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More Hot Water For Sotheby’s

November 8, 2020

front entrance to sotheby'sLast week, the New York Attorney General filed a lawsuit against Sotheby’s alleging that the auction room violated the New York False Claims Act by helping a major client (Porsal Equities, Ltd.) create, and then use, false resale certificates to avoid paying sales tax on $27M worth of art.

Back in 2018, Porsal Equities, Ltd. reached a $10.75M settlement with the OAG and admitted that they improperly used resale certificates from 2010 through 2015.  According to OAG’s 2018 press release, Porsal Equities Ltd., a company based in the British Virgin Islands, certified it was exempt from paying sales tax on the basis that the art was purchased for resale. In reality, Porsal Equities purchased the artwork for personal use, including for display at New York City apartments belonging to the company’s sole director, Isaac Sultan. Porsal Equities also failed to pay use tax on artwork purchased outside New York and shipped into New York for display at the same apartments.

We will bring you more on this case as it develops.

Source: Attorney General James Sues Sotheby’s for Defrauding New York Taxpayers Out of Millions

Source: New York Accuses Sotheby’s of Aiding Art Collector in Evading Sales Tax

Source: Sotheby’s Sued by New York for Helping Client Avoid Taxes

Source: New York sues Sotheby’s for helping important client escape sales taxes on artwork