The Art of the Con: The Most Notorious Fakes, Frauds, and Forgeries in the Art World (8 page)

One such scheme involved the art of the well-known American artist Stuart Davis, the Philadelphia-born early American Modernist whose paintings ranged from political pieces to street scenes and cafes. Davis was something of a prodigy, leaving high school to study at the Robert Henri School of Art in New York. At just 19 years of age, five of his works were exhibited at the 1913 Armory Show. His most famous work was perhaps his abstract
Egg Beater
series (1927), one piece of which sold for $254,000 at Christie’s in 2008.
22
While Davis also taught at Yale and at New York’s New School for Social Research, he remained a lifelong artist.
23
When he died in 1964, Davis left hundreds of works in his estate, the entirety of which he entrusted to his only child, Earl.

Earl, who devoted much of his life to his father’s art, was a friend of Salander’s, and the gallery owner convinced him that he could promote and sell the collection for him.
24
According to Earl, he agreed to entrust his friend with his father’s works, but he didn’t want all of the works to be sold, as they held a great sentimental value to him. Instead, Earl wanted to keep some of his late father’s works in his own private collection, and therefore directed Salander to notify him prior to putting any of them up for sale. He insisted on having a say not only in which pieces could be sold, but also at which price
they should be offered. He and Salander entered into an agreement in which the gallery would take a 20 percent commission on the sales of paintings up to $1 million. For sales over $1 million, the commission would be 10 percent. A similar agreement existed for Stuart Davis’s works on paper, with Salander earning a commission of 30 percent of sales up $20,000 and 20 percent of sales in excess of that figure.

In early 2005, Earl Davis requested that Salander prepare for him a full inventory of his father’s works. Several weeks passed before Salander provided his friend with a response, stating that he had personally verified the location of all of the Davis works and that all was in order. Months later, Earl received the inventory he requested. Nevertheless, Earl instructed Salander to stop selling any of his father’s works and to collect any pieces that were off-site so that they could be returned to him. Despite Earl’s concerns over the collection, Salander convinced him to sell one painting,
Punchcard Flutter,
for $2,250,000 and 12 other works for $650,000 in two separate sales. Earl recalls Salander telling him the buyers would be paying “cash on the table.”
25

It was to be a profitable sale for the works. But it would also prove too good to be true. First, Salander told Earl that
Punchcard Flutter
was sold for $2,125,000—$125,000 less than agreed upon. Then he told Earl that although the paintings had been released to the buyers, no payment had been received. In the end, Earl never received payment for the works. Eventually, he learned that 96 of his father’s works had been sold without Salander informing him, and that other pieces may have been “lost.”

It was a devastating blow for Earl Davis, who considered Salander a friend and confidant whom he truly loved. But Salander’s corrupt dealing with his friend was hardly his only indiscretion. Instead, it was just one anecdote in a massive Ponzi scheme involving paintings that would leave the jaws of art power brokers agape, not
only for its scope but for Salander’s willingness to victimize those who considered him a close, trusted friend.

Like Earl Davis, John and Neelon Crawford were the children of a famous artist, the painter and photographer Ralston Crawford. Crawford’s work was so respected by Salander that his gallery hosted an exhibition of his paintings in 2001 called
Ralston Crawford: A Retrospective.
The show’s catalog described Crawford as a “major American artist,” and the show exhibited his range, including not just his Abstract pictures, but some of his Precisionist works as well, including
Overseas Highway
(1939), which was based on the road leading from Key West, Florida, to the mainland. In 2007, Crawford’s sons also asked for an inventory of their father’s works, which had been entrusted to Salander. Unhappy with a lack of response from the art dealer, the men took more immediate action than had Earl Davis. John Crawford, himself an artist, jumped into his old Dodge pickup truck and drove it into the city. He walked into Salander-O’Reilly Gallery and took all of his father’s paintings he could find, packed them into the truck, and left. Meanwhile, his brother Neelon was also being ignored by Salander. Made aware that some of his father’s works were about to be sold, Neelon called the New York Police Department. He was directed to Detective Mark Fishstein, who, as part of his work on the Major Case Squad, serves as the NYPD’s top art cop. Fishstein is one of only a handful of city police officers in the United States with expertise in art theft, forgery, and fraud, and he made a short phone call to Salander in which he minced no words. Salander, apparently aware of Fishstein’s skill as an investigator, sent off the paintings to Neelon Crawford by the end of the week.
26

Salander didn’t limit his fraud to just pilfering from artists’ estates that had been entrusted to him by selling works without notifying or properly compensating his clients. He also preyed on collectors who
had come to consider him more than just a kindred spirit; for some, he was like part of the family.

In 2004, Dr. Alexander Pearlman passed away at the age of 91. A lifelong lover of art, he would visit galleries in Manhattan weekly with his daughters and take in the work of a wide array of artists. After frequent trips to Salander’s galleries, Pearlman, a physician from Queens, formed such a close bond with Salander that the two would regularly embrace upon meeting. The sometimes gruff Salander attended Pearlman’s funeral and cried over the loss of his friend.

Throughout their lives, the doctor’s daughters were protective of the art collection their father had assembled. It had become so valuable that his daughter Dr. Ellyn Shander remembers being instructed to tell her friends that the paintings were the work of her father in order to keep secret the fact that the artworks—including paintings by Modigliani, Manet, Cézanne, and Picasso—were worth about $2 million. As Pearlman approached the end of his life, he and his daughters discussed the future of his collection. His plan was clear and sensible: the paintings would be entrusted to his close friend Larry Salander for safekeeping.

After the funeral, Salander saw to it that each and every painting was properly inventoried, crated, and shipped to his establishment. Shander’s mind was at ease; that is, until she heard word in 2007 of problems at Salander-O’Reilly Galleries. She made the trip into the city to see Salander in person, and instead of being greeted by the caring friend she had come to know, she was met with a refusal to see her. She was escorted from the gallery by a security guard. She would later learn that much of the precious collection had been sold, and the works that had not became embroiled in legal proceedings.
27

Not even his celebrity friends were safe from Salander’s scams. Robert DeNiro had entrusted Salander with his late father’s paintings, with an agreement on a 50–50 split on any sales. Salander had
hosted exhibitions of Robert DeNiro Sr.’s works and the painter had chosen Salander as his dealer. The younger DeNiro would recall that Salander gave him “the impression he liked my father’s art, he was enthusiastic.”
28
While he may have liked it, Salander and his associate Leigh Morse sold $77,000 of it to San Francisco’s Hackett-Freedman Gallery in 2007 without sharing the proceeds with DeNiro as agreed. Morse, a dealer in Salander’s employ, was found to have wired money from the sale into her own personal bank account. Ultimately, DeNiro was able to retrieve the paintings at some expense after complex legal wrangling in U.S. Bankruptcy Court.
29
Morse was convicted of scheming to defraud in April 2011.
30

When it came to John McEnroe, Salander had an entirely different scam at work. This one involved selling one piece of art to multiple buyers. In 2004, the dealer convinced his good friend McEnroe to invest $2 million to buy half the interest in two paintings,
Pirates I
and
Pirates II,
by the Armenian American Abstract Expressionist artist Arshile Gorky. Salander told McEnroe that he would then flip the paintings and split the proceeds with the tennis great. But Salander only followed through on part of that plan. First, he sold the same half-interest in the paintings that he sold to McEnroe to another investor, a banker named Morton Bender. And then Salander boldly took the fraud a step further, selling
Pirates II
to yet another buyer and pocketing the $2.5 million proceeds. Manhattan district attorney Robert Morgenthau put it well when he summed up the scheme: “Why sell it once when you can sell it three times?”
31
Ironically, Salander had once been quoted as saying that “art is the human attempt to make one plus one equal more than two.”
32
Clearly, he had taken his own philosophy too literally.

While it appears that Salander’s frauds were motivated at least in part by the debts he accumulated while trying to become the father
of Renaissance art in the gallery world, he also fleeced the group that was formed to finance his purchases of that dream collection. Renaissance Art Investors was one of the biggest investors in Salander-O’Reilly Galleries and paid out $42 million for about 328 works of art from the Renaissance. RAI then consigned the works back to Salander to be marketed and sold. Yet RAI soon learned that Salander had misrepresented nearly all aspects of the investment, including the cost and source of the artwork. Salander told the investors he was buying the works from private dealers and estates primarily in Europe, when in fact many of the works were obtained from public auction houses in Europe and the United States. He also failed to report or turn over millions in proceeds from the RAI artworks. And finally, in order to cover his fraud, Salander provided RAI with forged and falsified documents ranging from invoices to inventories.
33

News of Salander’s scams spread quickly as more of his clients became aware that their artistic assets might be in jeopardy. Nevertheless, he remained defiant. When Maurice Katz learned that Salander had sold one of his paintings for $125,000 and didn’t pay Katz as agreed, Katz contacted the
Maine Antique Digest,
a major industry journal read by a large number of important collectors. He also spread the word that he had been cheated by the art dealer. Salander contacted Katz directly by e-mail and was apoplectic. “[You] have referred to me as a ‘crook’ among other things in conversation with a senior officer at my bank. This person and others will testify to your slanderous remarks and your balance due in your Maurer of $15,000 will seem like a pittance to the damages that that will have been caused to my business and for which I will ask for damages as well as the amount of loss actually incurred as a result of your out of bounds, unfounded and outrageous remarks . . . You have made it more difficult to put food in the stomachs of my children and I am extremely angry about it.” Ever portraying himself as the common
man, he added, “If you were enough of a person it would be much more rewarding for me and less expensive for you if we settled this matter the way men did in the old days (although it would be much more painful).”
34

When he became aware of the scheme perpetrated by Salander, RAI’s head, Donald Schupak, was a force to be reckoned with—and he was not one to be bullied. In 2007, with Salander’s dream Caravaggio exhibition on the horizon and a steady stream of stories about trouble at Salander-O’Reilly Galleries in the media, Schupak kicked into action. Working to stop the exhibition from happening, he and his attorney filed a motion in the New York State Supreme Court to limit Salander’s control. He even sent a private security firm to videotape all activity at the gallery and to search people as they left.
35

With lawsuits mounting, negative press attention snowballing, and doubts about Salander’s actions and judgment at their high point, Clovis Whitfield, the man who had Caravaggio’s
Apollo the Lute Player
—the cornerstone of Salander’s plans—was pushed to the brink. In a scene out of a Hollywood movie, Whitfield went to Salander-O’Reilly Gallery on the afternoon of the Caravaggio exhibition and informed Salander that he was pulling his prized painting from the gallery. Salander’s exhibition—and his dreams—were dashed.

All of this activity caught
the watchful eye of district attorney Robert Morgenthau’s office, and on March 26, 2009, he announced the arrest of Larry Salander and a 100-count indictment for stealing $88 million from a bank, art owners, and investors—many of whom were friends and longtime associates—from 1994 through 2007. In all, the district attorney’s office stated that Salander had defrauded 26 victims, stealing from them essentially in two ways: first, he sold artwork he didn’t own and kept the proceeds; and second, he lured
clients to invest in fraudulent opportunities. It was discovered that in one case he had sold half interest in one painting to seven people. And through the court battles and prosecution that would ensue, the enormous debts that Salander had accumulated become public. They included a $15 million mortgage on his Manhattan brownstone after racking up nearly $500,000 in costs for a series of unpaid home renovations; a $1.2 million personal loan; $1.7 million in back rent due on his original gallery (which he was forced to close not long after opening the palatial gallery on East 71st Street); and nearly $55 million due for paintings and investments, including the Stuart Davis and RAI paintings.
36

From a criminal prosecution perspective, the D.A.’s office had a mountain of evidence against Salander, and he, like so many scammers, knew he faced an opponent he could not beat. In 2010, with new district attorney Cyrus Vance in office, Salander pleaded guilty to stealing over $120 million from investors and art owners. Photos of Salander were splashed across newspapers and the internet, depicting a ruffled, beaten man. In his long statement to the court, Salander stated, “I’ve lost my life, my business and my reputation.” He sobbed as he apologized to his victims and his family and added, “I’m utterly and completely disgraced.”
37
The court, however, was in no mood for his contrition. Judge Michael Obus hit Salander with the maximum sentence allowable under his plea deal: 18 years in jail, with the opportunity for parole after six served. But that wasn’t all Salander faced: he is also responsible for $114.9 million in restitution, and was embroiled in dozens of civil lawsuits as well as complex bankruptcy proceedings. Summing up the Salander affair, Manhattan assistant district attorney Kenn Kern said, “Lawrence Salander is a pathologically self-absorbed con man who betrays friends, investors, heirs and living artists.” He added that Salander was engaged in “a Ponzi scheme that would make Bernie Madoff proud.”
38