Rogues’ gallery? Three reasons why the art market is vulnerable to wrongdoing
| by Georgina Adam |
Illustration by Katherine Hardy
It was with sadness that I read about the troubles of the prominent art advisor Lisa Schiff, who is currently the target of two lawsuits claiming she defrauded clients and—according to one—was running a Ponzi scheme.
I have worked with her and always enjoyed her forthright comments and feisty personality—but my attempts to reach her failed, so I can’t even give her reaction to the lawsuits. For the moment, of course, we must assume she is innocent.
However, this got me thinking about other cases in the art market where there was definite wrongdoing, and unfortunately the list just gets longer and longer. Going back in time, there was Michel Cohen, who swindled some $50m out of art dealers before going on the run (he was never convicted). Or Ezra Chowaiki, who pled guilty to a raft of accusations including fraud in a $16m scandal—and went to jail, as indeed did London advisor Timothy Sammons for scamming clients to the tune of some $30m. Inigo Philbrick is also in jail for relieving dozens of seasoned art professionals of an eye-popping $86m in a series of art deals.
Then there was Anna Delvey/Sorokin, subject of a Netflix series, who bilked friends and patrons out of hundreds of thousands of dollars, promising a new private arts club in Manhattan and boasting of a non-existent trust fund. Or Angela Gulbenkian, trading on her famous name but convicted of defrauding her clients, notably over a $1.4m Yayoi Kusama pumpkin sculpture. She was also jailed.
Gulbenkian’s spending was detailed in court: $10,500 for a private jet; $3,920 at the Café Royal and $16,985 at Harrods among other expenses. Philbrick was notorious for chartering private jets; according to the prosecutor, Sammons used his ill-gotten gains to fund a lavish lifestyle.
These cases have several elements in common. There is the artworld’s endless whirl of openings, parties, alcohol and sometimes drugs, which can lead to a blurring of reality, as well as a feeling of invincibility. This seems to instill misplaced confidence that the next big deal will right the ship and make things good again.
Keeping up with billionaire clients is another trap. Confidence is key: you can hardly be taken seriously if you arrive in a battered taxi at a $50m ranch in California, just when you are negotiating the sale of a $20m Rothko. So the lavish lifestyle—the club memberships, private jets and designer togs—is actually necessary to instil trust in your clients. They need to feel you are one of them, but one who understands art….Having a posh accent, a smart background also helps—à la Philbrick.
But the greatest danger is that the dealer/advisor/agent wants to emulate their clients, to live like them. But they don’t have those billions behind them, so they fund the champagne lifestyle through their business. Which sometimes works, until it doesn’t work anymore, and they end up in court, or worse, in prison. Should we be sad, or cynical? The jury is out.
01/06/23