Lisa Schiff, as soon as a sought-after artwork adviser with a clientele that included Hollywood A-listers like Leonardo DiCaprio, has been sentenced to 2.5 years in jail for orchestrating a multimillion-dollar fraud scheme that unraveled in 2023. She is because of give up on July 1 and is topic to 2 years of supervised launch after her jail time period.
In October, Schiff, who constructed her fame as an professional in blue-chip modern artwork, admitted to defrauding shoppers of a minimum of $6.4 million via a collection of misleading transactions that prosecutors have likened to a Ponzi scheme.
On the sentencing listening to, held at Thurgood Marshall United States Courthouse in downtown Manhattan, Schiff was wearing a white collared shirt, inexperienced sweater, and a black skirt and her hair tied in a excessive, tidy bun.Earlier than proceedings started, she targeted on a sheet of printed sheet of remarks and apologies, that she would later learn to the gallery, which included artist Nicole Wittenberg, and former shoppers Candice and Michael Barasch.
“I’m standing right here as a prison, who harm shoppers, colleagues, and associates,” Schiff stated, studying her ready remarks from a podium within the courtroom. She then turned to the gallery and apologized to her victims by identify. “I’m standing right here a responsible individual,” she stated, as her voice started to tremble and crack, tears filling her eyes. I’m right here and prepared.”
Her assertion proved to be chilly consolation for the victims in attendance, who, all through the continuing shook their heads or rubbed their temples when Schiff’s lawyer, Randy Zelin, outlined the “super quantity of cooperation” between Schiff and the federal government in getting works and a reimbursement to her victims.
Michael Barasch, too, gave a press release, telling the decide, “The victims are extra than simply names on a chunk of paper. We’re individuals who have been betrayed.” He advised the decide to think about that, solely per week earlier than she turned herself into the authorities Schiff requested the Barasches for $190,000 for works they “merely needed to have” of their assortment. “This isn’t somebody who was racked with guilt,” he stated. “If she was, why did she proceed to steal from us?”
“Lisa, your disgraceful conduct goes past cash,” Barasch stated, dealing with Schiff. “You broke my spouse’s coronary heart. For months, she’s been weeping. You had been her finest good friend…or so she thought. Disgrace on you.”
For almost twenty years, Schiff positioned herself as a tastemaker and monetary strategist within the artwork world, advising collectors on acquisitions, gross sales, and long-term funding methods. She operated Schiff Fantastic Artwork, an advisory agency specializing in high-end modern artists corresponding to Adrian Ghenie, Christopher Wool, and Mark Bradford. She cultivated a picture of experience and exclusivity, incessantly showing on panels and in interviews discussing the market’s inside workings.
Her success was fueled partly by her shut relationships with main galleries, public sale homes, and collectors, which allowed her to safe sought-after works earlier than they reached the open market. However beneath the floor, Schiff’s enterprise was constructed on deception. Prosecutors have alleged that as a substitute of correctly managing funds for shoppers, she routinely misappropriated cash from gross sales and acquisitions to cowl private bills, repay earlier shoppers, and keep the phantasm of economic stability.
Carmel Barasch and Richard Grossman had been the primary to take authorized motion in opposition to Schiff. In a lawsuit centered round a $2.5 million Adrian Ghenie portray, Barasch and Grossman alleged that Schiff had led a “Ponzi scheme” that concerned “taking cash from one shopper to pay one other,” all in an effort to to fund what they described as her “lavish life-style.”
The collectors stated that they had entrusted Schiff with promoting the Ghenie portray at Sotheby’s in Hong Kong, and whereas they claimed to have obtained a few of the cash owed to them, additionally they alleged that Schiff had failed to show over $1.8 million due as a part of the transaction. That cash, Barasch and Grossman claimed, was diverted to Schiff’s “procuring sprees” and different private bills, corresponding to stays at luxurious resorts and limousine rides.
This didn’t seem like an remoted case. In a separate lawsuit, the Baraschs additionally alleged that that they had given $6.6 million to Schiff with the intention of shopping for works by Wangechi Mutu, Sarah Lucas, and plenty of others. However Schiff by no means gave these works to the Barasches, the lawsuit claimed, and sellers allegedly stated they had been nonetheless owed cash for the purchases.
Because the authorized course of continued for these two fits, a listing submitted to the courtroom revealed that, as of mid-2023, Schiff nonetheless held some 900 artworks value $3.3 million in her agency’s possession. Her agency is now defunct, and a few of these artworks have begun heading to sale in auctions run by courts and Phillips.
Different victims have since come ahead alleging related tales, revealing a sample of delayed funds, lacking funds, and false guarantees. Some collectors stated they paid Schiff substantial sums for works that had been by no means delivered, whereas others stated they trusted her to facilitate gross sales that had been by no means accomplished. Schiff allegedly moved cash between accounts, fabricated wire switch confirmations, and stalled shoppers with elaborate excuses after they demanded reimbursement.
By the point her scheme collapsed, Schiff had already been scuffling with monetary mismanagement for years. She filed for chapter in Might 2023, revealing a tangled internet of money owed and unpaid obligations.
Schiff’s fall from grace despatched shockwaves via the artwork world, elevating questions concerning the lack of oversight in high-value personal transactions. Whereas she has pleaded responsible and expressed regret, a lot of her former shoppers stay unconvinced, viewing her admissions—significantly an interview with the New York Occasions—as an try and safe a lighter sentence.
In a sentencing memo, the federal government argued that Schiff deserved a “substantial time period of imprisonment” with a purpose to deter and dissuade others from committing related offences in a market that’s constructed on belief, relationships, and confidentiality. Prosecutors argued that “the reliance on artwork sellers and advisors as intermediaries to trade funds, talk between patrons and sellers, and take custody of artworks” leaves ample alternative for the sort of fraud Schiff copped to.
Within the artwork world, related instances have filtered via the courts at a gentle tempo for years, from the Bouvier Affair, which pitted Russian billionaire Dimiti Rybolovlev in opposition to his erstwhile artwork advisor, the freeport magnate Yves Bouvier, to Tempo Gallery’s 2022 lawsuit in opposition to a person who claimed to be a descendent of Pointillist George Seurat and who bought the gallery a bogus drawing by the artist with phony paperwork.
The final blockbuster fraud case that shook the artwork world concerned Inigo Philbrick, an up-and-coming wunderkind artwork vendor who, in 2021, pleaded responsible to wire fraud by overselling shares of artworks, typically in works that he didn’t personal, and utilizing related works to safe loans. In Might 2022 he was sentenced to seven years in jail. He was launched in 2024, three years shy of his full sentence (two of these years had been served earlier than he was sentenced. (Philbrick has since began his personal comeback tour.)
In a written assertion given to the courtroom, one in all Schiff’s victims who described herself as an ARTnews Prime 200 collector and the individual most affected by Schiff’s fraud (the sufferer’s names are redacted) stated that regardless of Schiff’s publish guilty-plea feedback to the press—particularly the February profile within the Occasions during which Schiff claimed that she was depressing when she was utilizing her shopper’s cash for luxurious holidays and designer garments—she nonetheless missed the purpose.
“There isn’t a phrase indicating she understands the impression of her actions on the folks she stole from. The main target remains to be on herself,” the collector wrote, “I’ve heard that Lisa is working with different former shoppers, has apologized to them, and her prison legal professional has talked about her desirous to make issues proper. I’ve not seen any motion like this by Lisa towards my household, or demonstrating regret.”
The letter additionally supplied bullet pointed examples of how Schiff selected to spend her cash, or fairly, the cash she had entry to, together with shopping for her son 12-year-old son $600 Smythson customized leatherbound notebooks for elementary college, spending $2 million to renovate the rented house she used as an workplace/storefront in Tribeca, her $25,000 a month house in the identical neighborhood, and spending $30,000 in two visits to a Loewe boutique in Paris within the firm of one in all her victims. There are eight related letters.
The drama surrounding Schiff represented a fall from grace for an adviser who had gained consideration within the press as somebody who might demystify the inside workings of the artwork world. “My predominant job is to make the artwork world clear, to assist empower collectors,” she advised the Monetary Occasions in 2017. “It’s such a posh world and really opaque.”
She amassed a loyal following alongside the best way. Her connections included DiCaprio, who reportedly bought a Basquiat portray via Schiff, and the actress Lisa Edelstein, who would in the end mount a present of her work at Schiff’s advisory.
