UNITED STATES NEWS

Russian billionaire loses art fraud suit against Sotheby’s

Jan 30, 2024, 5:32 PM | Updated: Jan 31, 2024, 9:58 am

NEW YORK (AP) — A Russian billionaire art collector lost a legal fight with Sotheby’s on Tuesday, when a U.S. jury sided with the auction house in a lawsuit over claims that the businessman was ripped off while assembling a trove of works that included a famous painting known as “the lost Leonardo.”

A New York federal jury deliberated for a few hours before reaching a decision in Dmitry Rybolovlev’s case against Sotheby’s, Tearing up when he testified earlier this month, he said he’d not only lost money but trust.

Sotheby’s maintained it knew nothing of any misconduct and said it had followed all legal, financial and industry standards. It cast the decision Tuesday as a mark of total vindication.

“Today’s ruling reaffirms Sotheby’s long-standing commitment to upholding the highest standards of integrity, ethics and professionalism in all aspects of the art market,” the auction house said in a statement after the verdict.

However, Rybolovlev lawyer Daniel Kornstein said that “secrecy made it difficult to prove a complex aiding and abetting fraud case.”

“This case achieved our goal of shining a light on the lack of transparency that plagues the art market,” the attorney said, calling for reforms that “must be made outside the courtroom.”

Rybolovlev, 57, spent $2 billion from 2002 to 2014 to build a prime art collection featuring works by such giants as Picasso, Rodin, Modigliani, Klimt, Magritte and Leonardo da Vinci. For help finding and acquiring art, he turned to Swiss broker Yves Bouvier.

The collector testified that he trusted Bouvier “like family,” even inviting him to small birthday parties — before coming to believe that the art dealer was cheating him. He alleged that Bouvier hugely padded the prices that Rybolovlev was paying and pocketing the difference, along with his agreed-upon 2% commission.

Bouvier and Rybolovlev settled in December for undisclosed terms, according to Bouvier’s lawyers. They said this month that he “strongly objects to any allegation of fraud.”

In private transactions, Sotheby’s sold Bouvier some works that he then resold to Rybolovlev. The billionaire’s lawyers argued that the auction house either knew — or should have known — that Rybolovlev was getting cheated and notified him.

“So it’s not an issue of money. Well, not only of money,” Rybolovlev said, through a court interpreter on the witness stand. “It’s important for the art market to be more transparent. Because … when the largest company in this industry is involved in actions of this sort, you know, clients don’t stand a chance.”

Sotheby’s lawyer Sara Shudofsky argued that the businessman was “trying to make an innocent party pay for what somebody else did to him.” She said that Rybolovlev didn’t ask enough questions of Bouvier or take enough steps to guard against being conned.

Rybolovlev accused Bouvier of fraud involving 38 artworks. Only four were at issue in the trial, including da Vinci’s “Salvator Mundi, ” a portrait of Jesus Christ. Its whereabouts were unknown for centuries.

Rybolovlev’s lawyers said Bouvier bought it from Sotheby’s for $83 million, then sold it to the billionaire a day later for over $127 million.

In 2017, Rybolovlev sold it through Christie’s for a historic $450 million and it became the most expensive painting ever sold at auction.

After the verdict, Bouvier said in a statement: “The New York court proceedings were a surreal charade in which people argued over an alleged fraud that had never happened.”

His Geneva-based lawyers, David Bitton and Yves Klein, said the trial’s outcome was “no surprise.”

“It would have been absurd for the New York court to find the existence of a fraud that no other authority has ever admitted, despite multiple proceedings initiated around the world, notably in Singapore, Hong Kong, Monaco and Geneva,” they said in a statement.

United States News

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Russian billionaire loses art fraud suit against Sotheby’s