Gallery Owner Stole $88M From Investors,Clients
The former co-owner of a defunct Manhattan art gallery has been charged in a 100-count indictment with stealing $88 million from investors, art owners and Bank of America Corp, state prosecutors said.
In a statement, Manhattan District Attorney Robert M. Morgenthau said Lawrence B. Salander, the one-time co-owner and manager of Salander-O'Reilly Galleries LLC, and the gallery have been charged with grand larceny, securities fraud, forgery, falsifying business records and other charges.
Salander, who co-founded the gallery in 1976 and ran its day-to-day operations until it closed in November 2007, faces up to 25 years in prison on the grand larceny charges. The gallery closed in 2007 as a result of an involuntary Chapter 7 bankruptcy filing, Morgenthau said.
Morgenthau said Salander, 59 years old, allegedly defrauded 26 victims out of millions of dollars by selling artwork he didn't own and keeping the money and luring people to invest in fraudulent ownership interests involving works of art.
Salander applied for a personal loan from Bank of America for he and his wife, offering certain artwork as security, Morgenthau said. Several of the pieces were never owned by Salander or his wife, but were owned by other individuals, including retired tennis legend John McEnroe.
As a result, Salander was able to obtain a $2 million loan, Morgenthau said.
Salander used the stolen funds to finance his "mission to corner the market in Renaissance Art" and to support his extravagant lifestyle, including travel on private jets, a lavish party for his wife at the Frick Collection in New York and to purchase a Manhattan townhouse and a 66-acre estate in Millbrook, N.Y., Morgenthau said.
-By Chad Bray, chad.bray@dowjones.com
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