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Sunday, March 21, 2010

Art Dealer Pleads Guilty in $120 Million Fraud Case

A once-prominent art dealer pleaded guilty on Thursday to a $120 million fraud scheme, admitting he sold paintings he did not own and at least once sold fractional shares of a painting that added up to more than 100 percent.

“I am deeply ashamed and sorry for my actions,” the dealer, Lawrence B. Salander, 60, said after acknowledging that he had defrauded clients including the tennis star John McEnroe; Roy Lennox, a hedge fund manager; and Earl Davis, the son of the painter Stuart Davis.

Mr. Salander’s gallery, the Salander-O’Reilly Galleries, had occupied a town house on the Upper East Side, where it rented for $154,000 a month. It shut down in 2007. The gallery had displayed paintings as varied as English landscapes by John Constableand modernistic scenes by Robert De Niro Sr., the actor’s father, who died in 1993.

As Mr. Salander walked to the defense table in State Supreme Court in Manhattan on Thursday, he was steadied by his lawyer and another man. The lawyer, Charles A. Ross, told the judge, Justice Michael J. Obus, that Mr. Salander had had a stroke recently and had been hospitalized. Later, a prosecutor raised questions about Mr. Salander’s alcohol abuse.

Mr. Salander read an eight-page statement in a raspy voice, admitting to 29 charges of grand larceny and scheming to defraud investors. Among other things, he said he had bilked Mr. McEnroe out of about $2 million and the estate of Mr. De Niro out of more than $1 million.

more at http://www.nytimes.com/2010/03/19/nyregion/19salander.html

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