A dealer who exposed the art world’s lack of due diligence is himself a victim of Lisa Schiff’s alleged Ponzi scheme

Isn’t the old adage “practice what you preach” applicable to the art world?

Recent legal proceedings underscore how seemingly difficult it can be, even for those steeped in the art market, to consistently follow this advice.

A prominent New York dealer who served as an expert witness in lawsuits over art deals gone wrong was simultaneously allegedly the victim of a fraudulent art adviser.

Adam Sheffer is a seasoned dealer for galleries such as Cheim & Read, Pace and Lisson, who even served as president of the prestigious Art Dealers Association of America (ADAA) for the past several years. He is now a private dealer and advisor.

But, although he has not been identified by name, he is referenced in a recent lawsuit that sent shockwaves through the art world. It’s about the alleged fraud perpetrated by Lisa Schiff, a high-level artistic adviser who now closed his consultancy business and initiated the process of triaging creditor claims, according to documents filed in the New York State Supreme Court.

The suit, which Artnet News reported earlier, accused Schiff and his company, SFA Advisory, of breach of contract, conversion, fraud, breach of fiduciary duty and conspiracy. The plaintiffs were identified as real estate heiress Candace Barasch and Richard Grossman and throughout the complaint further referred to the involvement of “Grossman’s spouse”, although not specifically by name.

Plaintiffs are seeking their share of the lost profit from a $1.8 million sale of a painting by Adrian Ghenie, Uncle 3 (2019), linked to the now beleaguered concessionaire. The lawsuit says Barasch purchased a 50% stake in the painting and Grossman and his wife acquired the remaining 50%, or 25% each.

But Sheffer also recently emerged as an expert witness in a distinct and long-standing legal body matter which also scandalized the art world. The lawsuit, filed more than three years ago, reflects a dispute over a multimillion-dollar Rudolf Stingel painting linked to disgraced art dealer Inigo Philbrick, who sold several competing ownership shares in the painting before selling it. trying to flip it for a profit at a failed Christie’s auction. earlier that same year.

In an affidavit dated May 12, Sheffer, as an expert witness, exposed a lack of due diligence in a convoluted fractional art flip deal gone wrong.

Sheffer weighed in on a three-way fight for control of Stingel’s roughly $6 million, noting that one of the competing parties, Satfinance, controlled by investor Sasha Pesko, “did nothing to protect its interests. , as it did not retain possession of the Stingel Picasso, or register its interest via a UCC-1 or filing with Companies House in the UK.

The emphasis on due diligence is all the more striking as Sheffer he himself appears to be one of the injured parties, although not a plaintiff, in the lawsuit against Schiff. This lawsuit was filed virtually at the same time as the affidavit (May 11), in the Supreme Court of the State of New York.

But back to the Stingel affair. In expert witness testimony, Sheffer addressed the role of FAP (Fine Art Partners), a German-owned art investment company whose claim for the Stingel and other works sparked a storm of litigationand ultimately criminal charges against Philbrick in late 2019 (Philbrick is currently serving a prison sentence For the massive $86 million criminal fraud he orchestrated and ultimately pleaded guilty.)

According to Sheffer, as for Satfinance: “The same can be said of FAP: it has not filed either UCC-1 or a Companies House registration, so as to inform the world, so to speak, of its stake in the Stingel. Picasso. nor did he retain possession of the artwork,” according to Sheffer’s affidavit.

While Sheffer targeted the parties in the Stingel case for not documenting their ownership or retaining possession of the work, the lawsuit against Schiff for the Ghenie clarifies that no one other than Schiff had control or possession of the work. Ghenie painting after the acquisition. in 2021.

Neither Sheffer nor his attorney responded to requests for comment or questions about documenting their involvement in the Ghenie. Pesko and Satfinance’s attorney declined to comment.

Sheffer states in his affidavit that he “concluded hundreds of transactions between galleries and individuals.” collectors, museums, foundations and [is] versatile in understanding the nuance of a variety types of artistic transactions depending on the work of art (for example, primary market versus secondary market sales) and the type of buyer (private collector versus museum or foundation.)”

Meanwhile, the details of the Schiff case, as Hollywood writers like to say, rhyme with those of the Stingel case.

According to the Ghenie lawsuit: “As soon as the sale is made, the [Ghenie] The work was not delivered to any of the Applicants individually. Instead, through [Schiff] Accused, he was supposed to have been sent from storage at Crozier Fine Arts at the Barasch Art Storage Unit in Uovo, Delaware. However, instead to send the work to Uovo, Schiff had the work sent to Maquette Fine Art’s storage facility in Delaware, with claimants bearing the cost of packing and shipping the Artwork. While, on information and conviction, the work of art was placed in a storage unit at Name of plaintiff Barasch, day to day, defendant Schiff controlled the storage unit and what was in it. »

Whether or not someone put up a stake (and it doesn’t appear that they did), Schiff’s first complaint makes it clear that she controlled the proceeds of the sale and did not distribute them, including understood that she “exerted dominance and control over the artwork, which seriously interfere with the claimants’ superior rights of dominance and control…[and] exercised dominance and control over the proceeds from the sale of the work of art. »

The lawsuit claims that Schiff emailed “Grossman’s spouse” in early May even as “his long business network was imploding following his undisclosed embezzlement and artwork belonging to the plaintiffs and others – which was revealed on Monday, May 8, 2023.”

Sheffer clarified that his affidavit in the Stingel case was submitted in response to counsel for Guzzini Properties. Guzzini is a front company run by British billionaire brothers Simon and David Reuben. The Reubens loaned Philbrick $6 million along with several allegedly pawned artworks, including the Stingel. They are among the parties seeking ownership or title to the Stingel after Christie’s failed sale.

Sheffer, who wrote that his pay for preparing the affidavit is $400 an hour, added that the pay “does not depend on the opinions I express or any outcome of this litigation.