grhb
03-26-2009, 04:09 PM
The former co-owner of a defunct Manhattan art gallery has been charged in a 100-count indictment with stealing $88 million from investors, art owners and Bank of America Corp. (BAC), state prosecutors said.
In a statement, Manhattan District Attorney Robert M. Morgenthau said Lawrence B. Salander, the one-time co-owner and manager of Salander-O'Reilly Galleries LLC, and the gallery have been charged with grand larceny, securities fraud, forgery, falsifying business records and other charges.
Salander, who co-founded the gallery in 1976 and ran its day-to-day operations until it closed in November 2007, faces up to 25 years in prison on the grand larceny charges. The gallery closed in 2007 as a result of an involuntary Chapter 7 bankruptcy filing, which has since been converted to Chapter 11 bankruptcy protection.
A lawyer for Salander didn't immediately respond to a request for comment Thursday.
Morgenthau said Salander, 59 years old, allegedly defrauded 26 victims out of millions of dollars by selling artwork he didn't own and keeping the money and luring people to invest in fraudulent ownership interests involving works of art.
The victims included individuals or estates that owned works of art and consigned them for sale, Morgenthau said. The estates include the heirs to a number of prominent 20th Century American artists, including Stuart Davis, Elie Nadelman, Louis Kahn and Suzy Frelinghuysen, Morgenthau said.
Morgenthau said Salander engaged in a number of unauthorized transactions, including selling pieces below owners' authorized prices, sales of artwork not delivered for sale at the time of the transactions, the use of the pieces as investment vehicles for third parties, and the use of the artworks to satisfy debts owed to third parties.
In the case of Stuart Davis' estate, Salander and the gallery sold more than 50 Stuart Davis works, the bulk without authorization at significantly reduced prices and without notice and payment to the estate, Morgenthau said. The theft totaled more than $6.7 million, he said. The gallery failed to produce or pay for 96 Davis works of art consigned to the gallery by the estate after repeated demands for the return of all works, Morgenthau said.
Salander applied for a personal loan from Bank of America for he and his wife, offering certain artwork as security, Morgenthau said. Several of the pieces were never owned by Salander or his wife, but were owned by other individuals, including retired tennis legend John McEnroe.
As a result, Salander was able to obtain a $2 million loan, Morgenthau said.
Salander used the stolen funds to finance his "mission to corner the market in Renaissance Art" and to support his extravagant lifestyle, including travel on private jets, a lavish party for his wife at the Frick Collection in New York and to purchase a Manhattan townhouse and a 66-acre estate in Millbrook, N.Y., Morgenthau said.
Actor Robert De Niro is among dozens of creditors who have filed claims in the gallery's bankruptcy case. However, he isn't among the victims in Thursday's indictment, Morgenthau's office said. The probe is continuing, Morgenthau said.
In a statement, Manhattan District Attorney Robert M. Morgenthau said Lawrence B. Salander, the one-time co-owner and manager of Salander-O'Reilly Galleries LLC, and the gallery have been charged with grand larceny, securities fraud, forgery, falsifying business records and other charges.
Salander, who co-founded the gallery in 1976 and ran its day-to-day operations until it closed in November 2007, faces up to 25 years in prison on the grand larceny charges. The gallery closed in 2007 as a result of an involuntary Chapter 7 bankruptcy filing, which has since been converted to Chapter 11 bankruptcy protection.
A lawyer for Salander didn't immediately respond to a request for comment Thursday.
Morgenthau said Salander, 59 years old, allegedly defrauded 26 victims out of millions of dollars by selling artwork he didn't own and keeping the money and luring people to invest in fraudulent ownership interests involving works of art.
The victims included individuals or estates that owned works of art and consigned them for sale, Morgenthau said. The estates include the heirs to a number of prominent 20th Century American artists, including Stuart Davis, Elie Nadelman, Louis Kahn and Suzy Frelinghuysen, Morgenthau said.
Morgenthau said Salander engaged in a number of unauthorized transactions, including selling pieces below owners' authorized prices, sales of artwork not delivered for sale at the time of the transactions, the use of the pieces as investment vehicles for third parties, and the use of the artworks to satisfy debts owed to third parties.
In the case of Stuart Davis' estate, Salander and the gallery sold more than 50 Stuart Davis works, the bulk without authorization at significantly reduced prices and without notice and payment to the estate, Morgenthau said. The theft totaled more than $6.7 million, he said. The gallery failed to produce or pay for 96 Davis works of art consigned to the gallery by the estate after repeated demands for the return of all works, Morgenthau said.
Salander applied for a personal loan from Bank of America for he and his wife, offering certain artwork as security, Morgenthau said. Several of the pieces were never owned by Salander or his wife, but were owned by other individuals, including retired tennis legend John McEnroe.
As a result, Salander was able to obtain a $2 million loan, Morgenthau said.
Salander used the stolen funds to finance his "mission to corner the market in Renaissance Art" and to support his extravagant lifestyle, including travel on private jets, a lavish party for his wife at the Frick Collection in New York and to purchase a Manhattan townhouse and a 66-acre estate in Millbrook, N.Y., Morgenthau said.
Actor Robert De Niro is among dozens of creditors who have filed claims in the gallery's bankruptcy case. However, he isn't among the victims in Thursday's indictment, Morgenthau's office said. The probe is continuing, Morgenthau said.