MANHATTAN (CN) – A federal judge sentenced prominent SoHo gallerist Mary Boone on Thursday to two and half years in prison for cooking the books on millions of personal expenses that she disguised as tax deductions.
Boone, 67, pleaded guilty last month in the Southern District of New York to two counts of subscribing to false and fraudulent federal income tax for falsely reporting that her Mary Boone Gallery had a loss of $52,521, when in actuality the gallery netted a profit of about $3.7 million that year.
While Boone’s attorney Robert Fink had asked that she be sentenced to home confinement and probation with up to 1,000 hours of community service, U.S. District Judge Alvin Hellerstein found that her tax crimes deserved a stronger sentence.
“A tax fraud of this magnitude like this and continual activity … doesn’t lend itself to probation and it doesn’t lend itself to time served,” Hellerstein said at the sentencing hearing today. “This is a serious offense. All must pay their taxes.”
“This is a crime that is deterrable,” Hellerstein added. “You can’t have people avoiding punishment after they are caught by doing good work.”
Fink had sought leniency for Boone on the basis of her mental health issues, including a suicide attempt and drug and alcohol abuse arising from a troubled and unstable childhood.
Federal prosecutors alleged that Boone had evaded paying federal income taxes on significant personal income by mischaracterizing her personal expenses as tax-deductible business expenses on the handwritten check registers that she provided to her accountant on a monthly basis.
According to the government’s sentencing memorandum, Boone used business funds to pay for more than $1 million in personal expenses, including $793,003 to remodel her Manhattan apartment, $120,856 for rent and expenses for a second Manhattan apartment, and $300,000 in personal credit card charges, including purchases from luxury designers Hermes and Louis Vuitton.
Assistant U.S. Attorney Olga Zverovich said at today’s sentencing hearing that in 2011, Boone’s federal return reported a tax liability of $335, instead of about $1.2 million in taxes; Boone paid zero in taxes the two prior years, Zverovich said.
Prosecutors also alleged that from 2009 through 2011, Boone cheated the New York government by failing to turn over the the hundreds of thousands of dollars in sales taxes she collected from customers who purchased works of art from her gallery.
Hellerstein’s 30-month sentence fell within the guideline range of 30 to 37 months to which the plea agreement stipulated.
For most of the 75-minute sentencing hearing, Boone sat slumped forward resting her head on her hands, which she mostly kept clasped together in a prayer gesture.
Boone spoke briefly at the hearing, begging Hellerstein in a slightly husky voice to be given a second chance and allowed to go back to work to repay her debts.
“I feel like a pariah,” Boone said. “I stand here saddened, humbled and heartbroken.”
Boone has been “totally ostracized from society,” Fink lamented at the sentencing hearing. He said she has been cut loose from Chase Bank, kicked out of the Century Club and forced to resign from the Art Dealers Association of America, which “was almost her lifeline.”
In addition to incarceration, Hellerstein ordered Boon to complete 180 hours of community service, with specific instructions that she help the New York City Department of Education with a visual arts and professional development program for high school teachers and mentoring program for underserved youths.
Hellerstein said the city expects Boone to begin her community service in June 2021.
Boone’s attorney asked that she serve her sentence at the Women’s Camp at the Danbury Federal Correctional Institute.
Hellerstein allowed Boone to surrender herself to law enforcement after she closes up her gallery.
“The gallery simply will not survive without her,” Boone’s attorney said at the hearing.
The judge ordered $3 million in restitution, which Boone had already paid as part of more than $6 million in penalties, arrears and fees.
Fink told reporters after the hearing that the sentence was “disappointing.”
Manhattan U.S. Attorney Geoffrey S. Berman celebrated the sentence and investigation in a statement Thursday afternoon. “As Manhattan art gallery owner Mary Boone has admitted, her personal tax returns were more a work of impressionism than realism,” Berman said. “Seemingly in order from afar, the picture Boone painted of her profits, losses, and expenses was, upon closer inspection, a palette of lies and misrepresentations mixed together to avoid paying over $3 million in taxes.”
New York Magazine’s Senior Art Critic Jerry Saltz hinted on Twitter that Boone might not be alone in her tax behavior among the New York art gallery world.
“I say pay the $ but no jail time. Or ALL dealers would be locked-up,” Saltz tweeted last month, cheekily adding “Maybe drop a dime on Gagosian.”
In November 2017 Boone privately settled a federal lawsuit that was filed against her in Manhattan by actor Alec Baldwin.
Baldwin’s 2016 lawsuit accused Boone of passing off a counterfeit copy of Bleckner’s painting “Sea and Mirror,” complete with a phony Mary Boone Gallery inventory stamp, a fictitious back story and spurious explanation for the painting smelling inexplicably clean and bright.
Although the details of settlement are confidential, Baldwin told the New Yorker that he received a seven-figure sum, half of which he said he would donate to rebuild the Sag Harbor Cinema in the Hamptons.
Baldwin also said he plans to tour the fake Bleckner as part of a lecture series on art fraud.
“Maybe I’ll have Ross paint a picture of the seven-figure check that Mary paid me to settle,” Baldwin told the New Yorker.
Mary Boone Gallery was founded in 1977 and displayed works by artists including Jean-Michel Basquiat, Barbara Kruger and Jeff Koons.