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Art advisor accused of running a Ponzi scheme

A well-known New York based art advisor, Lisa Schiff, has had a complaint filed against her by two former clients and friends, accusing her of owing them each $900,000 and of running a Ponzi scheme.

Art collector Candace Carmel Barasch and Richard Grossman filed the complaint in New York State Supreme Court on 11 May. They list breach of contract, conversion, fraud, breach of fiduciary duty, and conspiracy in their list of causes of action. The complaint alleges that despite telling Barasch and Grossman that she does not have the money she owes them, Schiff has been living a lavish lifestyle in New York, including a $25,000 a month serviced apartment, extravagant international holidays, and much more. Schiff, who has previously stated that “my main job is to make the art world transparent, to help empower collectors”, was formerly friends with Barasch and Grossman, with Barasch telling the New York Times in 2019 that Schiff was her “partner in crime”.

The issue at the centre of this complaint revolves around a painting by Adrian Ghenie, a much sought-after contemporary artist from Romania. Ghenie, who is represented by Pace Gallery, creates evocative paintings which subvert “historical and artistic narratives”. Pace Gallery writes that his “recent work is driven by historical conflict between the irrational and rational, particularly in key ideas or moments that have incited social tumult”. His paintings, which are both figurative and abstract, are reminiscent of Francis Bacon. It has been said that in 2019, Schiff informed her clients, Barasch and Grossman, that a painting by Ghenie, Uncle 3 (2019) was available for purchase. The work had just been exhibited at the State Hermitage Museum in St. Petersburg, Russia. The compliant states that Barasch, Grossman, and Grossman’s spouse purchased it, with Barasch acquiring a 50% stake and Grossman and his partner receiving 25% each. In 2022, the owners decided to sell the painting, and agreed via oral communication with Schiff that she would receive a 10% commission. The painting was sold at Sotheby’s Hong Kong for $2.5 million, meaning that Schiff would receive $250,000.

In January 2023, it is said that Schiff sent the first instalment to her clients which amounted to $225,000 each. At this stage, she took her commission. She assured her clients that by 26 March, they would receive the rest of the money. But before that date, according to the complaint, Schiff “requested an additional thirty days to make the payment, asserting the delay was an accommodation to the purchasers in Hong Kong, but assuring Plaintiffs that the purchasers were not backing out of the sale, and guaranteeing that the $1.8 million payment would be made.” The money never came and finally in early May “Schiff conceded to Plaintiffs that the money owed to them from the sale of the Ghenie painting was gone”. According to the complaint, Schiff has been using client’s money to fund her lifestyle, indicating she was involved in a Ponzi scheme.

Wendy Lindstrom, Barasch’s and Grossman’s lawyer, told ARTnews that “it’s a sad day in the art world when a trusted advisor who professed transparency and integrity is discovered to have been stealing from her long-standing friends and clients.” Barasch and Grossman are asking for over $2 million in damages and for Schiff to return her $250,000 commission.

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