60-year-old New York art dealer pleads guilty to art investment scam

A New York art dealer pleaded guilty to engineering a nearly $100 million art investment scam that duped tennis star John McEnroe, actor Robert De Niro and major figures in the art world.

Lawrence Salander, 60, faces six to 18 years in prison and must pay $120 million in restitution to victims under a plea agreement, in which he pleaded guilty to 28 counts of grand larceny in state Supreme Court in New York. He admitted to an array of schemes, from selling shares of the same work of art to multiple owners to selling artwork and pocketing the proceeds.

Mr McEnroe lost $2 million after investing in a share of two paintings, Arshile Gorky's Pirate I and II. The share was sold at the same time to another collector, and Mr McEnroe never recouped the money, authorities said.

Several paintings by Mr De Niro's father were sold without the actor's permission, prosecutors said.

"Lawrence Salander's desire for an extravagant lifestyle turned long-time friends and trusted business colleagues into his personal piggy banks," Manhattan District Attorney Cyrus Vance said in a statement.

Justice Michael Obus said that under the plea agreement, Mr Salander's sentence would be lighter than the 25 years in prison he could have faced if he had been convicted.

In court, Mr Salander, the former owner of Salander-O'Reilly Galleries, wore an ill-fitting gray suit, had trouble speaking and appeared haggard.

"I did everything I have described knowingly and intentionally," he told the court.

Mr Salander's attorney, Charles Ross, said Mr Salander's infirm appearance was due to a stroke, but defense attorneys raised the issue of his alcoholism and urged that special conditions be placed on his bail. The judge denied the request.

Mr Salander is due back in court on May 20 for proceedings regarding the restitution.

Other victims included Earl Davis, son of American abstract painter Stuart Davis, who lost $6.7 million; Bank of America, which lost $2 million after Mr Salander lied about paintings he owned to secure a loan; and Hester Diamond, the widow of the late New York art dealer Harold Diamond and mother of Beastie Boys' Mike D, who lost $6 million, authorities said.