Reuters reported a few days ago that a sophisticated $88 million art investment scam was revealed in New York on March 26. Art dealer Lawrence Salander, 59 (at right), was arrested at his New York home on March 26, when he and his gallery were charged with 100 counts, including grand larceny and securities fraud. Salander pleaded not guilty in New York's Supreme Court and his bail was set at $1 million. He faces up to 25 years in prison on the most serious charge.
Former tennis champion John McEnroe was duped along with Bank of America, investment firms, art owners and collectors. So far, authorities have identified 26 victims of Salander's scheme, including McEnroe, who lost $2 million after investing a half share in two paintings, Arshile Gorky's Pirate I and II. The share in the paintings was sold at the same time to another collector, and McEnroe never recouped the money, authorities said.
Manhattan DA Robert Morgenthau said the scheme, which lasted from 1994 - 2007, included luring investors who paid cash in exchange for shares of ownership of works of art. "He sold artwork not owned by him and kept the money and lured investment money in fraudulent investment opportunities," Morgenthau said. Salander used the money to fund "an extravagant lifestyle" of lavish parties and private jets, he said.
The investigation of Salander, the former owner of Salander-O'Reilly Galleries (shuttered in 2007), continues. Other estates he looked after included paintings of the late father of actor Robert De Niro.
Most of the artworks, which are yet to be valued, are being held in the custody of a bankruptcy court in Poughkeepsie, N.Y. Many of the investors have filed civil claims against Salander and his gallery, which filed for bankruptcy and closed in 2007.
Posted Mar 29th 2009 10:02AM by Lisa Palladino
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