Case:

FOR THE RECORD

In the article below, it should have read Michael Schofield had the drawing on consignment from the Studio City casting director, meaning he did not share ownership of the piece.

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Newport Beach artist Michael Schofield will be investigated for possible grand theft after allegedly using a Pablo Picasso drawing that did not belong to him as collateral for a $40,000 loan from real estate broker Jeff Stokes, authorities said Friday.

Schofield, 60, is an artist with paintings listed on several art websites.

He allegedly told Stokes he was using his $40,000 to buy artwork and gave him the Picasso as collateral, Stokes said.

Schofield was supposed to sell it to a soon-to-open auction house and then repay Stokes his money plus interest, Stokes said. The auction house never opened, and Stokes didn’t get his money back in six weeks as promised, his complaint with police stated.

Efforts to reach Schofield for comment were unsuccessful.

Stokes moved to Corona del Mar in August with his wife and two children, 3 and 1 years old. He gave the Picasso drawing, “Le Couple,” dated 1920, with an estimated value in the six-figures, back to Schofield to hold during the transition, he said. Looking back, with no money and now no collateral, Stokes said that was a mistake.

“He’s a nice guy; you wouldn’t expect it. I assumed — I was a fool,” he said.

The artwork’s owner, a casting director in Studio City who did not want to be identified, said Schofield was a cosigner trying to sell the piece. He did not know Schofield was allegedly using it as collateral, he said.

Newport Beach police officials said the investigation will begin on Monday, and criminal charges are not guaranteed.

Newport Beach Sgt. Evan Sailor said the case could go as civil or criminal. “They’ll look into his past history and if he does have priors then, yes, that could be used to develop a case,” he said.

Schofield was convicted of unlawfully taking a motor vehicle in 2007 and forging checks in 2001, according to court records.

Stokes said if Schofield is charged and convicted, he realizes he may not ever get his money back.

“I just chalk it up as an investment that went wrong,” Stokes said. “I thought it was an easy and secured investment. I had no reason to doubt him.”

JOSEPH SERNA may be reached at (714) 966-4619 or at joseph.serna@latimes.com.