Art Advisor Lisa Schiff Hit With ‘Ponzi Scheme’ Lawsuit After an Adrian Ghenie Art-Flipping Deal Goes Awry
Disgruntled former clients have pointed to "lavish" spending and accused Schiff of running a Ponzi scheme.
High profile art advisor Lisa Schiff has been hit with a lawsuit by two clients and longtime friends: real estate heiress Candace Barasch, and Richard Grossman.
The plaintiffs allege that Schiff, who runs the New York-based Schiff Fine Art advisory, owes them $1.8 million ($900,000 each) related to the sale of a painting by sought-after Romanian artist Adrian Ghenie. Barasch and Grossman filed a complaint in New York State Supreme Court on May 11. The causes of action are breach of contract, conversion, fraud, breach of fiduciary duty, and conspiracy.
The complaint appears to be yet another example of flipping art for profit gone wrong.
In addition to the money purportedly owed, the plaintiffs accuse Schiff of operating a “Ponzi scheme.” Their filing outlines Schiff’s alleged lavish spending, including a $25,000 a month New York apartment, international first class travel with concierge services and limousines, vacations at five-star hotels, and shopping sprees in New York and Europe for designer clothes and jewelry.
Meanwhile, the plaintiffs claim, Schiff doesn’t have the money she owes them. Knowledge of Schiff’s personal spending was allegedly gleaned from extensive travel and personal friendship with the advisor, the pair asserts.
Schiff’s attorney John Cahill declined to comment. Wendy Lindstrom, the attorney representing Grossman and Barasch, said “it is disgraceful that Schiff, who was trusted professionally and personally, exploited that trust.”
In April 2021, Schiff alerted Barasch and Grossman that a Ghenie painting, Uncle 3 (2019), was available for purchase. After discussions, including with Grossman’s spouse, who is not identified by name, they agreed to buy the work. The original purchase price is not disclosed in the court documents, however Barasch took a 50 percent share and Grossman and his spouse each acquired a 25 percent interest. Neither took possession of the work; it was shipped to a storage unit in Delaware.
Ghenie is a sought-after painter who is represented by mega-gallery Pace. His paintings evoke the torqued imagery of Francis Bacon portraits. “These figures, largely derived from mid-twentieth-century historical sources, appear in haunting interiors as dreamlike or cinematic vignettes,” the artist page on the Pace website reads. Ghenie appropriates tropes from slapstick film in his “Pie Fight” paintings, which mash up figuration and abstraction. The record for a Ghenie work sold at auction is $10.3 million for Pie Fight Interior 12 (2014), sold at Christie’s Hong Kong in May 2022.
In November 2022, Bartsch and Grossman agreed to a resale of the artwork, entering into the deal, to be brokered by Schiff, via oral agreement. They agreed to sell the work for $2.5 million and split the proceeds, after a commission to Schiff of ten percent of the price, or $250,000.
According to the complaint, the deal went through Sotheby’s Hong Kong and the work was delivered to the auction houses’s York Avenue headquarters in December 2022. Sotheby’s declined to comment.
In January, $225,000 of the sale proceeds were wired to Grossman and Barasch (a total of $450,000), and Schiff took her commission at the time, according to the complaint. Schiff promised to disburse the additional $1.8 million ($900,000 each) to the investors on March 26.
However, prior to March 26, Schiff “requested an additional thirty days to make the payment, asserting the delay was an accommodation to the purchasers in Hong Kong, but assuring Plaintiffs that the purchasers were not backing out of the sale, and guaranteeing that the $1.8 million payment would be made,” the complaint says.
By early this month, when neither client had received the balance of promised purchase price, they texted Schiff that they were frustrated with the delay. According to the complaint, Grossman had made it clear that “these proceeds were intended and necessary for the support of Grossman’s elderly in-laws, specifically for the cost of moving them from the hospital into an assisted living facility.” At that time, Schiff responded that she was “working on it….” the suit says.
However, on May 8, “Schiff conceded to Plaintiffs that the money owed to them from the sale of the Ghenie painting was gone,” the complaint asserts.
Grossman contends Schiff revealed this at a final in-person meeting. “For the first time, Schiff told him she did not have the money owed to Plaintiffs, and to call her attorney—and then walked away from him.”
Grossman and Barasch are demanding that Schiff return the $250,000 commission earned on the deal, plus interest, as well as “damages of least $2.05 million plus interest.”
Follow Artnet News on Facebook:
Want to stay ahead of the art world? Subscribe to our newsletter to get the breaking news, eye-opening interviews, and incisive critical takes that drive the conversation forward.