Ezra Chowaiki has been charged with wire fraud, conspiracy and transportation of stolen property in connection with a kiting scheme the Feds say goes back to 2015. The whole mess was uncovered a few weeks ago when a consignor had to sue to get their de Chriico back from the gallery. Chowaiki filed for bankruptcy revealing $12m in liabilities against $300k in assets. The last two years have been tough for Chowaiki:
The gallery’s revenue plummeted in recent years, court records show. In 2015, the gallery had revenue of $35.2 million. That fell by more than half in 2016 to $15.6 million, according to bankruptcy court filings.
The charges come after Chowaiki’s financial backer, according to Bloomberg, moved to distance himself from the shenanigans:
The gallery’s majority owner is David Dangoor, who wasn’t charged. Dangoor’s attorney, Anthony Dougherty, said in an interview last month that he contacted the New York Police Department’s Major Case Squad after the gallery’s director alerted him to perceived financial irregularities involving Chowaiki.
It turns out Chowaiki was over-selling shares in works like the de Chirico. That includes a Cayman Islands company with connections to an art dealer who does business in Japan who was offered 50% in a work that Chowaiki didn’t own. All of this behavior comes on top of a lawsuit filed by Sotheby’s:
Sotheby’s said it hired the gallery as an agent to purchase the Henri Matisse painting “Titine Trovato in Dress and Hat” for $12 million, which Sotheby’s then planned to resell for $15 million to $20 million. The deal didn’t go through as planned and the gallery ultimately sold the piece for $4.75 million in 2012, with Chowaiki and another partner on the hook to repay the loss, according to the suit.
New York Art Dealer Duped Clients Out of Millions, U.S. Says (Bloomberg)
