By Emily Waldorf
The latest financial scandal to unravel in the face of the recession involves a well-known Upper East Side art dealer who supported a lavish lifestyle through a high-end gallery. Lawrence B. Salander sold paintings he didn’t own to multiple buyers, cheating investors, collectors, and artists to to the tune of $88 million. He was just arraigned in Manhattan Criminal Court, and, if he is convicted, he could face a prison term up to 25 years.
According to Judd Tully’s article, “Art World Madoff Arraigned in Manhattan Court,” Manhattan District Attorney Robert M. Morgenthau described Mr. Salander as a fantastic salesman:
This guy ought to be selling toxic loans for the government…One extraordinary sequence involved Brown Still-Life, a Stuart Davis painting owned 100 percent by Earl Davis and consigned to the gallery. In July 1994, a 50 percent stake was sold to Gerald Peters Gallery. In May 2005,Bruce Springsteen manager Jon Landau bought another 50 percent stake in the painting. Then, later that same month, Salander sold another 50 percent share to collector Elaine Rosenberg. And three months later, in August 2005, he sold the entire painting, to San Francisco/Santa Fe gallery Owings-Dewey Fine Art.
Other victims include tennis star John McEnroe and hedge fund manager Roy Lennox. The indictment accuses Salander and Salander-O’Reilly of larceny, fraud, forgery, falsifying business records and perjury. Salander pleaded not guilty to all of the charges at the arraignment, and his bail was set at $1 million.
More coverage:
Indicted Art Dealer Salander Waits in Jail, ‘A Broken Person’ (Bloomberg)