Art dealers and collectors are coming under increasing scrutiny for offenses from fraud to tax evasion, with New York’s top cop kicking off his own campaign against tax cheats on Tuesday.
Attorney General Eric Schneiderman announced two tax settlements -- one with Aby Rosen, a New York real estate developer with a storied half-billion dollar art collection, and another with a sales executive at the prominent Gagosian Gallery Inc. More are on the way, according to people familiar with the inquiries.
Rosen -- a Manhattan developer known for displaying works by Picasso and Warhol at marquee properties including the Seagram Building and Lever House -- agreed to pay $7 million related to claims that he avoided paying sales and use taxes on $80 million worth of fine art he had commissioned or bought since 2002.
In a separate deal, Schneiderman’s office said it had reached a settlement with Victoria Gelfand, a Gagosian Gallery director, who agreed to pay $210,000 in unpaid taxes on more than 30 pieces of art she had purchased through her privately owned companies.
The settlements don’t include admissions of wrongdoing.
Art Market
The accords are part of a wave of investigations into financial dealings in the robust art market. Soaring prices and secrecy in the art world -- as well as the lack of regulation surrounding major transactions -- have in recent years brought allegations that collectors and dealers have used prized works to launder money, dodge taxes and defraud purchasers and investors.
In China, Switzerland and across Europe, governments have placed increased scrutiny on the ways major art collections are used to hide ill-gotten wealth and avoid taxes. U.S. officials have recently taken an interest in the art world, with investigations touching on Swiss collector and dealer Yves Bouvier and Gagosian chief Larry Gagosian, both of whom have denied wrongdoing.
The New York Attorney General’s office said its inquiry was focused on the ways wealthy collectors and dealers structure their transactions to skirt state tax laws and deprive the state treasury of millions of revenue. People within the New York art world say the two settlements announced Tuesday are part of a more sweeping review by Schneiderman’s office.
Not Public