Tags: Bribery | Art | Rybolovlev | Bouvier

Allegations of Bribery, Rip-Offs Rock the Art World

Monday, 15 June 2015 10:01 AM Current | Bio | Archive

In November 2012, billionaire hedge fund manager and art collector Steve Cohen and his firm SAC Capital plead guilty to insider trading. Cohen stopped managing funds for outsiders and paid a $1.2 billion fine.

This year, he became involved with an international art fraud case, after billionaire Dmitry Rybolovlev attended a St. Bart’s New Year’s dinner at Eden Rock Resort with Cohen’s long-time art consultant Sandy Heller, who disclosed to Rybolovlev that Cohen had just sold "Nude on a Blue Cushion" by Modigliani for $93.5 million to an anonymous buyer.

If Heller knew it was Rybolovlev who purchased the painting in a blind sale for $118 million (including a $2.35 million commission) from Swiss businessman Yves Bouvier, he probably would have kept his mouth shut.

Yves Bouvier is the powerful majority shareholder and president of Natural Le Coultre, S.A., a global luxury storage company overseeing freeports in tax-free zones in Singapore, Geneva, and Luxembourg. His climate-controlled warehouses are repositories for more than $300 billion of art, jewels, wine, and collectibles owned by some of the world’s wealthiest collectors.

He also owns shipping companies and acts as an independent middleman between top art buyers and sellers. In other words, he’s got every angle covered when brokering masterworks to billionaires.

Bouvier has been in the catbird's seat working with rich collector-investors who put their most expensive art and objects in his freeports, where assets can rise in value and be sold tax free. Freeports have also been known to be havens where smugglers and thieves hide stolen artworks, and because freeports rarely are inspected by authorities crimes go undetected.

Rybolovlev was enraged when he realized Bouvier added on $22 million for himself in the Modigliani sale, but other dealers may have gotten a cut. Rybolovlev feared Bouvier tacked on over $100 million for 40 other art works sold to him, and he has since discovered that two Picassos Bouvier sold him were stolen.

Rybolovlev — worth approximately $10 billion — has one of the world’s most impressive art collections (owned by a family trust) and he expects to be treated fairly. After learning he had overpaid for the Modigliani, he quickly filed a criminal complaint against Bouvier, who was indicted for fraud and complicity in money laundering.

Rybolovlev now has accused Bouvier of adding $52.5 million to a Leonardo Da Vinci painting that he purchased for $127.5 million, and other buyers from the U.S., Asia, and Britain have joined the fight to incarcerate Bouvier. As this case unfolds, an inner circle of sleazy dealers, brokers, and middle men probably will surface.

After Bouvier (and a female accomplice) were arrested for fleecing Rybolovlev and forging documents to inflate art sales, the most powerful dealers in the freewheeling international art community now worry that the lawsuit might unveil too much of their playground — the sleazy, secretive underbelly of the art world where insider information runs rampant and billionaires continuously flip pictures or are fleeced.

This is where real prices, true ownership, the identity of buyers and sellers, and genuine documentation are tightly guarded in secrecy. Out of approximately $54 billion in art sales last year, over 50 percent were private sales. With so much at stake, this lawsuit pits collectors against private brokers and it looks as if it’s going to be a bloodbath.

After Bouvier feebly accused Rybolovlev of owing him “tens of millions of euros” for a $186 million canvas titled "No.6" by Mark Rothko (a world record), authorities froze $500 million of his Singapore assets, his Geneva office was raided, and other collectors accused him of overcharging them for artwork by Degas, Gauguin, Magritte, Picasso, and Toulouse-Lautrec.

Like many who launder money, Bouvier allegedly used offshore companies to hide artwork sales. No one knows for certain what he is worth or how much money he has hidden, but it is estimated in the billions. Rybolovlev wasn’t his only client!

Although most of us consider $100 million a lot of money for a painting, it seems as if the top stratosphere considers it chump change. They have so much wealth they don’t know what to do with it, so they join the “100 million dollar club” and put their cash in top-drawer artists of renown.

They don’t consider $100+ million too much to pay for what they want. After all, the Qatar Museum spent $250 million for Paul Cézanne’s "The Card Players" and a whopping $300 million for Paul Gauguin’s "When Will You Marry?," making it the most expensive piece of art ever sold!

The case against Bouvier could expose the opaque art world’s dealings in tax fraud, bribery, blackmail, money laundering, outrageous price mark-ups, and more. The art world is holding its breath, waiting to see who goes down and who remains standing among the megadealers worldwide.

Unless the world’s financial bubble bursts, prices most likely will continue to rise for the best art, and from time to time, other naïve buyers will sue sneaky con-artist sellers for fraudulently ripping them off.

Patricia Jobe Pierce is a freelance writer, art historian, art dealer-consultant, certified AAA appraiser, public speaker, photographer and American art authenticator for museums, auction houses and collectors. She graduated from Boston University with a BFA in 1965, is owner and director of Pierce Galleries, Inc. in Nantucket and Hingham, Mass., and is author of many works, including, "Art Collecting & Investing: The Inner Workings and the Underbelly of the Art World." For more of her submissions, Click Here Now.

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In November 2012, billionaire hedge fund manager and art collector Steve Cohen and his firm SAC Capital plead guilty to insider trading. Cohen stopped managing funds for outsiders and paid a $1.2 billion fine. This year, he became involved with an international art fraud case.
Bribery, Art, Rybolovlev, Bouvier
Monday, 15 June 2015 10:01 AM
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