A high-profile New York art adviser with outposts in Tribeca and London is accused of withholding millions of dollars worth of artwork and cash from her clients, leaving collectors and galleries to line up in a court case to recover the lost loot.
(Bloomberg) — A high-profile New York art adviser with outposts in Tribeca and London is accused of withholding millions of dollars worth of artwork and cash from her clients, leaving collectors and galleries to line up in a court case to recover the lost loot.
One example at issue is “The Uncle 3,” a contemporary painting by Adrian Ghenie. Lisa Schiff brokered a $2.5 million deal for the piece between Sotheby’s Hong Kong and real estate heiress Candace Carmel Barasch and collector Richard Grossman.
But she never transferred the full amount, her two clients and now former friends say, claiming they only received $450,000, and are owed about $2 million.
In May, Barasch filed separate suits over the proceeds from the painting and millions more Schiff received to buy artwork that was never received. Lawyers in court filings have said that state and federal prosecutors were looking into the allegations.
More than 50 collectors — including Thomas Hagerty of private equity firm Thomas H. Lee Partners — and galleries — such as Sotheby’s Private Sales department, now claim that Schiff owes them for works worth close to $1 million, court documents show.
To repay any creditors, Schiff appointed a trustee to liquidate at least 800 artworks from her Schiff Fine Art LLC that have a combined market value of $3.9 million.
Some of the most expensive claims are from Hagerty and his wife Jeanne, who accused Schiff of owing them $990,000, and Institute of Contemporary Art Boston trustee Karen Conway and her husband Brian, who filed a claim for “not less than $611,500.”
Schiff first rose to prominence in 2002 with the opening of SFA, eventually winning over clients such as Leonardo DiCaprio. Schiff’s lawyer, John Cahill, declined to comment. Her agency is not contesting the bulk of the lawsuit and instead appointed Douglas J. Pick as trustee to distribute the assets to creditors.
In a June 6 court filing, Cahill said Schiff denied that she was running a Ponzi scheme, but rather “expenses and flawed payment practices left the company with more payment obligations than funds.”
He said in the filing that the criminal investigations were a result of Schiff self-reporting the matter to the New York County District Attorney.
Officials at the district attorney’s office, as well as lawyers for Barasch, didn’t return messages seeking comment. Hagerty and Conway also didn’t return calls seeking comment.
In a report last month, Pick said that 894 works currently in Schiff’s possession have a combined market value of $3.9 million, according to art appraisal company Winston Art Group. In a separate document, Winston Art Group claimed they are unable to locate an additional 108 works, including those by artists such as Damien Hirst, Richard Prince, and Virgil Abloh, that have a combined market value of $1.1 million.
“We want to follow the money,” Pick said. “Where was it deposited and how was it utilized?”
Less than a week after the initial lawsuit was filed, Schiff shut down her office and showroom in Tribeca and an outpost at London’s Cromwell Place.
On May 17, Barasch and her husband Michael filed the second lawsuit against Schiff in state court, alleging that Schiff and SFA Advisory used $2.5 million in funds to “spoil themselves with luxury travel, shopping sprees, and the like,” according to the lawsuit.
In a phone conversation with Barasch in early May, Schiff admitted that her company “dug themselves into a large financial hole that they could not get out of,” and “considered filing for bankruptcy prior to the start of the Covid-19 pandemic, but did not do so because she was afraid of a criminal investigation,” according to Barasch’s court filings.
Barasch said in the lawsuit that Schiff would get to know clients and their families, “including their taste, character and goals in collecting” to help find art that fits these attributes.
“In the past several years and continuing to the present, Ms. Schiff has purported to recognize the lack of transparency in the art world, and has professed to strive for this in dealings with her clients,” according to the lawsuit. “The supposed importance of transparency to Schiff is 180 degrees from her admission to Candace on May 8, 2023, that for years, Schiff and her companies have been engaged in a massive fraud on their clients.”
Before opening SFA, Schiff, who has a masters in art history from the University of Miami, worked at auction house Phillips, de Pury & Luxembourg in New York, and directed Edward Tyler Nahem Fine Art gallery in New York. When she opened her exhibition space in Tribeca, the Financial Times called it “unprecedented.”
(Adds background on Schiff in 18th paragraph.)
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