Doug Chrismas, a veteran Manhattan and Los Angeles art gallery owner, found himself in the middle of a $1 billion international fraud case last week after federal agents seized a $1.3 million Lichtenstein painting he sold last year – claiming title to the work of art was “free and clear.”
It turns out the 41-year-old painting, “Modern Painting With Yellow Interweave, 1967,” had been smuggled into the country by a Brazilian money launderer, Edemar Cid Ferreira, the former owner of Banco Santos.
Chrismas’ Ace Gallery — which sold the painting on consignment from Pacific Heights Gallery in San Francisco — did a background check on the painting and it came back clear, a source close to Ace Gallery said.
Ferreira, now serving a 21-year prison sentence for defrauding the bank and leaving it with $1 billion in debt, used some of the purloined loot to buy 29 works of art worth more than $100 million. The Lichtenstein is just the third piece to be recovered during a years-long international search by Interpol, US Customs and the FBI.
Paintings by Francis Picabia, Robert Rauschenberg, and Cy Twombly, along with sculptures by Henry Moore and Anish Kapoor, are still missing.
Earlier this year, “Hannibal,” an $8 million painting by Jean-Michel Basquiat, was discovered in a dusty Manhattan warehouse. Officials said it had been smuggled into New York at JFK Airport after a three-continent trip. Its cargo documentation identified it as a $100 painting.
Meanwhile, there are many questions surrounding Chrismas, who has hosted the likes of Jack Nicholson, Joe Pesci, Winona Ryder and Lauren Hutton at parties in his LA gallery, and how he came to possess the Lichtenstein.
Federal agents showed up July 8 at the LA home of the man who bought the Lichtenstein and seized the 56-inch by 48-inch masterpiece, according to sources close to the case.
The man, Seth Landsberg, an art investor, has sued Chrismas and his Ace Gallery, along with a second LA company and several unnamed persons, for selling him the pricey work of modern art – and claiming it was free and clear of any claims.
One week after buying the oil painting for $1.3 million, Chrismas’ Ace Gallery appraised it for $3.5 million. It was when Landsberg listed the painting for sale at Sotheby’s that alarm bells started to ring with the art police.
Chrismas established Ace Gallery in LA in 1961, and opened his 20,000 square foot Big Apple location, at 275 Hudson Street, in 1990. It was one of the largest galleries in New York until it closed in 2005.
UPDATE: After the sale to collector Seth Landsberg, a lien was discovered and the painting was handed over to federal authorities. The US government announced in 2010 that it was returning the painting, and others, to Brazil.
Chrismas, meanwhile was sued by Landsberg and eventually refunded the purchase price — even though he had long since handed the money over to Pacific Heights Gallery.
When Ace turned to the San Francisco gallery to recoup his losses, which had ballooned to nearly $2 million, including legal costs, a source said, Pacific Heights had filed Chapter 7 bankruptcy.
Ace was never able to recoup of dime of its losses, the source said.