Hillel “Helly” Nahmad, owner of the Helly Nahmad Gallery located in Manhattan’s glamorous Carlyle Hotel, is one of thirty-four people indicted for playing a role in an extensive gambling and money-laundering scheme that stretched from Russia to the United States. On Tuesday, April 16, FBI agents filled the gallery, conducting a raid that began at 7:30am. The windows were covered up with brown paper and a sign with the words “We are closed for renovation, please ring the bell or call.”
According to the indictment, Helly was one of the leaders of a “high-stakes illegal gambling business run out of New York City and Los Angeles that catered primarily to multimillionaire and billionaire clients,” laundering over $100 million in gambling money. Nahmad is also facing charges that he helped fund this international operation, wiring over $1 million from his father’s Swiss bank account to an American account to help finance the gambling operation. He is also facing an additional charge of fraud, selling a painting worth $50,000 for $300,000. The indictment also names Molly Bloom, infamous for her role in arranging high-stakes games for celebrities, including Tobey Maguire, Leonardo DiCaprio, Matt Damon, and Ben Affleck (though authorities have not commented on whether these games were part of the subject of the indictment). Prosecutors also named Alimzahn Tokhtakhounov as the leader of the Russian group, overseeing money-laundering generated by sport-betting operations in the former Soviet Union that served Russian oligarchs. Mr. Tokhtakhounov was also infamously accused of working with unidentified members of a Russian crime gang and skating officials to rig the Olympics in 2002. That indictment alleged that he helped secure a gold medal for Russia in the pairs event in exchange for a victory for the French ice dancing team, though he never stood trial.
The unfolding story is the stuff of movies, from Russian mobsters purchasing Olympic victories to high-stakes poker games filled with celebrities. The scandal is of particular interest to those in the art world, as Helly is heir to an art-dealing clan known for their incomparable cash of Impressionist and Modern works and their aggressive buying and selling tactics.
The Nahmad family fortune began two generations ago. Hillel Nahmad, Helly’s grandfather, was a successful banker from Aleppo, Syria in the 1950s. Two of Hillel’s sons, David (Helly’s father) and Ezra, began buying and selling Impressionist and Modern art in the 1960s. They would travel to Paris, pick up works by Chagall, Picasso, and Miro in Paris, then sell them in the burgeoning market in Milan for 50% and 100% profit. The brothers also began to cultivate relationships with famous dealers and billionaire art collectors. In the 1970s, the brothers expanded their travels, trading works in auction houses and galleries in Europe, New York, Los Angeles, Sao Paulo, and Buenos Aires. In the 1980s, the family expanded to the business to Japan, capitalizing on the speculative art boom there. According to Forbes, the Nahmads amassed so much cash selling to the Japanese during the 1980s that wen the art crash hit in 1989, they kept purchasing at incredibly reduced rates to boost their inventory.
Today, the family’s wealth, inventory of paintings, and influence in the art world is unmatched. The Nahmads own an estimated 300 Picassos worth $900 million and 4,500-5,000 other works by great Impressionist and Modern artists, from Monet to Miro, estimated to be worth between $3-4 billion. Forbes estimated that David is personally worth $1.75 billion (as of March) and the family’s collective wealth is estimated at $3 billion. Christopher Burge, formerly of Christie’s, has said that “the Nahmads have sold more works of art than anybody alive.” In fact, the Nahmad inventory of Impressionist and Modern works is so extensive that is it nearly impossible to find anyone who deals in this period who has not had to deal with the family at some point.
The Nahmad successes may attributed to several factors, according to the Forbes “The Art of the Deal” article written about the family in 2007. By day, David Nahmad trades millions of dollars in currencies and commodities and enjoys betting hundreds of thousands of dollars on backgammon in Monte Carlo, but he is much more risk-averse when it comes to art. He dismisses artists such as Jeff Koons and Richard Prince as “speculative,” preferring to purchase works of artists who have made art history and for whose works Nahmad knows he will see a profit. He told Forbes in 2007, “Monet and Picasso are like Microsoft and Coca-Cola… We know the return is less big than on contemporary painting, but at least it’s more secure.” With the exception of Helly’s gallery and the gallery of his cousin (also named Hillel) in London, the Nahmads also usually sell through auction houses, an uncommon practice among dealers. However, this has allowed them to externalize the efforts and costs of setting up the sale to Christie’s or Sotheby’s. Their approach to buying and selling art has also been likened to a “major brokerage firm in the stock market,” operating as secondary-market merchants, rather than great patrons of the arts. Their allegedly loud and crass style, including arguing in the galleries and changing deals at the last minute, have given them a sometimes unflattering image in the genteel art world.
Helly has been operating his gallery at the Carlyle since the late 1990s, and it is not his first brush with legal troubles. Two years ago, he made headlines when the grandson of a Jewish art dealer sued him, seeking the return of a $25 million Modigliani painting allegedly stolen during World War II. Helly has been characterized as a billionaire playboy, fraternizing with celebrities and models.
It remains to be seen what will come of the allegations. But given the wealth, influence, and notoriety of Helly Nahmad’s family, this story is unlikely to fade from public attention.