MANHATTAN (CN) — Concluding his witness testimony in New York federal court on Friday, Russian fertilizer tycoon Dmitry Rybolovlev accused the famed Sotheby’s auction house of enabling an unscrupulous art dealer to pilfer tens of millions of dollars from him.
From 2003 to 2015, Dmitry Rybolovlev claimed, Swiss art dealer Yves Bouvier overcharged him on 38 artworks while collecting a 2% commission fee on the eight- and nine-figure deals. All told, the purchases totaled $2 billion.
A dozen of these masterpieces were sold through Sotheby’s — and in a 2018 lawsuit, Rybolovlev argued the auction house was uniquely positioned to facilitate Bouvier’s fraud. Standing trial in the Southern District of New York, the billionaire magnate is seeking $232.5 million in damages from the auction house.
Rybolovlev, 57, hit a windfall when he sold two Russian fertilizer producers for almost $7.5 billion in 2010 and 2011.
Now residing in Monaco, he turned red and wiped away tears on the witness stand on Friday as he answered redirect questions from his attorney about his efforts to hire good people to work for him in the opaque and unfamiliar world of fine-art collecting.
“When you trust people — and I’m not a person who trusts easily — but when a person is like a member of your family, there’s a point in time at which you begin to completely and utterly trust a person,” Rybolovlev said through a Russian language interpreter.
Rybolovlev testified that valuations from the prestigious auction house “produced the impression that everything was fine” when Bouvier presented him with opportunities to purchase blue-chip art, including da Vinci’s “Salvator Mundi” painting ($127.5 million) and Amedeo Modigliani's limestone sculpture "Tête" ($83 million).
“The key was the document from Sotheby’s,” he said through a Russian language interpreter. “When you’re provided an estimate by the most respected organization in the business, what other decision can you reach?”
Sotheby’s has denied any wrongdoing. The company insists Rybolovlev’s grievances are with the art dealer who repeatedly lied to him — not the auction house.
On cross-examination, Sotheby’s attorneys grilled Rybolovlev on his responsibility for his own business practices. The questions echoed similar grilling leveled earlier in the trial against Mikhail Sazonov, Rybolovlev’s financial adviser who handled the art acquisitions through Bouvier.
“You would agree that your decision to work with Mr. Bouvier was a mistake?” the Sotheby’s layer asked.
“Yes,” Rybolovlev replied.
“Sitting here, you would agree that your decision to hire and delegate everything to Mr. Sazonov was mistake?" the defense lawyer continued.
Rybolovlev declined to throw his financial adviser under the bus — though he did testify that Sazonov's handling of the art sales left room for improvement.
“We all make mistakes,” he replied. “If the system was transparent, this would not have happened.”
“You’re the boss,” Sotheby’s attorney said. “You’re the captain of the ship?”
“Generally speaking, yes,” Rybolovlev replied.
“Are you familiar with the expression ‘the buck stops here?'" the Sotheby’s lawyer asked, concluding the defense’s cross-examination of the fertilizer magnate.
“No, I do not know this term,” the billionaire replied. “But as I understand it, it’s true.”
After successfully whittling down charges last March on a motion to dismiss, Sotheby’s is standing trial on charges in connection to just four sales of artwork.
In addition to the da Vinci and Modigliani purchases, Sotheby’s also faces aiding and abetting charges for sales of Rene Magritte’s “Le Domaine d’Arnheim” and Gustav Klimt’s “Wasserschlangen II”.
Rybolovlev’s lawyers have pointed the finger of culpability at Samuel Valette, Sotheby’s vice chairman for private sales worldwide.
Valette is expected to be called as a witness when the trial resumes on Tuesday, January 16th. Rybolovlev has described him as a “greedy and overly ambitious middle manager at Sotheby’s” who used the company’s reputation to help Bouvier cheat Rybolovlev out of millions.
U.S. District Judge Jesse Furman, the Obama appointee overseeing the case, has previously urged the two parties to settle the remaining claims outside of court. A trial “would be expensive, risky, and potentially embarrassing to both sides,” he warned.
With jurors out of the room on Friday, Furman gently reiterated that suggestion. Even with the trial underway, he noted, Sotheby’s and Rybolovlev are still free to continue settlement negotiations.
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