Former tennis champion John McEnroe was duped along with investment firms, art owners and collectors and the Bank of America in a sophisticated $88 million art investment scam revealed in New York today.
Art dealer Lawrence Salander (59) was arrested at his New York home today when he and his gallery were charged with 100 counts, including grand larceny and securities fraud, Manhattan District Attorney Robert Morgenthau told a news conference.
Officials said there are 26 victims of Salander's scheme including McEnroe, who invested $2 million for a half share of two paintings, Arshile Gorky's "Pirate I and II." McEnroe never recouped the money after his share in the paintings was sold to another collector, authorities said.
It is alleged the scheme, which lasted from 1994 to 2007, included luring investors who paid cash in exchange for shares of ownership of works of art.
"He sold artwork not owned by him and kept the money and lured investment money in fraudulent investment opportunities," Mr Morgenthau said, adding Mr Salander used the money to fund "an extravagant lifestyle" of lavish parties and private jets.
Salander at times inflated the value of paintings to score greater investments that were not returned to investors, according to authorities.
The investigation of Salander, the former owner of Salander-O'Reilly Galleries, is continuing.
McEnroe was alerted to the scheme when he learned an art collector owned the same painting he had, authorities said.
Most of the artworks, which are yet to be valued, are being held in the custody of a bankruptcy court in Poughkeepsie, New York.
Many of the investors named today already have filed civil claims against Mr Salander and his gallery, which filed for bankruptcy and closed in 2007.
Reuters