Picasso toy guitar found in Italy
Rome police tracked the sculpture down to the businessman's apartment in Pomezia, a town south of the capital.
The businessman, who was not named, was charged with fraud and is now on bail.
Picasso gave the piece to an Italian artist, Giuseppe Vittorio Parisi. He then lent it to the businessman, who was to make a glass showcase for it.
The plan was for the priceless piece to go on display at the civic museum in Maccagno, a small town on Lake Maggiore in northern Italy where Parisi was born.
But the piece disappeared after Parisi handed it over two years ago. When Parisi died in January this year his widow told police that it was still in the businessman's hands.
The Little Guitar will now go on display at the museum in Maccagno, Italy's Ansa news agency reports.
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