hopi artist from 1949-1991. He is one of the most innovative and influential Native American artists of his time. He used many techniques including tufa casting, lost wax casting, stone and wood inlay, and cobblestone.
Although he was also a painter and ceramicist, he is most well known for his jewelry.
This badger paw pendant is an example of the high stone-to-stone inlay he became so well-known for.
According to Loloma himself, “I am not versed in the exact date that I started working in jewelry, but my guess is it was in 1947 when I was a student at Alfred University. I was working in pottery and silver.”
In the mid 1950s Loloma moved to Scottsdale, Arizona and began making jewelry in earnest.
The name Loloma translates to “many beautiful colors” which is certainly evident in his work. He broke from the tradition of solely using turquoise and coral by adding unusual stones of bright color as well as fossilized ivory and imported woods such as iron wood.
Much has been written about Charles Loloma – see Southwestern Indian Jewelry, Crafting New Traditions by Dexter Cirillo.
Early buttons from about 1870 were round, flat and with two holes like conventional buttons. Plain domed silver buttons were made soon thereafter.
Buttons were originally for fastening garments but soon became more ornamental and even were used as a trade item. Navajo Indian agent John H. Bowman observed in 1886 “When they wish to buy anything and have no wool to exchange, they simply cut off the needed number of buttons. These vary in value from 2 1/2 cents to $1 – and are never refused as legal tender in this vicinity.”
With access to more diverse tools in the late 1800s and early 1900s, hand-made buttons were domed, filed, etched, fluted, stamped and a loop would be forge-soldered onto the back.
Stones were added about 1900.
See the end of this article for several book excerpts that show button-making techniques.
When button production became mechanized (die cut and machine stamped) hand-made buttons which were labor intensive couldn’t compete price-wise so fewer were made. That’s why hand-made Navajo buttons are fairly scarce.
A mixture of vintage buttons and contemporary button covers – can you tell which are which?
Enter button covers………………
A variety of sterling silver button covers
The 1970s Native American jewelry boom (see my article The 1970s Native American Jewelry Boom) and the popularity of southwestern and western style dress beginning in the 1980s brought us the tourist version of the Native American button – the button cover – a clever system that could be slipped over and clasped to any button to dress up a shirt or dress. Instant Urban Cowboy !
The design portion or button cover top is usually made of sterling silver. They can be Native American hand-made or commercially machine made.
Contemporary Native American made button covers
Yellowhorse hallmark on above group of button covers
Since most buttons and button covers do not have hallmarks, it requires experience and a good eye to recognize design styles and see details under magnification to determine whether the button tops are hand made or machine made.
Likely these are Native American made concha style sterling silver button covers.
It is possible that the sterling silver shadowbox bear paws with turquoise cabochon were made in a Native American shop.
Navajo-made onyx button covers with dangles – you might ask why one has the oval dangle stones set horizontally and the other vertically……….this is not a set but two individual button covers designed to be worn on the top button of a shirt or blouse. So perhaps his and hers?