A $1 billion fraud trial between billionaire Russian oligarch Dmitry Rybolovlev and Sotheby’s auction house began this week in New York, in a case that could shed light on the inner workings of the secretive art world.
Rybolovlev is suing Sotheby’s, alleging that the storied auction house helped an art dealer trick him into overpaying for pieces — including the most expensive artwork ever sold, Leonardo da Vinci’s Salvator Mundi.
The oligarch alleges Swiss dealer Yves Bouvier cheated him by buying the masterpieces for one price and then selling them for tens of millions of dollars more. Bouvier denied the claims, and the two last month settled out of court. But Rybolovlev argues Sotheby’s is also liable, alleging it gave Bouvier appraisals that he used to inflate the sale prices. Sotheby’s denies the allegations.
The case could change how the art world does business
A win for Rybolovlev could have “seismic implications” for the art business, The Art Newspaper said, potentially ushering in more transparency in an industry where parties engaging in expensive transactions rarely have full knowledge of who they are dealing with or in what precise capacity. The trial could bring to light practices that are commonplace in the world of high-end art sales but would constitute a breach of compliance and ethics rules in other industries, ARTnews reported – and such revelations “could have lasting effects on how business is done in the shadowy corners of the secondary market.”
Sotheby’s argues this is a case of buyer’s remorse
An art lawyer without ties to the case told The Wall Street Journal that Sotheby’s role looks more like high-stakes salesmanship than fraud, adding that buyers in multi-million dollar art deals should consider the details carefully. Lawyers for Sotheby’s have echoed this sentiment, arguing the lawsuit is a case of buyer’s remorse. Rybolovlev — a businessman who made his money as a fertilizer magnate in Russia — has “good reason to be angry with himself” after spending so much on art without taking “the most basic steps” to protect himself from fraud, The Associated Press reported the auction house’s lawyer saying in court this week.
Oligarch previously bought property from Donald Trump
It’s not the first time a transaction by Rybolovlev has sparked controversy. For years, questions swirled around the Russian oligarch’s 2008 purchase of a property owned by former U.S. President Donald Trump for an eyewatering sum. Trump sold the 62,000-square-foot Palm Beach mansion to Rybolovlev for about $95 million, more than double what he had paid four years prior and reportedly the most expensive U.S. residential property sale ever. But the deal became a political landmine for the former president as his relationship with Russia came under the microscope.