As an opening witness in a civil art fraud trial this week, Mikhail Sazonov testified that his employer, a Russian oligarch, had been tricked into overspending by a Swiss art dealer and that those margins had been boosted. by evaluations of works of art supplied by a Sotheby's house. executive.
But during questioning Wednesday, a lawyer for the auction house barely mentioned that employee, Samuel Valette. Instead, lawyer Sara Shudofsky described Sazonov and his boss, Dmitry Rybolovlev, a billionaire who made his fortune in the potash industry and owner of Monaco's soccer team, as overly gullible and negligent in reviewing their potash transactions. art.
The lawyer began her questioning by going through a litany of claims the Swiss trader, Yves Bouvier, had made in emails, all of which she described as false and some of which described negotiations with fictitious sellers that never took place.
“At the time of these email exchanges did you believe Mr. Bouvier's lies?” Shudofsky asked.
“That's right,” Sazonov replied.
Sotheby's is the defendant in the lawsuit, in Manhattan, which stems from the sale of some of the 38 works of art that Rybolovlev bought for more than $2 billion over several years with the help of Bouvier. A dozen of the sales involved Sotheby's, and the trial focuses on the sales of four specific works: a sculpture by Modigliani and paintings by da Vinci, Klimt and Magritte.
Rybolovlev has said he believed Bouvier, who is not accused in the case, was acting as a commissioning consultant, helping him obtain rare works of art at good prices. Bouvier has said that he was acting as an independent dealer, not solely as an advisor, and that he was free to charge whatever he wanted for a work.
What is indisputable is that Bouvier bought dozens of masterpieces in which Rybolovlev had expressed interest for one price and then sold them to Rybolovlev at a steep markup, at times claiming that he was haggling with a ghost seller.
Sotheby's has argued that it had no knowledge of any fraud and that Rybolovlev, a wealthy man with the assets to secure business experience and legal help, has only himself to blame for overpaying for the collection he built.
But Rybolovlev's lawyers have accused Sotheby's of helping Bouvier in a “stunning fraud,” saying Valette, a specialist in the sale of impressionist and modern art, provided inflated valuations and left Bouvier's name out of transaction histories. .
To bolster that claim, Rybolovlev's lawyers have cited the case of “Salvator Mundi,” a depiction of Christ by da Vinci, which in 2017 became the most expensive work ever sold at auction. In 2013, Bouvier bought the painting for $83 million and then sold it the next day to Rybolovlev for $127.5 million while pretending that he had negotiated with an anonymous owner whom he described as “a really tough customer.”
In 2015, when Rybolovlev was beginning to suspect him, Bouvier asked Sotheby's for an appraisal of the “Mundi.” Valette suggested to a colleague that they value the work at $125 million, but that person disagreed, according to court documents. The judge overseeing the trial, Jesse M. Furman of U.S. District Court, determined that Valette later asked his colleague to change the valuation to 100 million euros, or about $114 million.
Bouvier has repeatedly denied wrongdoing, and late last year he and Rybolovlev resolved years of legal disputes with a confidential settlement in Geneva.
The trial has sparked great interest, partly because of the early testimony of a Russian oligarch and partly because it provides a glimpse into the opaque world of international art sales.
Sazonov testified Tuesday about contracts for the first four sales arranged by Bouvier, which listed the sellers as companies in places such as the British Virgin Islands and Hong Kong. Although those companies were affiliated with Bouvier, Sazonov said he was not aware of this at the time of the purchases, believing rather that the works were being sold by third parties. He added that he eventually dispensed with formal contracts entirely after Bouvier said they slowed down his efforts to reach agreements.
On Wednesday, Shudofsky, Sotheby's lawyer, returned to that testimony and asked Sazonov whether a written agreement for the sale of a Picasso, which included Bouvier as the seller's representative, had “raised any alarms.” Sazonov said no.
Shudofsky later pressed Sazonov over the decision to forego contracts after the first four sales and instead accept invoices submitted by Bouvier for alleged art transactions. He also asked Sazonov whether any effort had been made to verify that the amounts paid had gone to actual third-party sellers.
Sazonov repeated several times that at the time of the sales he had not realized that Bouvier himself owned the artworks, suggesting that this explained why he had not done more to challenge them. But he gave a more direct answer when Shudofsky asked him if he regretted not asking for documentation of the transactions.
“I'm sorry, yes,” Sazonov replied.
