The paintings, sold as the work of artists including Max Ernst, Raoul Dufy, Fernand Léger and Heinrich Campendonk, are now understood to be fakes painted by a German forger over the past 15 years.
Police have taken into custody Wolfgang Beltracchi, 59, an artist from Freiburg and both his wife, Helene, 52, and her sister, Susanne, 57 who had offered them for sale. They said they had inherited the works from their grandfather, the classical scholar Werner Jägers. Two other men are also being investigated.
So far, more than 30 paintings have been unmasked by the investigation including Rotes Bild mit Pferden (Red Picture with Horses), sold for €2.4m at Cologne auctioneers Lempertz in 2006 as the work of the German Expressionist Heinrich Campendonk.
The buyer at the time was Trasteco, a Maltese company, who sued the auctioneers in October 2008 to claim back the purchase price. According to critical reports in the German media, Lempertz handled six of the suspect paintings, whilst Christie's offered four more in London. These included Max Ernst's La Horde, unsold at its £2.5-3.5m estimate in June 2006 but eventually sold to the Würth Collection in Baden-Württemberg, and André Derain's Bateaux à Collioure, sold for £1.8m in June 2007. Both pictures carried labels for the renowned Flechtheim collection liquidated by the Nazis.
Following doubts over their authenticity, Dr Nicholas Eastaugh, of London firm Art Access and Research, was asked to conduct extensive scientific tests on three pictures, finding pigments not available to artists in the early 20th century. One particularly convincing picture had a painted sketch on the back of the canvas (also a forgery) while other forgeries were applied with false exhibition and inventory labels.
Following in the footsteps of other inventive fakers, the strategy was often to create a painting that could relate to a documented work whose whereabouts was now unknown.
Dr Eastaugh commented: "This is a perfect example of why we need not only connoisseurship and provenance in the art market but also systematic use of scientific analysis. Greater integration of science into the sale process could have picked this up much sooner". Christie's say they are investigating the matter fully.