Art

At Art Fraud Trial, Sotheby’s Is Pressed on Role in Sales to Russian Oligarch

Published

8 months ago

January 17, 2024

The auction house is accused of helping an art dealer who the oligarch says defrauded him in several sales. A Sotheby’s specialist involved in some of the transactions defended his conduct.

The painting Sotheby’s was trying to sell was a newly discovered work by one of the world’s greatest artists, Leonardo da Vinci. It was known as the “Salvator Mundi” and was a depiction of Christ.

But it had a code name: Jack.

Samuel Valette, a Sotheby’s specialist, testified in a Manhattan courtroom on Wednesday about how one day in March 2013 he had taken the painting crosstown in an S.U.V. from the auction house’s headquarters on York Avenue to a premier apartment overlooking Central Park.

It was one of the many trips he had made to display paintings for a prospective buyer, Valette said. He was, as usual, accompanied by security personnel, and the painting, already valued at tens of millions of dollars, was in a protective crate.

The apartment was owned by Dmitry Rybolovlev, a Russian oligarch who has sued Sotheby’s, accusing the auction house of aiding a Swiss dealer who he says defrauded him in the sale of several masterpieces.

Valette said he had not known whose apartment it was when he visited 15 Central Park West. Inside the home were two men, he said: the Swiss dealer, Yves Bouvier, a frequent client who had arranged the viewing, and Rybolovlev, whom he had met before.

But Valette insisted under questioning by Rybolovlev’s lawyer, Daniel J. Kornstein, that he had no idea whom the apartment belonged to.

“Are you saying, Mr. Valette, that you arranged for taking this very expensive painting to an apartment, and you didn’t know whose apartment it was?” Kornstein asked.

“I didn’t know whose apartment it was, that is correct,” Valette said, adding that insurers only cared to know the address and that Sotheby’s would be present.

“At the time, I think, Mr. Bouvier had told me that it was a big apartment building on Central Park West,” he said.

Valette’s mind-set — what he knew or did not know in his dealings with Bouvier — is at the heart of Rybolovlev’s case against the auction house, which has been the subject of a federal court trial now in its second week in Manhattan. Valette was the Sotheby’s executive who dealt with Bouvier in the sale of the da Vinci and three other works that are the focus of the case.

In each instance, Bouvier bought the works through Sotheby’s and then resold them to Rybolovlev at large markups. Rybolovlev says Bouvier tricked him by pretending to act as his art adviser in the transactions, even pretending to negotiate with phantom third parties when he was actually the owner of the works. He has argued that Valette understood what was going on and helped him.

Sotheby’s denies that. Bouvier, who is not a defendant in the case, has denied any wrongdoing and says it was always clear that he was acting as an independent dealer.

After the viewing on Central Park West, which Rybolovlev says was set up to give him an opportunity to examine the work, Bouvier purchased the da Vinci for $83 million, only to sell it a day later to Rybolovlev for $127.5 million.

Sotheby’s officials have argued that they had no knowledge of any fraud, if it ever happened, and have put forward the argument at trial that if anyone was to blame for buying overpriced art, it was Rybolovlev himself for not protecting himself against Bouvier’s actions.

But for Rybolovlev, Valette is central to the argument that Sotheby’s was knowingly part of a scheme to defraud him out of hundreds of millions of dollars.

Though Rybolovlev has accused Bouvier in court papers of defrauding him in the purchase of 38 works, only 12 of the works were bought by Bouvier in private sales arranged by Sotheby’s, and only four are the focus of the trial.

Bouvier has fought Rybolovlev’s accusations in legal disputes in Europe and Asia that ended after the parties reached a confidential settlement in Geneva late last year.

Rybolovlev’s lawyers have argued that Sotheby’s, which earned a $3 million commission on the sale of the da Vinci to Bouvier, was guided in its actions by its interest in pleasing a man who had become an important client.

In questioning Valette on Wednesday, Kornstein asked a wide range of questions about Valette’s input on the transactions between Bouvier and Rybolovlev. He asked, for example, why Valette had created Sotheby’s documents that Bouvier would eventually forward to Rybolovlev to persuade him to buy art; why Valette had created valuations that Rybolovlev has argued concealed the markups from him; and why Valette had kept Bouvier’s name out of transaction histories.

Valette replied that he knew Bouvier had resold art and that at some point he had learned that Rybolovlev was one of Bouvier’s clients. But he said he had never known which works Bouvier was selling to Rybolovlev and that whatever he had done constituted accepted practices and courtesies undertaken by specialists selling works to a buyer.

As far as he was concerned, he said, “Mr. Bouvier was the buyer.”

During earlier testimony on Tuesday, Valette had told the court that he did not know Bouvier was flipping the artworks to Rybolovlev

“I understand he was trying to sell them,” Valette said of Bouvier. “I didn’t understand that he was buying them on behalf of anybody.”

During Valette’s testimony on Wednesday, he was asked about an insurance valuation that Sotheby’s had provided for the da Vinci in 2015, after Bouvier had begun to suspect that he had paid large markups on the works he had purchased through Bouvier.

In the document, which was forwarded to Rybolovlev, the insurance valuation of the painting was increased despite the initial reservations of a Sotheby’s colleague, according to court papers, and the accompanying cover letter was edited to delete a reference to Bouvier’s earlier acquisition of the artwork.

Rybolovlev has argued that those changes were meant to help Bouvier conceal his alleged scheme.

Valette acknowledged on the stand that he had made the changes at Bouvier’s request. But he said they were the kinds of changes Sotheby’s would make for any high-end client and that eventually he had only gone with a valuation that had been approved by other Sotheby’s experts.

“I didn’t think about it, to be fair,” Valette said. “He asked for these two minor changes.”

He was also asked why, in the case of a Modigliani sculpture that Rybolovlev bought from Bouvier, he had revised an estimated value upward. Originally, he told Bouvier in a 2012 email that the artwork was worth at least 70 million to 90 million euros, or perhaps even more, only to revise that estimate to €80 million to €100 million less than 12 hours later. Bouvier forwarded the higher projection to Rybolovlev’s aide. Valette said the adjustment had been made because Bouvier had wanted him to be more specific.

“He wanted me to precise my thoughts,” he said.

Colin Moynihan contributed reporting.

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Art

Calvin Lucyshyn: Vancouver Island Art Dealer Faces Fraud Charges After Police Seize Millions in Artwork

Published

3 days ago

September 13, 2024

Harry Miller

In a case that has sent shockwaves through the Vancouver Island art community, a local art dealer has been charged with one count of fraud over $5,000. Calvin Lucyshyn, the former operator of the now-closed Winchester Galleries in Oak Bay, faces the charge after police seized hundreds of artworks, valued in the tens of millions of dollars, from various storage sites in the Greater Victoria area.

Alleged Fraud Scheme

Police allege that Lucyshyn had been taking valuable art from members of the public under the guise of appraising or consigning the pieces for sale, only to cut off all communication with the owners. This investigation began in April 2022, when police received a complaint from an individual who had provided four paintings to Lucyshyn, including three works by renowned British Columbia artist Emily Carr, and had not received any updates on their sale.

Further investigation by the Saanich Police Department revealed that this was not an isolated incident. Detectives found other alleged victims who had similar experiences with Winchester Galleries, leading police to execute search warrants at three separate storage locations across Greater Victoria.

Massive Seizure of Artworks

In what has become one of the largest art fraud investigations in recent Canadian history, authorities seized approximately 1,100 pieces of art, including more than 600 pieces from a storage site in Saanich, over 300 in Langford, and more than 100 in Oak Bay. Some of the more valuable pieces, according to police, were estimated to be worth $85,000 each.

Lucyshyn was arrested on April 21, 2022, but was later released from custody. In May 2024, a fraud charge was formally laid against him.

Artwork Returned, but Some Remain Unclaimed

In a statement released on Monday, the Saanich Police Department confirmed that 1,050 of the seized artworks have been returned to their rightful owners. However, several pieces remain unclaimed, and police continue their efforts to track down the owners of these works.

Court Proceedings Ongoing

The criminal charge against Lucyshyn has not yet been tested in court, and he has publicly stated his intention to defend himself against any pending allegations. His next court appearance is scheduled for September 10, 2024.

Impact on the Local Art Community

The news of Lucyshyn’s alleged fraud has deeply affected Vancouver Island’s art community, particularly collectors, galleries, and artists who may have been impacted by the gallery’s operations. With high-value pieces from artists like Emily Carr involved, the case underscores the vulnerabilities that can exist in art transactions.

For many art collectors, the investigation has raised concerns about the potential for fraud in the art world, particularly when it comes to dealing with private galleries and dealers. The seizure of such a vast collection of artworks has also led to questions about the management and oversight of valuable art pieces, as well as the importance of transparency and trust in the industry.

As the case continues to unfold in court, it will likely serve as a cautionary tale for collectors and galleries alike, highlighting the need for due diligence in the sale and appraisal of high-value artworks.

While much of the seized artwork has been returned, the full scale of the alleged fraud is still being unraveled. Lucyshyn’s upcoming court appearances will be closely watched, not only by the legal community but also by the wider art world, as it navigates the fallout from one of Canada’s most significant art fraud cases in recent memory.

Art collectors and individuals who believe they may have been affected by this case are encouraged to contact the Saanich Police Department to inquire about any unclaimed pieces. Additionally, the case serves as a reminder for anyone involved in high-value art transactions to work with reputable dealers and to keep thorough documentation of all transactions.

As with any investment, whether in art or other ventures, it is crucial to be cautious and informed. Art fraud can devastate personal collections and finances, but by taking steps to verify authenticity, provenance, and the reputation of dealers, collectors can help safeguard their valuable pieces.

Art

Ukrainian sells art in Essex while stuck in a warzone – BBC.com

Published

2 weeks ago

September 2, 2024

Harry Miller

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Ukrainian sells art in Essex while stuck in a warzone BBC.com

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Art

Somerset House Fire: Courtauld Gallery Reopens, Rest of Landmark Closed

Published

4 weeks ago

August 18, 2024

Harry Miller

The Courtauld Gallery at Somerset House has reopened its doors to the public after a fire swept through the historic building in central London. While the gallery has resumed operations, the rest of the iconic site remains closed “until further notice.”

On Saturday, approximately 125 firefighters were called to the scene to battle the blaze, which sent smoke billowing across the city. Fortunately, the fire occurred in a part of the building not housing valuable artworks, and no injuries were reported. Authorities are still investigating the cause of the fire.

Despite the disruption, art lovers queued outside the gallery before it reopened at 10:00 BST on Sunday. One visitor expressed his relief, saying, “I was sad to see the fire, but I’m relieved the art is safe.”

The Clark family, visiting London from Washington state, USA, had a unique perspective on the incident. While sightseeing on the London Eye, they watched as firefighters tackled the flames. Paul Clark, accompanied by his wife Jiorgia and their four children, shared their concern for the safety of the artwork inside Somerset House. “It was sad to see,” Mr. Clark told the BBC. As a fan of Vincent Van Gogh, he was particularly relieved to learn that the painter’s famous Self-Portrait with Bandaged Ear had not been affected by the fire.

Blaze in the West Wing

The fire broke out around midday on Saturday in the west wing of Somerset House, a section of the building primarily used for offices and storage. Jonathan Reekie, director of Somerset House Trust, assured the public that “no valuable artefacts or artworks” were located in that part of the building. By Sunday, fire engines were still stationed outside as investigations into the fire’s origin continued.

About Somerset House

Located on the Strand in central London, Somerset House is a prominent arts venue with a rich history dating back to the Georgian era. Built on the site of a former Tudor palace, the complex is known for its iconic courtyard and is home to the Courtauld Gallery. The gallery houses a prestigious collection from the Samuel Courtauld Trust, showcasing masterpieces from the Middle Ages to the 20th century. Among the notable works are pieces by impressionist legends such as Edouard Manet, Claude Monet, Paul Cézanne, and Vincent Van Gogh.

Somerset House regularly hosts cultural exhibitions and public events, including its popular winter ice skating sessions in the courtyard. However, for now, the venue remains partially closed as authorities ensure the safety of the site following the fire.

Art lovers and the Somerset House community can take solace in knowing that the invaluable collection remains unharmed, and the Courtauld Gallery continues to welcome visitors, offering a reprieve amid the disruption.

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