New York art adviser Lisa Schiff faces a second trial of one of her longtime friends, prolific art collector Candace Carmel Barasch, alleging multiple instances of fraud and embezzlement. The original trial was filed on May 11 by Barasch, Richard Grossman and his wife, and described an allegation that Schiff ran a “Ponzi scheme” and failed to disburse $1.8 million in profits from the sale of a painting by Adrian Ghenie in co-ownership that she negotiated. The art consultant has since filed for bankruptcy as of May 17, executing an assignment for the benefit of creditors to liquidate its goodwill in order to repay its debts.
Since the initial complaint was filed, Barasch, a real estate heiress who has enjoyed a close friendship and business partnership with Schiff and Schiff Fine Art respectively for nearly two decades, has been contacted by various galleries including her and her husband Michael. saying purchased artwork from Schiff’s consulting firm. He was then told that several of his purchases brokered by Schiff Fine Art had never been initiated or paid for in full, even though the Barasch couple wired the funds to Schiff to close the sales.
The separate lawsuit filed by the Barasch couple yesterday, May 17, alleges that over the past three years, Schiff embezzled more than $2.5 million from them in funds intended for the purchase of several works of art to “finance his lavish lifestyle”, covering debts owed to his other clients, and the “consumptive art purchases” of other clients. This does not include additional sales tax, packaging, shipping and storage costs which would add up to hundreds of thousands of additional dollars, pushing that number up to over $3 million. of dollars.
Neither the attorneys representing the Baraschs nor those representing Schiff responded to Hyperallergic immediate request for comment.
Schiff allegedly partially admitted this to Candace during a phone call about the misappropriated profits from the brokered sale of Adrian Ghenie’s painting on May 8, days before the initial lawsuit was filed. According to the court filing, Schiff admitted that she and her consulting firm “drilled themselves into a big financial hole that they couldn’t get out of,” and that she had originally thought about filing for bankruptcy before the pandemic hit. but chose not to in an effort to avoid a criminal investigation. When Candace asked how these financial difficulties had affected her and her husband’s art collection, Schiff mentioned the failed purchase on their behalf of a sculpture by Sarah Lucas from the Gladstone Gallery. About 15 works of art believed to be part of the Barasch couple’s collection had been affected by Schiff’s embezzlement.
Schiff’s bankruptcy document states that she and her consulting firm are “indebted to various persons in various sums of money which [they] are unable to pay in full” and seek to repay the amount on a pro rata basis by “the assignment and distribution of all [their] property for this purpose.
