The end has come! Manhattan art dealer, Ezra Chowaiki, pleaded guilty to fraud charges and is facing up to 20 years in prison … though it seems that prosecutors will recommend a term of 4 to 5 years. He also agreed to forfeit $16 million and 25 works of art obtained during a scheme where he would convince unexpected collectors and dealers to lend money and/or artworks for a profit but never paid up. Another sad case of greed in the art world.
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In Volume 204 of our Comments on the Art Market, we briefly covered the charges brought against art dealer, Ezra Chowaiki. Since then, more information has come to light regarding the now bankrupt art gallery and its crooked dealer.
The court documents regarding the company’s bankruptcy claim reveal it has less than $300,000 in assists and almost $12 million in claims by victims who were defrauded.
Here are some of Chowaiki’s victims
A Cayman Island company, that is managed by a modern-art dealer, alleges that it was cheated out of $900,000. The deal was that he would purchase a 50% stake in a sculpture which Chowaiki would flip for a quick profit of over $100,000 to the victim. Chowaiki claimed a buyer was already lined up and willing to pay $2.15 million. However, once the money was wired, the victim learned that the work was not being sold by Chowaiki but actually up for auction in London.
Sotheby’s had hired the gallery as an agent to purchase “Titine Trovato in Dress and Hat” by Henri Matisse for $12 million. Sotheby’s then had plans to resell the work for $15-$20 million. Before the deal went through, the gallery sold the work to another buyer for $4.75 million. Sotheby’s is seeking damages for the loss.
Carpenter Fine Violins and Collectibles LLC., claims they acquired a 50% stake in Kandinsky’s “Schichtenweise” for $312,500. What is interesting is that this is the same amount of money “Victim-2” in the lawsuit claims Chowaiki stole; however, there is no information yet that connects these two cases.