Disgraced art advisor Lisa Schiff pleads guilty to $6.5 million fraud

Art advisor Lisa Schiff, who advised celebrities and ultra-wealthy clients, pleaded guilty this morning in Manhattan federal court to one count of wire fraud before Judge Paul Oetken.

Schiff — wearing large blue-rimmed glasses, a beige jacket, black pants and black sneakers — looked somber as she was led in and out of the courtroom by U.S. Marshals.

Following questions from the judge about her understanding of the proceedings, Schiff read a brief prepared statement. She said that between 2018 and May 2023, she lied to clients about selling and purchasing artwork on their behalf and misused the proceeds from these transactions. She choked up and became emotional while reading. Afterwards, Judge Oetken asked her if she knew her actions were against the law. Schiff responded in the affirmative.

Schiff “defrauded at least 12 clients, an artist, the estate of another artist and a gallery, collectively, of at least approximately $6.5 million,” according to a press release from the U.S. Attorney for the Southern District from New York.

“For years,” U.S. Attorney Damian Williams said in a statement, “Lisa Schiff abused her art consulting clients’ trust by lying to them and misappropriating millions of dollars her clients entrusted to her . Instead of using client funds as promised, Schiff used the stolen money to fund a lavish lifestyle.

Schiff is currently free on $20,000 bail and is restricted to remaining in the Southern District of New York for the next three months; she will be sentenced on January 17. The maximum penalty for wire fraud is 20 years.

As part of her plea deal, Schiff agreed to guidelines with prosecutors that will ask the judge to sentence her to between 41 and 51 months. She must also pay restitution and forfeit $6.4 million, which represents the sum of the proceeds attributable to the fraud.

Judge Oetken emphasized in his remarks that his sentence will be determined by a wide range of factors, including the pre-sentencing report that will be submitted by the prosecution.

Before her guilty plea, Schiff responded to Judge Oetken’s questions about her mental health, saying she was under psychiatric care for drug addiction and had spent time in a rehabilitation center.

“This represents not an end but a beginning,” Schiff’s lawyer, Randy Zellin, said after the hearing. “Lisa accepts her responsibilities and this is a path forward to changing the trajectory of her life.” Zellin said he and Schiff were working to resolve related bankruptcy proceedings and to return artwork and funds to people harmed by his fraud.

Schiff has been a noted advisor and auction house expert for more than two decades and has developed a reputation as an astute market observer. In May 2023, she was sued by two former clients, real estate heiress Candace Barasch and attorney Richard Grossman, alleging that Schiff owed them a total of $1.8 million, or $900,000. each, linked to the sale of a painting by Adrian. Genius. That suit, filed in a New York court, included allegations of breach of contract, fraud and conspiracy, among other allegations.

Schiff quickly closed its SFA Advisory office and showroom in Tribeca, and soon after vacated its space at Cromwell Place in London.

Days after that first lawsuit, Barasch filed a second lawsuit against Schiff, claiming she owed at least $2.5 million plus interest and damages for a series of art purchases Schiff was supposed to facilitate and that she had never completed or only partially completed.

This second suit showed a pattern: Schiff would point Barasch to available paintings by contemporary artists in high demand in rising markets, obtain his permission to acquire them, accept full or partial payment, and then, in most cases , was unable to complete the process. purchases.

A few months later, in August 2023, Schiff filed for “voluntary liquidation” in New York. In the months that followed, his then-lawyer battled with a court-appointed overseer over control of assets such as cash and paintings, amid claims from creditors.

More than 200 works of art from Schiff’s inventory could be auctioned next month at Phillips as part of bankruptcy proceedings in New York, Artnet recently reported: