A lawsuit filed yesterday, May 11 accuses the New York art advisor Lisa Schiff of embezzlement, with three of her clients alleging that the consultant and her company Schiff Fine Arts (SFA) failed to fully compensate them for the $2.5M sale of an artwork. The plaintiffs, Richard Grossman and real-estate heiress Candace Barasch, claim that Schiff had guaranteed to pay out their profits from the joint sale of an Adrian Ghenie painting in installments earlier this year, but failed to hold up her end of the agreement after requesting an extension. Barasch, Grossman, and his spouse are seeking over $2M in damages after Schiff admitted she didn’t have the money, as first reported by the Daily Beast.
Barasch, Grossman, and Grossman’s unnamed spouse had joint ownership over Adrian Ghenie’s 2019 painting “The Uncle 3,” a transaction that was orchestrated by Schiff in 2021. The three agreed to split ownership of the painting, with Barasch acquiring a 50% share and Grossman and his spouse holding 25% each. According to the lawsuit, Schiff never had the Ghenie painting delivered to either Barasch or Grossman, but held it in a fine arts storage unit in Delaware while charging the shareholders for shipping and packing supplies.
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In November 2022, Schiff brokered the resale of the painting on their behalf through Sotheby’s Hong Kong for a 10% commission, and the work sold privately for $2.5M sometime between December and January. Things seemed to be going as planned, and Schiff wired $225,000 each to Barasch and Grossman in mid-January before taking her agreed-upon commission of $250,000. The plaintiffs’ attorneys confirmed with Sotheby’s that the painting had been sold and that Schiff had promised to disburse the remaining $1.8M in sales profits down the middle to Barasch and Grossman on March 26.
Schiff has not yet responded to Hyperallergic‘s requests for comment.
The lawsuit alleges that Schiff had requested a 30-day extension from the original payout date, citing the need to accommodate an alleged delay from the Hong Kong buyers. Grossman’s spouse and Barasch had known Schiff for practically 20 years and independently outlined their closeness to her as both a business partner and friend, giving them no reason to feel as if anything had gone awry with the sale. In the lawsuit, Grossman and his spouse even called themselves “adjunct parents” to Schiff’s son, having attended his related school functions and religious ceremonies.
When April 26 was set to turn the corner, Schiff asked Barasch and Grossman for another 14 days, again citing the Hong Kong buyers but maintaining confidence that they weren’t backing out of the purchase. Grossman began to worry, as he and his spouse intended to use a portion of their expected $900K profits to move his in-laws into an assisted living facility, but Schiff said that she was “working on it” in early May and sent them extensive decks for potential acquisitions at the TEFAF art fair.
It was only after an in-person confrontation last week, May 8, that Schiff allegedly told Grossman’s spouse that the money wasn’t there and that they should contact her attorney. According to the lawsuit, Schiff later doubled down over text, apologizing and saying, “It’s just complicated.”
The lawsuit claims the Ghenie incident is “part of a much larger Ponzi scheme” in which Schiff allegedly takes money from one client to pay another in order to fund her “lavish lifestyle.” Barasch recounted that Schiff told her she paid $25,o00 a month for her apartment, her son’s private school tuition was $60,000 a year, and her other domestic and international residences and office spaces cost tens of thousands of dollars per month. Barasch also recounted how Schiff would spend tens of thousands of dollars on first-class travel, concierge and limousine services, and couture fashion and jewelry during joint trips to art events.
Believing that Schiff dissolved the artwork sale profits to fund her lifestyle, Barasch, Grossman, and his spouse are now seeking around $2.05M in damages plus interest, the disgorgement of Schiff’s $250K commission, legal fee coverage, and any further court-appointed relief for Schiff’s breach of contract. Hyperallergic has contacted Grossman and Barasch’s attorney and will update this article with any additional information.
Source: Hyperallergic.com