SDNY Prosecutors Charge Art Dealer in Alleged $20M Fraud Scheme
Among the notable pieces connected to the alleged scheme were works by Jean-Michel Basquiat and Christopher Wool, as well as an untitled 2012 painting by Rudolf Stingel, depicting artist Pablo Picasso.
June 12, 2020 at 03:41 PM
4 minute read
The original version of this story was published on New York Law Journal
Federal prosecutors in Manhattan have charged a former London and Miami-based art dealer with defrauding investors and collectors out of more than $20 million in an alleged scheme to prop up his business.
The U.S. Attorney's Office for the Southern District of New York on Friday announced the unsealing of a criminal complaint against Inigo Philbrick, who prosecutors said specialized in post-war and contemporary fine art sales before going on the run late last year.
According to the complaint, Philbrick, 33, made "material misrepresentations and omissions" to New York-area art collectors, investors and lenders over the course of four years, passing himself off as a dealer of valuable pieces and selling more than 100% ownership in the works without clients' knowledge. Prosecutors alleged that Philbrick sold the artworks as collateral on loans and never disclosed the ownership interests of third parties to buyers and lenders.
Philbrick, who is a U.S. citizen, had been a fugitive since the fall of 2019, when he fled to the South Pacific nation of Vanuatu after defaulting on a $14 million loan, prosecutors said. He was arrested Thursday on charges of wire fraud and aggravated identity theft, and was transported to Guam, where he is expected to be presented in federal court June 15.
"You can't sell more than 100 percent ownership in a single piece of art, which Philbrick allegedly did, among other scams," U.S. Attorney Geoffrey Berman said in a statement announcing the charges. "When his schemes began to unravel, Philbrick allegedly fled the country. Now he is in U.S. custody and facing justice."
Among the notable pieces connected to the alleged scheme were works by Jean-Michel Basquiat and Christopher Wool, as well as an untitled 2012 painting by Rudolf Stingel depicting artist Pablo Picasso.
Prosecutors said that Philbrick's alleged crimes came to light last year, when lenders and investors discovered that he had provided them with false records. After investors filed civil lawsuits in multiple jurisdictions, Philbrick stopped responding to the suits and shuttered his galleries in London and Miami, Berman's office said.
Flight records obtained by investigators showed that he had departed the U.S. around the time the press began reporting on the litigation and had been residing in Vanuatu since October 2019.
"Mr. Philbrick allegedly sought out high-dollar art investors, sold pieces he didn't own, and played games with millions of dollars in other people's money," William F. Sweeney Jr., assistant director in charge of the FBI in New York, said in a statement.
"If convicted, he might have to trade in his jet-set life for a drab federal prison cell," Sweeney said.
Wire fraud carries a maximum prison term of 20 years, and the aggravated identity theft charge carries a mandatory sentence of two years in prison.
As of Friday afternoon, there was no defense attorney listed in the case, and Philbrick could not immediately be reached for comment.
This case is being handled by the money laundering and transnational criminal enterprises unit of the Manhattan U.S. Attorney's Office, with Assistant U.S. Attorneys Jessica K. Feinstein and Cecilia E. Vogel in charge of the prosecution.
READ MORE:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllLitigators of the Week: After a 74-Day Trial, Shook Fends Off Claims From Artist’s Heirs Against UMB Bank
An ‘Indiana Jones Moment’: Mayer Brown’s John Nadolenco and Kelly Kramer on the 10-Year Legal Saga of the Bahia Emerald
‘It's Your Funeral’: Avoiding Doing Damage to Your Client’s Case With Uncivil Behavior
Trending Stories
- 1Call for Nominations: Elite Trial Lawyers 2025
- 2Senate Judiciary Dems Release Report on Supreme Court Ethics
- 3Senate Confirms Last 2 of Biden's California Judicial Nominees
- 4Morrison & Foerster Doles Out Year-End and Special Bonuses, Raises Base Compensation for Associates
- 5Tom Girardi to Surrender to Federal Authorities on Jan. 7
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250