A Russian billionaire, a top art dealer, and an ugly battle over the price of multimillion-dollar masterpieces
A European art scandal comes to the U.S. Fraud? Or “a commercial dispute over paintings”?
As a restorer carefully removed overpainting and yellowed varnish on the painting of Christ, a lost masterpiece was revealed: the Mona Lisa mouth, the subtle brushwork, the gossamer glaze. The world learned in 2011 that the painting was the work of Leonardo da Vinci. Salvator Mundi later sold for $127.5 million, in a transaction that’s become part of one of the biggest art scandals in decades.
The dealer Yves Bouvier, one of the art world’s consummate insiders, has for months been battling with the Leonardo’s buyer, Dmitry Rybolovlev. The Russian billionaire spent, by his own count, more than $2 billion on almost 40 works purchased through Bouvier over
the past decade. Rybolovlev has alleged, in a complaint to authorities in Monaco, that Bouvier not only collected a fee for his art sales but also misrepresented the price at which sellers were willing to give up their works—pocketing, in some cases, what amounted to an undisclosed markup of tens of millions of dollars.
Now, U.S. federal prosecutors, following the lead of European authorities, have opened an inquiry into Bouvier, according to people familiar with the matter. Bouvier, who operates out of the Geneva Freeport, a vast, tax-free complex of warehouses for art and valuables in the Swiss city, has said that he’s done nothing wrong and that he charges what the market will bear.
One work in question is Modigliani’s
Reclining Nude With Blue Cushion,
which Rybolovlev bought for $118 million from hedge fund manager Steven Cohen. Rybolovlev later discovered, during a lunch in St. Barts with one of Cohen’s dealers, that Cohen sold the work for $93.5 million.
The probe by the U.S. Department of Justice marks the first time federal authorities have gotten involved in a scandal that’s shaken Europe’s notoriously private ecosystem of art dealers, middlemen, and collectors. U.S. prosecutors are examining various art deals Bouvier struck, focusing on the extent to which he may have misrepresented how much he’d marked up artworks, people familiar with the matter say.
“We have not been contacted by the U.S. authorities and are unaware whether—or how—any such inquiry has been initiated,” says Daniel Levy, an attorney for Bouvier. “During the course of this commercial dispute over paintings, the other party has repeatedly attempted to use law enforcement to further his own private objectives.”
Levy pointed to Rybolovlev’s attempt in Singapore, where Bouvier is a resident, to freeze the dealer’s assets. An appeals court there denied Rybolovlev’s request, calling such an injunction “an abuse of the court’s process.” The court wrote that there may be a “good arguable case” that Bouvier acted dishonestly, but also that Rybolovlev and his representatives “received what they bargained for and at the price they were willing to pay.” It wasn’t clear, the court wrote, whether Bouvier had characterized himself to Rybolovlev as a broker, bound to look out for his client. A spokesman for Rybolovlev declined to comment, as did a U.S. Justice Department spokesman.
After Rybolovlev filed his complaint, Monaco police arrested Bouvier in February 2015 as he entered the lobby of Rybolovlev’s residence. He was released on bail. Bouvier denied the allegations that he’d misled Rybolovlev about the prices of works he was buying. In November a Monaco appeals court rejected Bouvier’s request to have criminal charges against him dropped.
According to the Monaco complaint, a Rybolovlev trust paid about $50 million more for the Leonardo than he alleges the seller received. However the dispute ends, Dianne Modestini, the restorer who helped bring the work to light, laments that it’s disappeared from public view, a common complaint when a work is acquired by a private collector. “When you own a painting such as this, you have a responsibility to hold it as part of the public trust,” she says.
The bottom line Federal prosecutors are taking an interest in a dispute over whether an art dealer profited by marking up prices.