Prosecutors Are Issuing Subpoenas to Sotheby’s and Christie’s as Part of an Investigation Into Jeffrey Epstein’s Financial Dealings

Prosecutors in the US Virgin Islands issued the subpoenas.

Jeffrey Epstein in 2005. © Patrick McMullan. Photo: Neil Rasmus/PMc.

Sotheby’s and Christie’s are the targets of subpoenas issued by prosecutors in the US Virgin Islands as part of an ongoing investigation into Jeffrey Epstein, the convicted sex trafficker who died by suicide in a Brooklyn jail in August 2019.

The subpoenas demand that the auction houses turn over documents relating to Epstein’s art purchases. A third subpoena, sent to a firm called the Chicago Deferred Exchange Company, also focuses on his art trades. The news was first reported by Chris Spargo in OK! magazine.

The scandal also implicates investor and MoMA board chair Leon Black, who made at least $50 million in payments and charitable donation to entities associated with Epstein over the course of their friendship. In August, Black was also served with subpoenas for his ties to Epstein, according to the Judiciary of the US Virgin Islands’ website.

According to the website, the subpoena issued to Christie’s is dated December 2, while those issued to Sotheby’s and the Chicago Deferred Exchange company are dated December 4. Neither Sotheby’s, Christie’s, nor the Chicago Deferred Exchange Company appear to have received the actual subpoenas yet.

“If properly served, Sotheby’s will endeavor to comply with the subpoena as appropriate,” a representative for the auction house told Artnet News. Christie’s declined to comment.

A representative for the Chicago Deferred Exchange said: “My company had nothing to do, and no knowledge of, the issues you are investigating.” The spokesperson referred Artnet News to a contact at Black’s office, Elysium Management LLC, which did not respond to request for comment.

Leon Black at the Museum Of Modern Art in 2018. Photo by Dimitrios Kambouris/Getty Images for Museum of Modern Art.

Leon Black at the Museum Of Modern Art in 2018. Photo by Dimitrios Kambouris/Getty Images for Museum of Modern Art.

Several names in the Sotheby’s subpoena that prosecutors are seeking information about are redacted. The subpoena issued to the Chicago Deferred Exchange refers to a legal decision regarding an entity called CDECRE ARTWORK EAT LLC that was delivered in New York State’s Division of Tax Appeals in March of this year.

The eight-page ruling describes transactions regarding two works by Paul Cézanne and one by Pablo Picasso, as well as an unidentified “petitioner” for the LLC (presumably Epstein), who reported a value of $139 million for the three works.

Each work changed hands at some point. One sale involved an entity called Narrows Holdings LLC, a company that Black has reportedly used to acquire art. Another sale, of the Picasso work, involved DSOCA Holdings, LLC, an unidentified Delaware-based company.

It remains unclear who purchased the pictures. No current legal documents name Black as the buyer, nor Epstein as his agent.

The New York state taxation division conducted an audit of CDECRE ARTWORK EAT LLC for the period between June 2015 and November 2016. The main issue centered on whether the trades involving the three works, which changed hands as part of 1031, or like-kind, exchanges—thereby deferring tax on the capital gains for the seller—needed to be taxed at a higher rate. (Since 2018, art sales are no longer eligible for 1031 trades. These sales took place prior to the change in law.)

On each occasion, the tax division denied the like-kind exchange status, and took the position that another $3.6 million in total was owed in taxes on the sales.

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