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Atty: Ex-NY Art Dealer To Admit Nearly $100M Fraud

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  • Atty: Ex-NY Art Dealer To Admit Nearly $100M Fraud

    ATTY: EX-NY ART DEALER TO ADMIT NEARLY $100M FRAUD
    By Jennifer Peltz

    AP
    18 March 10

    NEW YORK - A once-high-flying art dealer plans to admit swindling
    nearly $100 million from a star-studded clientele that included tennis
    great John McEnroe and the estate of actor Robert De Niro's father,
    the dealer's lawyer said Thursday.

    Former gallery owner Lawrence B. Salander was expected to plead guilty
    Thursday to grand larceny and scheme to defraud, attorney Charles
    Ross said. He said Salander would admit to a sweeping scheme that
    prosecutors say involved a dream of dominating the Renaissance art
    market and victimized heirs to a roster of prominent artists.

    "This is a sad day for Mr. Salander. It is, however, a good result
    for him and for those whom he is deeply remorseful about hurting,"
    Ross said. He said Salander, 60, expected to be promised a prison
    sentence of a maximum range of six to 18 years - compared with the
    25 years he could have faced if convicted - and would try to raise
    money to repay his victims.

    The now-closed Salander-O'Reilly Galleries LLC, established in 1976,
    advertised works by artists ranging from 19th-century master Gustave
    Courbet to Armenian-born American abstract expressionist Arshile Gorky.

    Salander is accused of financing a deluxe lifestyle by selling art he
    didn't own and luring clients into bogus art investment opportunities.

    He sold investors shares in artworks that added up to more than
    100 percent and lied about what the backers stood to get in return,
    the Manhattan district attorney's office said. When owners consigned
    art to him to sell, he struck deals below the prices the owners had
    authorized, used the works to satisfy his own debts and balked at
    demands to return the pieces, prosecutors said.

    Prosecutors say McEnroe lost more than $2 million, and the estate of
    abstract expressionist Robert De Niro Sr. lost more than $1 million.

    Earl Davis, son of artist Stuart Davis, lost more than $6.7 million
    after consigning 96 of his father's paintings to Salander for sale,
    according to prosecutors.

    The art broker used the stolen money for such personal luxuries as
    private jet travel and a 66-acre country estate, and to finance
    a self-created campaign to corner the market in Renaissance art,
    prosecutors said.

    The criminal investigation began in October 2007 after allegations
    arose that the gallery was stealing its wealthy clients' art and
    money. Soon afterward, a judge halted sales and ordered the gallery's
    contents seized.

    The process of dismantling the business continues in bankruptcy court.

    Some consigned artworks have been returned to their owners, while
    creditors recently hashed out a plan to sell off thousands of other
    pieces the gallery held, said Robert J. Feinstein, creditor for
    the lawyers.
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