Manhattan art consultant Lisa Schiff, who was accused of embezzling millions from her clients in a multi-year scheme, pleaded guilty yesterday, October 17, in a New York district court to one count of wire fraud.
Last May, Schiff was hit with two costly lawsuits in which clients of her consulting firm Schiff Fine Art (SFA) accused her of siphoning profits from the sale of artworks and payments they made to purchase works of art from galleries. The first lawsuit was initially filed by real estate heiress Candace Barasch, Richard Grossman and his wife, who alleged that Schiff failed to fully compensate them for the sale of an Adrian Ghenie painting worth $2.5 million. In January, Schiff filed for Chapter 7 bankruptcy for about $7 million debts of SFA And himself.
The disgraced art consultant has now admitted to defrauding clients of a total of around $6.5 million based on the purchase and sale of 55 works of art, according to yesterday’s release. announcement from the U.S. Attorney’s Office, which noted that she “defrauded at least twelve clients, one artist, another artist’s estate, and one gallery.”
“For years, Lisa Schiff betrayed the trust of her art consulting clients by lying to them and diverting millions of dollars that her clients had entrusted to her,” United States Attorney Damian Williams said in a statement, adding that she “recovered the stolen money used to finance a lavish lifestyle.” Under the terms of her plea, Schiff agreed to “forfeit approximately $6.4 million.” She faces a prison sentence of up to 20 years. Her sentencing is scheduled for January 17.
Court documents filed last August showed that in addition to the two lawsuits, approximately 40 entities, consisting of former friends, collectors, artists and estates, galleries and brokerage firms, had filed similar claims against Schiff. Plaintiffs included multidisciplinary artist Seffa Klein, Institute of Contemporary Art Boston trustees Brian and Karen Conway, Sotheby’s Private Sales, Stephen Friedman Gallery and Frestonian Gallery. Some of these claims remain unresolved. Next month works in possession of SFA including art by Damien Hirst, Judy Chicago, Dennis Hopper and Richard Prince will go to auction at Phillips in New York.
“We are challenging works of art that the curators believe should be sold,” Schiff’s attorney Randy Zelin said. Hyperallergicadding that they are currently in the process of determining which works have been sold on consignment and which have not. He explained that Schiff tried unsuccessfully last May Assignment for the benefit of creditors — an alternative to bankruptcy proceedings in which a third party is given the responsibility to liquidate the assets and distribute them to creditors.
“It was a disaster, so in January SFA involuntarily filed for bankruptcy, and Lisa filed for bankruptcy,” Zelin said.
“We are doing our best to advocate and collaborate and assist the administrators, while at the same time, if necessary, assist the people who own the works of art,” he added.
In addition to the debts owed to customers, Schiff also owed more than $1 million to the Internal Revenue Service, just over $400,000 to the New York State Internal Revenue Service and more than $160,000 to the New York City Department of Finance, according to the bankruptcy filings.
“The goal for us between now and January 17 is to be ready to present Lisa as she is, as she was and as she should be, and show the judge more than accusations… and just get to know her as being a human being,” Zelin said.
