Art Dealer Convicted of Fraud

Leigh Morse, former Director of the Salander O’Reilly Galleries, was found guilty on April 6, 2011 of one count of scheming to defraud in the first degree. She was found not guilty of a second count of grand larceny. The trial was by jury in New York: People v. Morse, 09-03581, New York State Supreme Court, New York County (Manhattan).

The owner of the Salander-O’Reilly Galleries, Lawrence Salander, pleaded guilty last year to operating a $120 million art Ponzi scheme that involved 30 counts of grand larceny. Due to the onslaught of lawsuits brought by consignors demanding payment, the gallery was forced to close in 2007. Salander is currently serving a sentence in state prison.

Morse’s scheme to defraud involved the sale of more than 80 works of art from four estates without notifying owners. According to the NYT, this cheated artists out of approximately $5 million.

The larceny charges, for which Morse was ultimately acquitted, related to the mishandling of art belonging to Robert DeNiro’s father, now deceased. In mid-March, DeNiro took the stand to testify that proceeds from the sale of his father’s paintings were improperly deposited in Morse’s personal bank account. According to Bloomberg, most jurors decided this practice was lawful, because Morse would have been compensated for the sales eventually. However, it was a close call for the jury on this count, with one juror even stepping forward after trial to apologize to DeNiro

Scheming to defraud in the first degree carries up to four years in prison. Sentencing is set to take place on June 3, 2011.

“Because the art industry is largely unregulated, it is particularly important to hold accountable those who fraudulently handle works of art entrusted to them,” Manhattan District Attorney Cyrus Vance Jr. said in a statement after the verdict.

Read more at The New York Times and Bloomberg

One thought on “Art Dealer Convicted of Fraud

  1. From the Daily Mail story (no byline included) on 6th April 2011:"Juror Stanley Cohen told reporters that he had wanted to convict Leigh Morse, 54, the former director of the now defunct Salander-O'Reilly Galleries in New York, of grand larceny, after she allegedly pocketed $77,000 from the sale of paintings created by star Robert De Niro's father.Cohen said: 'Tell De Niro I'm sorry.' He added, 'I tried to get the conviction. It was hopeless.'Cohen said he eventually caved to the 'exhausting' and 'unbearable' bullying of several women on the jury, who allegedly resorted to name calling. One juror reportedly called Cohen 'a child.'Before Cohen gave in, the jury had been deadlocked at 11-1 in favour of acquittal.The gallery had been the sole handler for the paintings of Robert De Niro, Sr, who died in 1993. Robert De Niro the actor is the sole director of his father's estate.De Niro told the court that he was unaware his father's paintings had been sold in 2007, and that he had trusted the gallery 'to do the right thing.'Cohen called De Niro's presence in court 'charismatic.''I apologize to Mr. De Niro,' the juror added. 'I will see him in the movies.'The New York Post reports that jurors did convict disgraced director Leigh Morse of helping her boss — Lawrence Salander — defraud other art owners out of $120million, and she'll face up to four years in jail at sentencing.But as for De Niro's case, several female jurors were apparently convinced from the start that Morse might have figured her boss, Salander, would eventually pay the actor back.Says Cohen: 'How did she know Larry [Salander] would pay him back?' He added, 'His daddy didn't want anyone but his son to get that money. Stealing from a rich man is still a crime.'Prosecutors claimed Morse told a San Francisco gallery to wire $77,000 from the sale of two paintings by De Niro Sr. called Studio Interior With Guitar Case and Landscape With Pink Field, directly into her personal bank account.She never told De Niro about the sales, according to prosecutors, or paid him.Morse had been out on a $75,000 bond secured by her Riverside Drive apartment.Lawrence Salander was charged last year with stealing $88million from clients, investors and artists, including tennis legend and art collector John MacEnroe.Prosecutors called the case the biggest fraud scheme in local art industry history.

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