Disgraced New York art dealer Ezra Chowaiki faces up to 20 years in prison after pleading guilty to wire fraud in an art investment scam. The dealer admitting to using blue-chip art to bilk clients of millions of dollars between 2015 and November 2017.
Chowaiki entered a plea deal in federal court in Manhattan on Thursday. As part of the deal, he agreed to forfeit $16.6 million and 25 artworks, including canvasses by renowned artists including Pablo Picasso, Marc Chagall, and Edgar Degas, according to Bloomberg. Although the dealer could be sentenced to two decades behind bars, prosecutors have recommended a sentence between four and five years.
Chowaiki admitted to selling wealthy clients a stake in blue-chip artworks he did not own. In some cases, he charged investors more than 100 percent of the work’s market value for shares. Court papers state that some of his victims include prominent dealers and art-world figures such as gallerist Helly Nahmad and former Warhol muse “Baby Jane” Holzer.
Prosecutors said that Chowaiki convinced up to six dealers to buy into artworks under the pretense of flipping them for a profit. Meanwhile, collectors were misled into consigning their prize artworks, which Chowaiki sold without their knowledge. Victims of the scheme stretched from New York and Pennsylvania to Ontario, Canada. One collector lost a painting valued at $1.2 million.
“We are pleased that Chowaiki has confessed to stealing our clients’ artworks,” Judd Grossman, a lawyer for the victims, told artnet News in an email. “While some of the works already have been recovered, efforts are ongoing to locate and retrieve a number of the others.”
The lost artworks have reportedly been sold to unsuspecting collectors around the world. Prosecutors have recovered about half of the missing works, according to New York Daily News.
Chowaiki is a minority owner of Chowaiki & Co. Fine Art. The business filed for bankruptcy in November amid three fraud-related civil suits, including one filed by Sotheby’s seeking reimbursement for a sale that went wrong.
Chowaiki’s attorney Daniel Parker did not immediately respond to artnet News’s request for comment.