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Sale of Botticelli Painting May Help Defrauded Salander Victims

July 17, 2012

Botticelli, Madonna and Child, c. 1500.

A Botticelli Madonna and Child that would have been part of Salander-O’Reilly’s 2007 exhibition Masterpieces of Art: Five Centuries of Painting and Sculpture may now be sold to begin paying off scores of the gallery’s creditors who are owed upward of $100 million. According to Bloomberg News:

A painting attributed to Sandro Botticelli and valued at $9.5 million may provide some relief to creditors of Salander-O’Reilly Galleries, more than four years after they fell victim to New York’s biggest-ever art fraud.

Earlier this week, a New York federal court judge ruled that although a consignor still owns “Madonna and Child” (circa 1500), state law may permit the bankrupt gallery to sell it to benefit creditors.

None of the hundreds of creditors have recovered any money since the November 2007 bankruptcy, said Ilan Scharf, a lawyer who represents the trustee responsible for selling most of the approximately 4,000 artworks in the Upper East Side gallery and its warehouses.

In 2010, proprietor Lawrence Salander pleaded guilty to stealing more than $100 million from investors and customers, including Robert De Niro and John McEnroe.

New York art dealer Lawrence Salander, center, and his two sons enter the courtroom at New York state court in New York, on Aug. 3, 2010. Salander was sentenced to six to 18 years in prison for grand larceny and fraud. Photographer: Paul Goguen/Bloomberg

In his spending sprees, Salander acquired heaps of Renaissance art, two lavishly appointed homes, jewelry for his now-ex-wife, Julie Dowden, rare books, furniture and private-jet rentals.

The dealer admitted to pocketing proceeds from selling art he didn’t own and peddling half-shares in the same work three or more times. He’s serving 6 to 18 years in state prison.

“Infinitesimal Amount”

“I don’t expect to get anything,” said Roy Lennox, a former hedge-fund manager with Caxton Associates who lost more than $3 million in what prosecutors described in court as a Ponzi scheme. “Maybe an infinitesimal amount. There are too many people and not enough stuff. And some of the stuff is pure junk.”

The Botticelli may offer millions for creditors, after U.S. District Judge Cathy Seibel ruled this week against the owner’s effort to wrest it from bankruptcy-court control. A similar work sold in 2006 for $7.5 million at Christie’s in London.

One Comment leave one →
  1. July 17, 2012 10:26 PM

    It saddens me to see fine art become a commodity used in a ponzi scheme.

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