High-end art dealer Inigo Philbrick has been sentenced to seven years in prison after pleading guilty to an $86m (R1.4bn) fraud.
Philbrick, who specialised in postwar and contemporary art and had galleries in London and Miami, ran a “Ponzi-like scheme” in which he used money from some customers to buy artworks, pay off others and bankroll a lavish lifestyle, federal prosecutors said. When it all began to fall apart in 2019, he went on the lam to escape the claims of his clients, ending up in the South Pacific island nation of Vanuatu, where he was taken into custody by US marshals the following year.
In a statement he read to the judge on Monday in federal court in Manhattan, Philbrick, 35, apologised to his victims and called his conduct “outrageous and inexcusable”.
“Why did you do it?” US district judge Sidney Stein asked him point-blank.
“Vanity and greed,” Philbrick responded. “I tried to find a way to live a life that wasn’t true.”
The defence had asked Stein for leniency, citing information Philbrick provided about his fraud and other art market scams after his arrest. They also pointed to harsh conditions he endured at the Metropolitan Detention Centre, a federal jail in Brooklyn, during the Covid-19 pandemic.
We’re not here to give him a medal. We’re here because he committed a massive fraud.
— Defence attorney Jeffrey Lichtman
Philbrick said there were frequent lockdowns, making visits from family and communications with his lawyers difficult, and that inmates were fed only lunch meats and peanut butter sandwiches for weeks at a time. His fiancée gave birth to one of his daughters while he was behind bars.
Still, in the face of sceptical questions from Stein, his lawyer conceded that the crime was serious.
“We’re not here to give him a medal,” defence attorney Jeffrey Lichtman told the judge. “We’re here because he committed a massive fraud.”
Philbrick burst on the art scene as a brash young dealer, bidding millions for works by Jean-Michel Basquiat and Yayoi Kusama, and then vanished in late 2019 amid a wave of lawsuits by collectors, including the billionaire Reuben brothers. He sold more than 100% ownership in artworks to multiple people and entities and used works as collateral on loans without the knowledge of co-owners, among other misrepresentations.
The judge said he would determine later how much Philbrick must pay in restitution to victims. The disgraced dealer has already agreed to forfeit two paintings, a 1998 untitled work by Christopher Wool and an untitled 2018 work by Wade Guyton.
But prosecutors said most of the money was gone and that victims had been forced to battle in court over 29 artworks the ownership of which is unclear.
Philbrick’s success “was built on brazen lies, including concealed ownership interests, fake documents, and even an invented art collector”, Williams said.
In imposing a sentence below federal guidelines, which called for roughly 10 to 12 years, Stein pointed to Philbrick’s efforts to cooperate with investigators and to conditions at the jail.
The government had asked that Philbrick be sentenced to “a significant term of imprisonment” below the guidelines. He has already spent 22 months in custody since his arrest, which will count towards his term.
The statutory maximum is 20 years.
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— Bloomberg
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