Russian Billionaire Dmitry Rybolovlev Testifies in Contentious Sotheby’s Trial

Rybolovlev took the stand for the first time in his ongoing case against the auction house.

Dmitry Rybolovlev. Photo by Valery Hache/AFP via Getty Images.

“Just cut to the chase—do you think he will be testifying today?” was the polite yet firm question posed by Judge Jesse Furman this morning to an attorney for Dmitry Rybolovlev about the ongoing proceedings wherein the Russian billionaire alleges auction house Sotheby’s was at least partially complicit in a plan to defraud him. He was speaking of Rybolovlev himself.

The trial is nearing the end of the first week of an estimated six to decide whether Sotheby’s indeed helped Swiss art dealer Yves Bouvier allegedly defraud Rybolovlev in dozens of multi-million dollar art deals, the opaque structure of which obscured the fact that Bouvier himself was the seller—ostensbibly and allegedly both brokering and secretly participating in the transactions.

The allegation against Sotheby’s is that a senior private-sale specialist, Samuel Valette, “aided and abetted” Bouvier in carrying out the alleged fraud. Valette will travel to the U.S. from London next week to testify. Allegations against Bouvier made by Rybolovlev in jurisdictions across the globe over several years have all been dismissed or were settled out of court.

After a quick succession of expert witnesses in the morning session, a hush fell over the courtroom shortly after noon when Rybolovlev himself took the stand. His voice could barely be heard as he received questions and relayed answers through interpreters who stood immediately next to him and delivered answers through the witness stand microphone.

One of the fertilizer baron’s attorneys, Daniel Kornstein, spent nearly two hours moving step-by-step through Rybolovlev’s first meeting with Bouvier, around 2002, and the business relationship and friendship that developed over the next decade as they transacted roughly 38 deals of blue-chip art for roughly $2 billion. It was only later, in 2014, that Rybolovlev says he discovered Bouvier had been defrauding him to the tune of around $1 billion

Kornstein’s questioning echoed that of Rybolovlev’s right-hand man Mikhail Sazonov, the opening witness, who appeared in court yesterday. At several points that questioning focused on whether or not emails from Valette that Bouvier forwarded to Sazonov used the “tu” or “vous” forms in French, the original language of the correspondence. An attorney for Rybolovlev highlighted the use of the more formal “vous” form in communications that presumably took place once the two were well acquainted and the continued inclusion of Valette’s signature block in the emails. It was not immediately clear why the signature block was relevant to the prosecution’s case. 

Today, the lengthy examination of Rybolovlev did manage to lift the curtain on his jet-setting lifestyle and some of his priciest art purchases, including the Leonardo da Vinci Salvator Mundi that Rybolovlev bought for $127.5 million, and Gustave Klimt’s Water Serpents (1907), for which he paid $186 million. Both were at sharply higher prices than what Bouvier had acquired them for before “flipping” them to Rybolovlev.

Attorneys for both Rybolovlev and Sotheby’s frequently pin-pointed who was at which meeting, in which city or country it took place, and what language or languages were spoken, and by whom. Bouvier and Rybolovlev relied on interpretation by others in their dealings, as Bouvier speaks French and Rybolovlev speaks Russian.

At times the questioning took tedious, almost surreal turns, including details about how people were dressed at various art viewings, and when and whether Bouvier had ever attended one of Rybolovlev’s birthday parties. He did.

The tedium was a contrast to yesterday’s at times hard-hitting testimony, which highlighted how Bouvier hid the fact that he was party to transactions with the Rybolovlev-connected entities that bought and sold art. Asked in cross-examination repeatedly what he thought of Bouvier’s quoted prices, Sazonov would say only “now I know it was a lie.” 

In the redirect questioning, the attorney for Rybolovlev doubled down on a transation where the Rybolovlev-connected entity paid a €250,000 fee, allegedly “as an agent,” to an unidentified entity linked to Bouvier.

According to the emails provided in evidence, Bouvier had told Sazonov he’d meet the owner of the work in question in Paris and act as guarantor to solidify the transaction, apparently omitting the fact that Bouvier was in fact the beneficial owner of the work. “Would you pay if you’d known [Bouvier] was the seller?” the attorney asked. “No,” Sazonov said. “Did you think he was going to meet with himself in Paris?” she asked. “No,” was the reply.

In a statement to Artnet News, Bouvier’s attorneys reiterated that “the allegations being made against Mr. Bouvier in the New York proceedings have already been rejected by authorities all around the world. Since starting legal action against Mr. Bouvier in 2015, all nine of the court cases filed in Singapore, Hong Kong, New York, Monaco and Geneva have been discontinued by the authorities.”

Swirling questions about whether Rybolovlev would appear in the U.S. at all were put to rest in recent days when he showed up in court, sitting at a desk at the front of the room next to his legal team and listening intently to the proceedings with headphones that relayed language from the two interpreters trading off with one another.

Today, Kornstein focused on Rybolovlev’s life in the former Soviet Union, where he became a medical doctor and later a businessman before moving with his family to Geneva in 1995. It was there, when he bought a house that had been owned by a former collector, that he first became interested in buying art. His first purchase was a painting by Marc Chagall, he said.

“The house was constructed in such a way that you had to have art,” Rybolovlev said. “The spotlights were already installed. It was either get something on the wall or change something.” While people come to art in many different ways, he said, “my way was through electricity and light bulbs.”

Rybolovlev and Bouvier settled their years-long disputes in several jurisdictions in Europe last month, as reported.

Rybolovlev’s testimony will continue tomorrow followed by a cross-examination of him by Sotheby’s, which is sure to challenge his accounts of dealing with Bouvier and especially Valette.

Incidentally, just north of the federal courthouse where the trial is occurring, was a crush of cameras, crowds, and a few protestors chanting “No Dictators” at the closing of former president Donald Trump’s New York fraud trial.

Judge Furman referenced an earlier high-profile “arms length” real estate deal that Rybolovlev had been involved in with “the former president.” In that transaction, which is not part of or mentioned in the Sothey’s lawsuit, Rybolovlev paid $95 million for a Palm Beach, Fla., estate, in 2008. He then carved up the 60,000-square-foot beachfront property into three lots—and eventually made a hefty profit.

“I’m assuming that’s not going to be an issue,” Furman said, referencing the deal, moments before Rybolovlev took the stand. 

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