Russian billionaire sues Sotheby’s for £292 million over alleged art fraud

Sotheby’s has vowed to ‘vigorously defend’ itself against a ‘desperate lawsuit’ filed in New York on Tuesday (2 October) by Russian billionaire, Dmitry Rybolovlev, who claims the auction house helped to defraud him over the sale of artworks worth millions.

Rybolovlev, the owner of football club AS Monaco who previously bought a US$95 million (£73 million) Florida home from Donald Trump, filed suit in the US district court in New York for US$380 million (£292 million). He alleges that Sotheby’smaterially assisted the largest art fraud in history” by helping Swiss shipping magnate, Geneva Freeport operator and backroom art dealer, Yves Bouvier, with selling masterpieces to him at over-inflated prices.

The case is the latest in a long running international legal battle between Bouvier, Geneva’s “Freeport King”, and Rybolovlev. Bouvier acted as a long-time art advisor to Rybolovlev and between 2003 and 2014 took a commission for arranging the sale of 38 paintings, including Leonardo da Vinci’s ‘Salvator Mundi’, to Rybolovlev for over US$2 billion (£1.5 billion).

According to Rybolovlev’s latest lawsuit, Sotheby’s was involved in 12 of the transactions which took place between Rybolovlev and Bouvier. The complaint alleges that Sotheby’s legitimised the transactions by omitting to share previous prices paid for the artworks with Bouvier and inflating their appraisals of the paintings’ values.

In one case, Bouvier was said to have purchased Amedeo Modigliani’s ‘Reclining Nude with a Blue Cushion’ for US$95 million (£73 million) and sold it on to Rybolovlev for over US$120 million (£93 million). A family confidant of Bouvier’s is alleged to have pocketed a US$5 million (£4 million) kickback from the sale.

Sotheby’s denies it knew Bouvier was working as an agent for Rybolovlev. The auction house also argues that the case should be litigated in Swiss courts where it joined with Bouvier to pre-emptively sue Rybolovlev in 2017 after the Russian billionaire threatened action in the UK.

Lawyers for Bouvier have accused Rybolovlev of waging a “global terror campaign” of litigation against their client. They argue that Bouvier was never legally bound to Rybolovlev as an agent with fiduciary duties and was therefore free to sell the artworks to him at whatever price Rybolovlev agreed to pay.

Sotheby’s plans to ask the judge in New York to dismiss the suit.

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