MANHATTAN (CN) — The famed fine art auction house Sotheby’s pushed back on Wednesday against fraud claims from a Russian oligarch who accuses the international art broker of being complicit in a swindler’s duplicitous price-gouging scheme.
Russian billionaire Dmitry Rybolovlev claimed in a 2018 lawsuit that Sotheby's defrauded two British Virgin Islands trusts he controls by aiding and abetting art dealer Yves Bouvier in overcharging him by tens of millions of dollars on 38 artworks he purchased for $2 billion between 2003 and 2015.
Five years later, Rybolovlev’s civil case against Sotheby’s is standing trial, but only in connection to four specific artworks: Leonardo da Vinci’s 500-year old Renaissance painting of Jesus Christ "Salvator Mundi;” Rene Magritte’s “Le Domaine d’Arnheim;” Gustav Klimt’s “Wasserschlangen II;” and Amedeo Modigliani’s “Tête.”
U.S. District Judge Jesse Furman dismissed the bulk of Rybolovlev’s claims against Sotheby’s in a March 2023 ruling.
The Russian fertilizer magnate said the involvement of Sotheby’s “lent a veneer of legitimacy and expertise” to Bouvier’s fraud.
Sotheby’s has denied any wrongdoing and insists Rybolovlev’s grievances belong with the art dealer who repeatedly lied to him, not the auction house.
The first witness called in the trial was Mikhail Sazonov, a financial adviser to Rybolovlev, who handled the purchases of works by famed painters like Modigliani and da Vinci that Rybolovlev’s trusts bought through Bouvier.
Sotheby’s attorney Sara Shudofsky grilled Sazonov on cross-examination Wednesday over the billionaire’s lack of due diligence when it came to the art buyer he’d paid $2 billion while amassing a fine art collection.
“You never asked Bouvier for any documentation showing the prices that Bouvier paid to purchase the artworks from the original owners, is that right?” Shudofsky asked.
Poring over emails exchanges between Bouvier and Sazonov, as they hammered out the seven and eight figure purchases of artwork, the Sotheby’s attorney repeatedly asked Rybolovlev’s adviser, “That was a lie, right?”
“At the time of these e-mail exchanges, you believed all of Mr. Bouvier’s lies, correct?” she asked several times.
During direct questioning on Tuesday Sazonov testified that the opinions of an expert from Sotheby’s were used to persuade him to buy overpriced art.
Continuing his testimony for Rybolovlev’s attorney on Wednesday morning, Sazonov said he “shuddered” to recall learning in December 2014 that he had been duped by Bouvier’s upcharges for fictional negotiations with art sellers.
The revelation came after The New York Times published a story about the sale of "Salvator Mundi," a painting of Christ whose title translates in English to “Savior of the World.”
Though the story reported that this painting sold for anywhere from $75 million to $80 million, Rybolovlev claimed he paid $127.5 million for it, roughly a 50% markup.
“That was a difficult realization,” he testified. “I couldn’t imagine such a betrayal.”
Rybolovlev, who resides in Monaco, eventually sold “Salvator Mundi” at auction by Christie's in 2017 for a historic $450 million, becoming the most expensive painting ever sold at auction.
The painting was purchased in 2017 by an unnamed bidder, who was later identified as a Saudi royal who purportedly purchased it on behalf of the Louvre Abu Dhabi. It was supposed to have been unveiled a year later at the museum, but the exhibition was delayed indefinitely and the work has not been shown public since.
Rybolovlev’s lawyer, Daniel Kornstein, a partner at Emery Celli Brinckerhoff Abady Ward & Maazel, told jurors during opening arguments on Monday that Sotheby’s vice chairman for private sales worldwide Samuel Valette was part of cabal of Sotheby’s executives who "greased the wheels" to carry out the elaborate scheme.
“As a result of participating in the fraud, Sotheby’s made a lot of money,” Kornstein said. “Sotheby’s had choices, but they chose greed.”
Bouvier was not named as a defendant in the lawsuit, filed in the Southern District of New York by Rybolovlev’s offshore family trust Accent Delight International.
Valette is expected to testify later in the trial, alongside several famed New York art dealers and experts, including Warren Adelson, Sandy Heller and Nick Acquavella.
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