NEW YORK (AP) — Sotheby's defended itself in a trial Monday against accusations that it helped defraud a Russian oligarch of tens of millions of dollars, saying it knew nothing of wrongdoing by an art buyer who helped the billionaire buy Works by famous artists such as Amedeo Modigliani and Leonardo da Vinci.
Sotheby's lawyer Sara Shudofsky told a jury in opening statements in Manhattan federal court that billionaire Dmitry Rybolovlev was “trying to make an innocent party pay for what someone else did to him.”
Shudofsky said the fertilizer tycoon, a shrewd businessman who has run very successful companies, had “good reason to be angry with himself” after he spent hundreds of millions of dollars buying masterpieces of art without “taking the most basic steps to protect himself from a broker who has defrauded him.
“Sotheby's knew nothing about these lies,” the lawyer said. “Sotheby’s had no knowledge of, or involvement in, any wrongdoing.”
She spoke after Rybolovlev's lawyer Daniel Kornstein insisted that a London-based Sotheby's manager was part of a group of executives involved in an elaborate fraud.
“Sotheby’s made a lot of money by participating in the fraud,” Kornstein said. “Sotheby’s had a choice, but they chose greed.”
The trial is expected to provide insight into the evolution of high-risk transactions between art lovers around the world and their importance for the operations of auction houses, which rely heavily on their reputation to broker some of the world's richest investors.
Rybolovlev, 57, who bought a Palm Beach mansion from Donald Trump for about $95 million in 2008, is expected to testify. In 2016, as Trump prepared to become president, he called the deal “the closest thing I've ever had to Russia” when asked about his ties to the country.
In an order last March, Judge Jesse M. Furman urged attorneys to work toward an agreement to avoid a trial that would be “expensive, risky and potentially embarrassing for both sides.”
The case stems from $2 billion that Rybolovlev spent between 2002 and 2014 to acquire a world-class art collection through purchases from two of his companies, Accent Delight International Limited and Xitrans Finance Limited.
To handle the purchases for Rybolovlev's home in Geneva, Switzerland, he relied heavily on Yves Bouvier, an art broker who claimed he could save Rybolovlev money by handling art negotiations for a 2% commission, Kornstein said.
Bouvier soon became such a trusted friend of the billionaire that he attended small birthday parties for Rybolovlev and his daughter and accompanied him to soccer games, the lawyer said.
“Bouvier turned out to be a fraudster” who bought artworks at Sotheby's, sometimes nearly doubling the price before reselling the artworks to Rybolovlev, Kornstein said.
“If you're the buyer and you're operating in the dark, you have no way of finding out unless the auction house knows about it and can help you,” he said.
In total, Bouvier collected $164 million from his “secret markups” and another $6.4 million from collecting his 2% commission, Kornstein said.
The lawyer asked jurors to look at documents, including emails, that “did not lie” and would prove that auction house executives knew what was happening. He urged them to ignore what he called the “fairy tales” of Sotheby's witnesses.
A message sent to Bouvier's lawyer seeking comment on the allegations against him and a settlement reached between Bouvier and Rybolovlev in a Swiss court a few weeks ago was returned with the message that it had been forwarded to Bouvier's representative.
In total, Rybolovlev had accused Bouvier of defrauding him through the sale of 38 works of art, including Picasso's “Homme Assis au Verre” and Rodin's “Le Baiser,” “L'Éternel Printemps” and “Eve,” but the judge had him last The process resulted in many of the dozen or so works being purchased privately at Sotheby's for various legal reasons.
Among the four works at issue in the trial was de Vinci's “Salvator Mundi,” a depiction of Christ as “Savior of the World,” which Bouvier bought at Sotheby's for $83 million, then sold for over $127 million US dollars to Rybolovlev Kornstein said it was a “secret markup” of over US$44 million.
In 2017, Rybolovlev ensured that Christie's sold the painting for the historic value of $450 million, making it the most expensive painting ever sold at auction.
Other works of art that Kornstein said contained improper markings and are being addressed in the trial included a Modigliani sculpture and paintings by Gustav Klimt and Rene Magritte.
In 2018, Rybolovlev was included on a list published by the Trump administration of 114 Russian politicians and oligarchs allegedly linked to Russian President Vladimir Putin.
However, he was not on the list of Russian oligarchs sanctioned after Russia's attack on Ukraine, and Kornstein told the jury that his client had not lived in Russia for 30 years.