A US district judge sentenced art dealer Ezra Chowaiki to 18 months in prison yesterday for an investment scam that defrauded prominent collectors, including Helly Nahmad and “Baby Jane” Holzer, of millions. He could have faced as much as two decades in prison, but prosecutors recommended a sentence between just four and five years.
Chowaiki pleaded guilty in May to wire fraud and admitted that he had sold stakes in artworks he didn’t actually own. He “fleeced his victims by entering into fraudulent agreements” to buy or sell art through his gallery on Park Avenue, according to a statement from district attorney Geoffrey S. Berman. “He sold clients’ artwork without authorization, and he took clients’ money for the purchase of artwork he never purchased.” Chowaiki often used the funds he received to repay other outstanding debts.
Judd Grossman, an attorney representing six of Chowaiki’s victims, decried the judge’s sentence. “Where Chowaiki admittedly stole millions of dollars in cash and art, many of his victims believe that an 18-month sentence—less than half of what the government recommended—is particularly light given the magnitude of these crimes.”
Chowaiki was also sentenced to three years of supervised release and ordered to forfeit his interest in more than 20 works of art, including those by Pablo Picasso, Edgar Degas, and Alexander Calder. He must also pay his victims restitution in an amount to amount be determined at a later date.
According to court papers, Chowaiki founded the gallery in 2004 and staged exhibitions by blue-chip artists including Picasso, Calder, Marc Chagall, and Degas. A 2009 lawsuit brought by a former gallery employee described the dealer as an “unsuccessful screenwriter” and former ice cream salesman with “no formal education or expertise in art.”
Chowaiki eventually lost control of the gallery last November when the business filed for bankruptcy and was taken over by a trustee to oversee its liquidation.
The case echoes that of former art dealer Lawrence Salander, who also engaged in a massive, multi-year scheme in which he made unauthorized sales, improperly pocketed proceeds, and sold shares in aworks that he did not own. Years after his scheme unraveled, collectors—including high-profile victims such as John McEnroe and Robert De Niro—were still sorting out claims linked to the fraud.
In 2010, Salander pleaded guilty to 29 counts of grand larceny and one count of scheming to defraud. At the time, the Manhattan district attorney’s office estimated he had cost his victims $120 million and ordered him to repay them in full. He was sentenced to six to eight years in state prison, of which he reportedly served seven years and was released in late 2017.
Daniel Parker, an attorney for Chowaiki, did not immediately respond to a request for comment.