Former art dealer Inigo Philbrick, who presided over a “Ponzi-like” scheme that defrauded his clients of $86 million to support a lifestyle beyond his means, was sentenced to seven years in prison on Monday, May 23 in a Manhattan federal court. The 34-year-old dealt in post-war and contemporary art, misrepresenting the ownership of and fraudulently trading in works including Jean-Michel Basquiat’s “Humidity” (1982), a painting of a photograph of Pablo Picasso by Rudolf Stingel, and Yayoi Kusama’s installation “All the Eternal Love I Have for the Pumpkins” (2016).
The sentence is lighter than the 10-to-12-year standard recommended by federal guidelines, which the judge attributed to Philbrick’s cooperation with investigators and subpar conditions in jail. Moreover, Philbrick’s attorney Jeffrey Lichtman told Hyperallergic that he believes the dealer “will be released in about 30 months.” That’s because Philbrick has already served some 23 months of the 84-month sentence; has received a recommendation for the Residential Drug Abuse Program, which will account for 12 months; will spend the final six months in either home confinement or a halfway house; and will likely have 15% of the sentence subtracted for good behavior.
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“I always want to do better in a sentencing but considering the massive fraud amount here, I’m pleased,” Lichtman said in an email to Hyperallergic.
Philbrick, who opened galleries in London and Miami, collected funds from investors to purchase artworks and to pay off other clients — all while taking advantage of the notoriously murky art market to obfuscate the ownership stakes that his clients could claim and the prices of artworks. He secretly used artworks as collateral on loans without informing their co-owners and fabricated paperwork to maintain an illusion of legitimacy to his customers. Among Philbrick’s coterie of former supporters and friends were Jay Jopling, the founder of London’s White Cube gallery, and Artnet News columnist Kenny Schachter. In a 2020 article for Vulture, Schachter admitted to making “a good deal of money” through Philbrick’s deals — and significant losses.
“He took me — his friend! — for $1.75 million when we (or so he told me, anyway) bought a [Rudolf] Stingel copper cast together with another partner,” Schachter wrote.
In a statement that was read in court, Philbrick apologized to victims for his “outrageous and inexcusable” conduct. When questioned on his motives, he answered that he was driven by “vanity and greed.” While Philbrick’s dealings represent an egregious instance of blatantly unlawful behavior, they shed light on the sketchiness of practices that are increasingly par for the course in the art market, such as selling works to groups of several buyers under very hazy terms.
Before his clients caught onto his scheme in 2019, Philbrick was a fast-rising star in the art world. A child of art world insiders — his father was for a time the director of the Aldrich Contemporary Art Museum in Ridgefield, Connecticut, and his mother was an artist and educator — he opened a gallery and consultancy at the youthful age of 24 after completing a degree in Curatorial Studies at Goldsmiths College. As he made his way up in the industry, he regularly name-dropped his illustrious clientele in conversation and got around via private jet.
But beginning in 2016, Philbrick engaged in a pattern of willfully misrepresenting facts and selling over 100% ownership in artworks. “Unfortunately, his success was built on brazen lies, including concealed ownership interests, fake documents, and even an invented art collector,” Damian Williams, the United States attorney for the Southern District of New York, said in a statement.
In October, a lender formally alerted Philbrick that he was in default of an approximately $14 million loan. By late 2019, several lawsuits had been filed against him in the US and Britain, including one by the international financial services provider Fine Art Partners, which sought the return of pieces it had entrusted Philbrick to sell — including the Kusama — and the payment of $9 million that Philbrick had promised for the sale of the Stingel painting. In response, Philbrick fled to the Pacific island of Vanuatu, where he ignored an influx of emails, Instagram DMs, and phone calls. “When the house of cards fell apart, Philbrick fled for a remote island in the Pacific, leaving many of his victims without recourse,” Williams said.
In June 2020, the US Marshals arrested him and took him into custody.
Philbrick has agreed to forfeit his claim to two paintings, one by Christopher Wool — whose works’ values have plummeted in recent years — and another by Wade Guyton. In addition to his prison sentence, Judge Sidney H. Stein sentenced him to two years of supervised release and said that it would be later determined how much Philbrick would pay in restitution to his victims. Lichtman told Hyperallergic that Philbrick “will do what he can to help his victims in that and to make them whole upon his release.”
Still, those who were duped by Philbrick face a grim fate for their lost investments: Most of their money is irrecoverable, and many of them will have to duke out ownership of some 29 artworks in court.
“The defendant is responsible for one of the most significant frauds in the art market in history,” the prosecutors said in a sentencing statement. “He capitalized on his reputation as a talented young art dealer to convince investors and lenders into trusting him with their art and money.”