Russian billionaire rests case in Sotheby's art fraud trial

MANHATTAN (CN) — Lawyers for Russian billionaire Dmitry Rybolovlev rested their case Tuesday after a Sotheby’s executive’s weeklong testimony in which he denied the renowned auction house’s involvement in an art dealer’s price-gouging scheme.

Rybolovlev claims Sotheby’s aided and abetted Swiss art dealer Yves Bouvier, who sold him 38 works of art at inflated prices from 2003 to 2015. In total, the Russian billionaire spent $2 billion on the deals.

Sanford Heller, founder of the art advisory organization The Heller Group, was the last witness called by Rybolovlev’s attorneys before they rested their case.

Heller, who has worked with Rybolovlev as an art adviser since 2015, said he was alarmed when the pair first met in St. Bart’s in 2014 and he learned about the fertilizer tycoon’s art acquisitions.

While Rybolovlev was showing Heller his recent purchases, the art adviser said he was surprised to hear the billionaire only bought art through private sales and never through auctions. Particularly, he was concerned when Rybolovlev said “nothing great” appears at auctions which, Heller said is untrue.

“It sounds like you’re being controlled,” Heller said he told Rybolovlev at the time, referring to the billionaire’s professional relationship with Bouvier.

According to Heller, auction sales offer more public prices while it’s easier for private sale prices to be concealed.

Sotheby’s attorneys launched their case following Heller’s testimony and called Alex Bell, co-chairman of Sotheby’s “Old Masters” department, to the stand.

Bell, who has worked in the “Old Masters” department for over 30 years, said the term refers to artists and their paintings that originated from the 1300s to 1850. That includes Leonardo da Vinci’s famed “Salvator Mundi” painting that is central to the case against Sotheby’s.

The work, long thought to be lost, depicts Jesus Christ in a blue frock, making the sign of the cross with his right hand while holding a crystal orb in his left.

“It’s quite a famous painting and has an interesting story,” Bell said.

The painting was rediscovered in 1900 and underwent an extensive restoration in 2007 before being unveiled at a da Vinci exhibition at The National Gallery in London in 2011.

“It gave everybody the first real opportunity to see this painting in the context of the artist,” Bell said.

According to Bell, the painting is especially significant because of the rarity of da Vinci’s works, who he referred to as “the most famous artist in the world.”

Particularly, he pointed to elements typical of da Vinci’s work that are prevalent in the painting, including the way Jesus Christ seems to be looking directly at the viewer and how his right hand nearly jumps from the piece.

“It’s very direct with a haunting beauty,” Bell said.

Bouvier purchased the painting through a deal with Sotheby’s for $83 million. But, in emails shown in court this week, the art dealer told Rybolovlev’s financial adviser Mikhail Sazonov that he was in tough negotiations with the painting’s sellers and could not get them to sell the painting for less than $127.5 million.

After the purchase, Bell said he conducted the insurance valuation for the painting and valued it at $100 million, nearly $20 million more than the purchase price.

According to Bell, he considered a variety of factors when conducting his valuation including the significance of the painting and the amount needed to replace the item with a work of similar value if something were to happen to it.

U.S. District Judge Jesse Furman, a Barack Obama appointee, dismissed the bulk of Rybolovlev’s claims this past March but still ordered Sotheby’s to face trial for aiding and abetting Bouvier in manipulating the prices of four art pieces for sale.

In addition to “Salvator Mundi,” the other three art works in question are Amedeo Modigliani’s limestone sculpture “Tête,” Rene Magritte’s “Le Domaine D’Arnheim,” and Gustav Klimt’s “Wasserschlangen II.”

Bouvier is not named as a defendant in this case but has faced criminal charges in France, Monaco and Switzerland. The last of the charges against him were dismissed following a confidential settlement in Geneva.

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