Thesaurus Fine Arts closed in January 2003, the day The Seattle Times began publishing a series of stories alleging the store was selling modern ceramics that had been falsely certified as ancient and rare Chinese art.

Doug Walsh, senior counsel for the Attorney General's Office, said the state scientifically tested four items and had several dozen examined by experts. The state found that the items were "relatively modern and being represented as ancient," he said. "The gulf was significant."

Thesaurus did not admit wrongdoing in the settelment, and David H. Smith, a lawyer for Thesaurus, said the items in the gallery "were accurately represented" during its five years of operation downtown and on online auction sites.

The Attorney General's consumer protection division filed consumer-fraud charges against Thesaurus in February 2004. Attorney General Rob McKenna announced the settlement on Friday.

During The Times' investigation, a reporter paid $315 for a pottery tile the store manager said was from the Ming Dynasty, which lasted from 1368 to 1644. But when The Times had the tile scientifically tested and checked by local art experts, the newspaper found that the tile was less than 100 years old and could have been purchased for $10 to $15 in Hong Kong.

Smith said the gallery would regularly refund people's money if they weren't happy with their purchases. "This case should never have happened, because all the consumers had to do was call (Thesaurus) to get a refund," he said. "They would have gotten one."

As part of the settlement, Thesaurus agreed not to sell Chinese antiquities in Washington. Smith said the company is defunct and has no plans to reopen.

The settlement also dismissed Steven Ng Sheong Cheung, a former University of Washington professor and economist, from the case. Cheung has denied ownership of Thesaurus.

Cheung and his wife, Linda Su Cheung, were indicted on federal tax evasion charges in 2003 and are believed to be living in Shanghai, China, which doesn't have an extradition treaty with the United States.