METALLICA drummer Lars Ulrich may soon find himself in some hot water over the $5.5 million he received for the Basquiat paintings that were auctioned off at Sotheby's in May, if the following report in the New York Post (as it appears in today's edition of the paper) is to be believed:June 27, 2002 -- Bust in bogus-Basquiat case A 300-pound, gun-toting New York artist has been arrested for peddling fake Jean-Michel Basquiat paintings. SoHo art dealer Leo Malca thought he was getting an incredible deal when Alfredo Martinez, a Puerto Rican native who has exhibited work at various spaces around town, offered him two Basquiats at the bargain price of $38,500. Another dealer agreed to a similar transaction. But after someone tipped Malca off that they were phonies, he contacted the FBI, and the other buyer backed out of the deal. Malca declined to comment because the investigation is ongoing. An FBI agent posing as a collector then offered to buy more Basquiats for $145,000, and Martinez was arrested when he delivered the alleged fakes. Now he's languishing in the Tombs and faces up to five years in jail and a $250,000 fine. Apparently Martinez borrowed some bona fide Basquiats from Tom Warren, a photographer for Sotheby's, and then copied them. He also allegedly forged authentification papers. He told one buyer he'd obtained the works directly from a former girlfriend of Basquiat. Martinez's arrest has thrown the whole Basquiat market into chaos. A recent Basquiat exhibit at the Spike Gallery in Chelsea drew the likes of Edward Norton, but now everyone is wondering if they were the real deal. There's also speculation over the Basquiat work that METALLICA drummer Lars Ulrich auctioned off at Sotheby's in May for a record $5.5 million. The news is sure to be unwelcome to Basquiat collectors like polo-playing mogul Peter Brant (who's married to supermodel Stephanie Seymour) and German art dealer Bruno Bishofberger, who were crowing over how the record sale would affect the value of their own holdings. Other celebrity Basquiat owners include John MacEnroe, David Bowie, U2's Adam Clayton and Lenny Kravitz. "[Martinez] is known for eccentric kinds of behavior," Kenny Schachter, a gallerist who's exhibited a lot of his work over the years, tells PAGE SIX. "He's a formidable character. He's a gun fanatic and he once shot me in the middle of an art fair - luckily it was just a blank. I didn't know if I was bleeding or had bleeped my pants." Internet entrepreneur Josh Harris, who worked with Martinez for 10 years, isn't surprised. "Con is his art form," Harris says. "The FBI and jail are just logical extensions." Paintings by Basquiat, who once bedded Madonna and died in 1988 of a drug overdose, increased in value after artist Julian Schnabel's 1996 biopic about him.