Art Dealer Pleads Guilty to Wire Fraud Charges in $86 Million Scam
He was a rising star as an art dealer, who investors relied on to help them find good investments in the opaque world of fine art. Unfortunately, for both the investors and himself, he instead used his charm and twisted brilliance to perpetrate a complex and nasty scheme to defraud them. Art Dealer Pleads Guilty
He had used the words “what goes around comes around” on many occasions in his life, to describe the foolish actions of others. Yet as of yesterday he stands convicted of wire fraud, facing a sentence of 20 years in prison.
How is it that so many fail to see in themselves what is so easy to see in others? As the King said to Anna, “It is a puzzlement!”
https://www.nytimes.com/2021/11/18/arts/inigo-philbrick-pleads-guilty-art-scam.html?smid=em-share
Art Dealer Pleads Guilty to Wire Fraud Charges in $86 Million Scam
Prosecutors said Inigo Philbrick, who admitted he duped investors who joined him in the purchase of blue-chip art, took advantage of the opacity of the art market.
For years Inigo Philbrick, a young art dealer with a gallery in the Mayfair district in London, was a brash fixture within the world of postwar and contemporary art.
Known for traveling on private jets, renting villas in Ibiza and wearing handmade Italian suits, he also was known to draw people into investing with him in paintings by blue-chip artists like Jean-Michel Basquiat, Rudolf Stingel and Christopher Wool.
On Thursday, Mr. Philbrick appeared in ankle chains in Federal District Court in Manhattan and pleaded guilty to wire fraud, acknowledging that he had duped people while conducting business as an art dealer in New York and other places.
“I knew that my actions were wrong and illegal,” he told Judge Sidney H. Stein, adding that he had been motivated by a desire for money.
As part of his plea Mr. Philbrick, 34, agreed to forfeit $86 million and all interest in a 1998 painting by Wool and a 2018 painting by Wade Guyton. He is scheduled to be sentenced in March and faces a sentence of up to 20 years in prison.
An American citizen who attended Goldsmiths, University of London, Mr. Philbrick was in his 20s when he opened a gallery and consultancy.
Mr. Philbrick specialized not in showing new works or guiding careers but in reselling, or “flipping,” a speculative form of art dealing in which investors buy ownership stakes in artworks and hope to profit when those items are sold.
The deceptions Mr. Philbrick was accused of perpetrating had their roots in the opacity of the resale market, where it can be difficult to verify how much works are bought and sold for. As a result, the value of shares in a piece of art is often based on little more than a dealer’s word.
“Inigo Philbrick was a serial swindler who took advantage of the lack of transparency in the art market to defraud art collectors, investors and lenders of more than $86 million to finance his art business and his lifestyle,” said Damian Williams, the U.S. attorney for the Southern District of New York.
From about 2016 to 2019, the complaint in Mr. Philbrick’s case said, he misled collectors and lenders and sometimes sold a total of more than 100 percent ownership in an artwork to multiple investors.
Prosecutors said he also furnished “fake and fraudulent sale and consignment contracts in order to artificially inflate the value of artworks and to conceal the discovery of his scheme.”
In 2016, for instance, Mr. Philbrick bought a 1982 Basquiat painting titled “Humidity,” paying $12.5 million in a private sale, prosecutors said. Mr. Philbrick later sold shares in the painting to two investors while presenting phony documents citing purchase prices of $18.4 million and $22 million, according to the complaint.
Mr. Philbrick was also accused of using the Basquiat painting as part of his collateral for millions of dollars in loans from Athena Art Finance Corp., an art lending business in Manhattan, without disclosing the ownership interests of other investors in the work.
Prosecutors described similar problems with an untitled 2010 painting by Wool and an untitled 2012 painting by Stingel that depicted Pablo Picasso. In the latter case, Mr. Philbrick was accused of selling to unwitting investors shares in the painting that totaled more than 100 percent.
Mr. Philbrick’s scheme began to unravel in 2019 as investors learned that he had provided fraudulent documents related to the Stingel and the Basquiat.
By November, investors had filed civil lawsuits in connection with Mr. Philbrick’s activities. His gallery in Miami was shuttered. It appeared that he had vanished.
Then, in June 2020, Mr. Philbrick was arrested by U.S. law enforcement agents on the Pacific island of Vanuatu and transported to Guam. Prosecutors said that flight records showed that he had left the United States just before word of the lawsuits began to spread.
Kirkus Reviews, the gold-standard for independent & accurate reviews, has this to say about
What Goes Around Comes Around:
A stable, positive, non preachy, objective voice makes the book stand apart from others in the genre. A successful guide that uses anecdotes to reveal powerful truths about life.
~ Kirkus Reviews
“I’ve read a number of books that focus on sharing a similar message, including “The Secret” by Rhonda Byrne, “The Answer” by John Assaraf & Murray Smith, “The Celestine Prophecy” by James Redfield, “Think and Grow Rich,” by Napoleon Hill, and I must say that I find Rob’s to be my favorite.” – Sheryl Woodhouse, founder of Livelihood Matters LLC
Art Dealer Pleads Guilty to Wire Fraud Charges in $86 Million Scam
Art Dealer Pleads Guilty to Wire Fraud Charges in $86 Million Scam
The fundamental Principle of life that explains everything in nature and the sciences is The Law of Cause & Effect. Change the Cause and the Effect changes accordingly. Likewise, all Effects can be traced to a Cause.
It is also the Principle that underlies the concepts of Karma and today’s way of expressing the same idea, namely “What Goes Around Comes Around.” It applies to individuals, groups of individuals, companies large and small, religions, regions, countries and even planets, including notably the earth.
The UN climate summit currently in session highlights an example applicable to the latter, as it relates to efforts by certain humans tout limits on the emission of Methane gas. Why should anyone care?
Perhaps because it is scientifically known that Methane traps more that 80 times the heat that the same amount of carbon dioxide does! Meaning that the enormous amount of methane released by oil and gas drilling is a big contributor to “global warming.” The question is do Nations of the world at large outlaw the release of methane by enacting laws and rules to restrict it…or not?
It is a clear case of “cause & effect” in action. What Goes Around, will like night follows day, Come Around. If the cause is not adjusted, the effect will be life changing in the worst way for future generations. Does anyone care? It remains to be seen.
Colombo Family Crime Boss and 12 Others Are Arrested, Prosecutors Say
An indictment unsealed on Tuesday accuses the organization of orchestrating a two-decade scheme to extort a labor union.
For two decades, the leadership of the Colombo crime family extorted a Queens labor union, federal prosecutors said — an effort that continued unabated even as members of the mob clan cycled through prison, the family’s notorious longtime boss died, and as federal law enforcement closed in.
Over time, what began as a Colombo captain’s shakedown of a union leader, complete with expletive-laced threats of violence, expanded into a cottage industry, prosecutors said, as the Colombo organization assumed control of contracting and union business, with side operations in phony construction certificates, marijuana trafficking and loan-sharking.
On Tuesday, 11 reputed members and associates of the Colombo crime family, including the mob clan’s entire leadership, were charged in a labor racketeering case brought by the U.S. attorney’s office in Brooklyn.
All but two of the men were arrested Tuesday morning across New York and New Jersey, prosecutors said. Another was surrendered to the authorities on Tuesday; another defendant, identified as the family consigliere, remained at large, prosecutors said.
The indictment accuses the Colombo family of orchestrating a two-decade scheme to extort an unnamed labor union that represented construction workers, using threats of violence to secure payments and arrange contracts that would benefit the crime family.
The charges are an ambitious effort by the U.S. attorney’s office in Brooklyn and the Federal Bureau of Investigation to take down one of the city’s five Mafia families. In addition to the union extortion scheme, which is the heart of the racketeering charge, the indictment charges several misdeeds often associated with the mob, including drug trafficking, money laundering, loan-sharking and falsifying federal labor safety paperwork.
Detention hearings for the defendants in Brooklyn federal court continued into the evening Tuesday, as they entered not-guilty pleas to the charges; prosecutors had asked the court to keep 10 of the defendants in custody.
“Everything we allege in this investigation proves history does indeed repeat itself,” Michael J. Driscoll, F.B.I. assistant director-in-charge, said in a statement. “The underbelly of the crime families in New York City is alive and well.”
Around 2001, prosecutors said, Vincent Ricciardo — a reported captain in the family, also known as “Vinny Unions” — began to demand a portion of a senior labor union official’s salary. When Mr. Ricciardo was convicted and imprisoned on federal racketeering charges in the mid-2000s, prosecutors said, his cousin continued to collect those payments.
Starting in late 2019, prosecutors said, the senior leadership of the Colombo family became directly involved in the shakedown, which extended to broader efforts to siphon money from the union: for example, manipulating the selection of union health fund vendors to contract with entities connected to the family, and diverting more than $10,000 each month from the fund to the family.
Andrew Russo, 87, who prosecutors describe as the family boss, is accused of taking part in those efforts, as well as a money-laundering scheme to send the proceeds of the union extortion through intermediaries to Colombo associates. He was among nine defendants charged with racketeering.
Mr. Russo appeared in court virtually from the hospital Tuesday; he is set to be detained upon his release, pending a future bail hearing.
The family’s infamous longtime boss, Carmine J. Persico, died in federal custody in North Carolina in March 2019.
Federal law enforcement learned of the extortion scheme about a year ago, prosecutors wrote in a court filing Tuesday; investigators gathered thousands of hours of wiretapped calls and conversations recorded by a confidential witness, wrote the prosecutors, who also described law-enforcement surveillance of meetings among the accused conspirators.
The authorities said they repeatedly captured Mr. Ricciardo and his associates threatening to kill the union official. “I’ll put him in the ground right in front of his wife and kids,” Mr. Ricciardo was recorded saying in June.
On another occasion cited by prosecutors in the memo seeking his detention, Mr. Ricciardo directed the union official to hire a consultant selected by the Colombo family, saying: “It’s my union and that’s it.” Prosecutors said his activities were overseen by a Colombo soldier and the consigliere who remains at large.
Much of the activity outlined in the indictment took place while the defendants were either in prison or on supervised release for prior federal mob-related convictions. Theodore Persico Jr., described as a family captain and soldier, was released from federal prison in 2020 and, despite a directive not to associate with members of organized crime, “directed much of the labor racketeering scheme,” prosecutors said.
Mr. Persico, 58, is set to inherit the role of boss after Mr. Russo, prosecutors wrote.
Several of the defendants were named in what prosecutors described as a fraudulent safety training scheme, in which they falsified state and federal paperwork that is required for construction workers to show they have completed safety training courses.
One of the defendants, John Ragano — whom prosecutors say is a soldier in the Bonanno crime family — is accused of setting up phony occupational safety training schools in New York, which prosecutors said were “mills” that provided fraudulent safety training certificates to hundreds of people.
In October 2020, prosecutors said, an undercover law enforcement officer visited one of the schools in Ozone Park, Queens, and received, from Mr. Ricciardo’s cousin, a blank test form and an answer sheet; weeks later, the agent returned to pick up his federal safety card and paid $500.
The purported schools were also used for meetings with members of La Cosa Nostra — the group of crime families commonly known as the Mafia — and to store illegal drugs and fireworks, according to the indictment.
Mr. Ragano wasn’t charged on the racketeering count, although prosecutors also sought his detention pending trial. In addition to the racketeering count, several defendants, including Mr. Ricciardo and his cousin, were charged with extortion, conspiracy, fraud and conspiracy to make false statements.
William K. Rashbaum contributed reporting.
Correction:
An earlier version of this article misstated the number of people identified in an indictment as members of the Colombo crime family. It is 11, not more than a dozen.