At Trial, Sotheby’s Says Russian Oligarch Was Sloppy in Buying Art

As the opening witness in a civil art fraud trial this week, Mikhail Sazonov testified that his employer, a Russian oligarch, had been tricked to overspend by a Swiss art dealer and that those markups had been boosted by the evaluations of artworks supplied by a Sotheby’s executive.

But during cross-examination on Wednesday, a lawyer for the auction house barely mentioned that employee, Samuel Valette. Instead, the lawyer, Sara Shudofsky, portrayed Sazonov and his boss, Dmitry Rybolovlev, a billionaire who earned his fortune in the potash industry and the owner of Monaco’s soccer team, as overly credulous and lax in their review of their art transactions.

The lawyer began her questioning by running through a litany of claims that the Swiss dealer, Yves Bouvier, had made in emails, all of which she depicted as false and some of which described negotiations with fictitious sellers that never took place.

“At the time of these email exchanges you believed Mr. Bouvier’s lies?” Shudofsky asked.

“That’s right,” Sazonov replied.

Sotheby’s is the defendant in the trial, in Manhattan, which stems from the sale of some of the 38 artworks that Rybolovlev bought for more than $2 billion over a period of years with Bouvier’s help. A dozen of the sales involved Sotheby’s, and the trial is focusing on the sales of four specific works — a Modigliani sculpture and paintings by da Vinci, Klimt and Magritte.

Rybolovlev has said that he believed that Bouvier, who is not a defendant in the case, was acting as a commissioned consultant, assisting him in obtaining rare artworks at a good price. Bouvier has said he was operating as an independent dealer, not solely as an adviser, and was free to charge what he wanted for a work.

What is undisputed is that Bouvier purchased dozens of masterpieces that Rybolovlev had expressed an interest in for one price and then flipped them to Rybolovlev at a steep increase, at times claiming to be engaged in haggling with a phantom seller.

Sotheby’s has argued that it was unaware of any fraud and that Rybolovlev, a wealthy man with the assets to secure business expertise and legal help, has only himself to blame if he overpaid for the collection he built.

But lawyers for Rybolovlev have accused Sotheby’s of assisting Bouvier in a “breathtaking fraud,” saying that Valette, a specialist in the sale of Impressionist and Modern art, provided inflated appraisals and left Bouvier’s name out of transaction histories.

To bolster that assertion, Rybolovlev’s lawyers have cited the case of “Salvator Mundi,” a depiction of Christ by da Vinci, which in 2017 became the most expensive work ever sold at auction. In 2013, Bouvier bought the painting for $83 million and then sold it the next day to Rybolovlev for $127.5 million while pretending that he had bargained with an unnamed owner whom he described as “a real tough customer.”

In 2015, when Rybolovlev was becoming suspicious of him, Bouvier asked Sotheby’s for a valuation for the “Mundi.” Valette suggested to a colleague that they value the work at $125 million, but that person did not agree, according to court papers. The judge overseeing the trial, Jesse M. Furman, of Federal District Court, has determined that Valette subsequently asked the colleague to change the valuation to 100 million euros, or roughly $114 million.

Bouvier has repeatedly denied wrongdoing, and late last year he and Rybolovlev settled years of legal disputes with a confidential settlement in Geneva.

The trial has drawn significant interest, in part because of the anticipated testimony of a Russian oligarch, and in part because it is providing a glimpse into the opaque world of international art sales.

Sazonov testified on Tuesday about contracts for the first four sales arranged by Bouvier, which listed the sellers as companies in places like the British Virgin Islands and Hong Kong. Though those companies were affiliated with Bouvier, Sazonov said he was not aware of that at the time of the purchases, believing instead that the works were being sold by third parties. He added that formal contracts were eventually dispensed with altogether after Bouvier said they slowed his efforts to arrange deals.

On Wednesday, Shudofsky, the lawyer for Sotheby’s, returned to that testimony, asking Sazonov whether one written agreement for the sale of a Picasso, which listed Bouvier as a representative of the seller, had “raised any alarm bells.” Sazonov said it had not.

Later, Shudofsky pressed Sazonov about the decision to forgo contracts after the first four sales and instead accept invoices presented by Bouvier for purported art transactions. She also asked Sazonov whether any effort had been made to verify that the amounts paid had gone to actual third-party sellers.

Sazonov repeated several times that he had not realized at the time of the sales that Bouvier himself owned the artworks, suggesting that explained why he had not done more to challenge them. But he gave a more direct answer when Shudofsky asked him whether he regretted not asking for documentation of the transactions.

“I regret it, yes,” Sazonov replied.

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top