Art dealer sentenced to 7 years in $86m fraud scheme

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A London art dealer who deceived investors and then fled to a Pacific island was sentenced to seven years in prison on Monday by a federal judge in Manhattan.

The dealer, Inigo Philbrick, has been in police custody for almost two years, since his arrest in 2020 on the island of Vanuatu. That time spent in police custody will count toward his sentence, officials said.

Mr Philbrick pleaded guilty to wire fraud in November, agreeing to lose $86 million.

He was a fixture in the post-war and contemporary art world, traveling on private jets, renting villas in Ibiza and wearing handmade Italian suits.

An American citizen who attended Goldsmiths at the University of London, which offers a prestigious art program, Mr Philbrick opened a gallery and consultancy when he was in his twenties. Her father, Harry Philbrick, is the former director of the Aldrich Contemporary Art Museum in Ridgefield, Connecticut.

In describing his scheme, prosecutors said Mr. Philbrick sold a total of more than 100% ownership in a work of art to multiple investors; sold works of art or used them as collateral for loans without the knowledge of their co-owners; and provided “fraudulent” documents to “artificially inflate the value of works of art”.

“Inigo Philbrick grew his supposedly successful art business by collateralizing and reselling fractional shares in high-dollar contemporary art,” Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement released. Monday. “Unfortunately, his success was built on outright lies, including hidden ownership interests, forged documents, and even a made-up art collector.”

Federal guidelines called for a sentence of about 10 to 12 years, and prosecutors have asked for a substantial sentence. But a defense attorney, Jeffrey Lichtman, pleaded for clemency in a Manhattan courtroom on Monday as a crowd of Mr Philbrick supporters looked on from the gallery.

“We ask for mercy,” Mr. Lichtman told Judge Sidney H. Stein of the Manhattan District Court, saying Mr. Philbrick had “gone off the rails” but was no longer the same person who defrauded the investors.

Mr Philbrick, dressed in beige prison gear, told Judge Stein he felt deep shame and embarrassment over his actions and would work the rest of his life to restore the trust he had wasted and repay the debts he owed.

“I apologize without reservation or restraint,” he said, calling his conduct “scandalous and inexcusable.”

Judge Stein noted that Mr Philbrick had ‘great potential’ and ‘all the social connections’ but had still ‘engaged in this massive fraud’.

After handing down his sentence, Judge Stein urged Mr Philbrick to use his time in prison as “efficiently” as possible.

“There are a lot of things you can bring while you are incarcerated,” he said. “I wish you good luck.”

A moment later, just before being escorted out of the courtroom, Mr Philbrick lowered a face mask he was wearing, turned to his supporters in the gallery, held a hand to his chest then blew a kiss.

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