Fraud-Charged Salander Art to Sell at Auction Ahead of Sentence
NEW YORK.- Christie’s International plans to sell Renaissance and 19th-century European sculpture and paintings recovered from what prosecutors called one of the biggest art frauds in New York State history.
The auction of artwork from the defunct Salander- O’Reilly Galleries is scheduled for June 9, according to Christie’s. The 130 lots, including works attributed to the Flemish master Peter Paul Rubens and “the studio of El Greco,” is expected to raise more than $2.5 million, Christie’s said.
Proceeds will benefit people and businesses that filed claims in U.S. Bankruptcy Court, after the gallery on Manhattan’s Upper East Side filed for bankruptcy protection in November 2007.
A court appointed security officer stands guard outside the closed doors of Salander-O'Reilly Galleries in New York on Oct. 19, 2007. Photographer: Louis Lanzano
In March, a year after he was arrested, proprietor Lawrence B. Salander pleaded guilty in New York State Supreme Court to grand larceny and fraud. Salander admitted that he sold artwork he didn’t own and kept the proceeds, collected money for fabricated art-related investment opportunities and sold more than 100 percent interest in single works.
The June 9 sale is of art that creditors haven’t claimed or for which claims have been resolved by bankruptcy court. Each artwork is covered by Art Title Protection Insurance, issued by New York-based ARIS Title Insurance Corp., which protects the buyer against “defective title,” or someone coming forward to claim ownership.
U.S. Bankruptcy Court in January approved a settlement between unsecured creditors and Bank of America Corp.’s First Republic unit that led to the auction. First Republic lent the gallery about $30 million starting in 2002.
Under the settlement, unsecured creditors will receive the first $2.5 million from the sale, minus back taxes the gallery owed. What the bank and unsecured creditors ultimately get is based on a complex formula and any sale tally.
Free on Bail
Salander, 60, is free on $1 million bail. He could be sentenced to as much as 18 years in prison, Justice Michael Obus said when the dealer pled guilty. Salander is scheduled to appear on May 20 at a criminal hearing to discuss the $120 million restitution he was ordered to pay. Salander’s criminal lawyer, Charles Ross, didn’t return calls for comment.
Salander declared personal bankruptcy in 2007. Asked if the dealer can pay his victims back, Thomas Genova, the trustee overseeing the case, said: “I would think not.”
In 2006, the gallery moved to an Italianate Upper East Side mansion that Salander rented for about $154,000 a month. At about the same time, he formed a partnership with investor Donald Schupak and an affiliate of First Republic, according to court papers. Its purpose was to invest in paintings, drawings, sculptures and tapestries created in Europe from the 12th century to about 1725.
‘Buying Sprees’
Mark Borghi, a New York dealer who collects art from that period, said he believes Salander didn’t understand that market.
“The great things make great money,” Borghi said in an interview. “But there aren’t many great things. Larry had a big space to fill and he would go on these enormous buying sprees.”
Salander lived with his family in an Upper East Side townhouse that was recently listed for $14.25 million. A broker handling the property said a sale was expected to close within days. Salander’s 66-acre property in Millbrook, New York, remains on the market, listed at $4.5 million.
In Hudson, New York, an auction of antique furniture and rugs that Salander owned raised $472,067 on Sunday to help repay creditors of his personal bankruptcy.
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