Museum to Pay $19M for Nazi-Looted Painting

(CN) - A 1912 painting looted by Nazis during World War II is returning to Austria after a 70-year battle to get it back, federal prosecutors said Tuesday. Vienna's Leopold Museum agreed to pay $19 million to the estate of the painting's Jewish owner, who fled the country in 1939.

The painting, "Portrait of Wally" by expressionist Egon Schiele, had been part of gallery owner Lea Bondi Jaray's private collection.

Her "non-Aryan" gallery was subject to Nazi confiscation, because Jews could not own businesses. On the eve of her 1939 departure to England, Jaray reluctantly sold the piece to a Nazi art collector.

She tried to get the painting back after World War II, but it had fallen into the hands of art collector Dr. Rudolph Leopold. Jaray fought for the painting until her death in 1969.

"Wally" was displayed in New York's Museum of Modern Art in 1997 as part of Leopold's collection and two years later was subject to a federal forfeiture action as an imported, stolen item.

U.S. District Judge Loretta Preska in Manhattan ruled that the painting belonged to Bondi, rejecting the museum's claim that Leopold did not know that the painting had been stolen.

On Tuesday, the Leopold Museum agreed to pay Jaray's estate $19 million, ending the decades-long dispute.

"More than 70 years after 'Portrait of Wally' was stolen, today's settlement marks another small step toward justice for victims of property crimes during WWII," U.S. Attorney Preet Bharara said in a statement. He said Jaray's fight for the painting "provides hope for others who lost precious property and art to Nazi theft."

Before returning to Austria, "Wally" will be on display for three weeks at New York's Museum of Jewish Heritage.

The settlement was reached as part of an investigation by Immigration and Customs Enforcement and the U.S. District Court's Asset Forfeiture Unit.

Attorneys Sharon Cohen Levin, Anna Arreola and Barbara Ward handled the forfeiture proceedings.

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