Russian Oligarch who says he was cheated testifies at art fraud trial

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Russian Oligarch who says he was cheated testifies at art fraud trial
The Russian billionaire Dmitry Rybolovlev looks out from his penthouse in Monte Carlo, Monaco, Sept. 18, 2018. (Benjamin Bechet/The New York Times)

by Colin Moynihan



NEW YORK, NY.- As the owner of Monaco’s beloved soccer team, Dmitry Rybolovlev, who is often photographed at matches, has hardly kept a low profile. Yet his appearance on Thursday when he took the witness stand in Manhattan was still rare: a Russian oligarch seeking justice in an American courtroom.

Rybolovlev was in court to pursue his long-standing civil claims that Sotheby’s had helped a Swiss art dealer trick him into overpaying by tens of millions of dollars in art purchases. In two hours of testimony, he responded to questions put to him by one of his lawyers, outlining some transactions over more than a decade with the dealer, Yves Bouvier.

In taking the stand to provide his version of events, Rybolovlev has opened himself to cross-examination by lawyers for Sotheby’s, one of whom is expected to question him Friday about a range of issues, although not about his status as an oligarch.

In a pretrial motion Rybolovlev’s lawyers asked the judge overseeing the case to bar Sotheby’s from using the term, calling it a “pejorative” slur. Sotheby’s responded that it had no intention of using that word and the judge, Jesse M. Furman of U.S. District Court, deemed the matter moot.

Sotheby’s has strongly insisted in court and in court papers that it did nothing wrong and that whatever overpayments Rybolovlev might have made were not the product of the auction house’s conduct, but were attributable to his own lax efforts to research the sales.

On Thursday, Rybolovlev testified in a barely audible monotone, occasionally becoming more animated when answering questions about Bouvier or a Sotheby’s executive, Samuel Valette, who he says assisted Bouvier in deceiving him.

Speaking in Russian, which was translated in the courtroom, Rybolovlev described growing up in central Russia while it was still part of the Soviet Union, studying medicine and then becoming interested in business, eventually using “operations and maneuvers” to gain a controlling interest in a company that produced fertilizer.

Rybolovlev, who testified that he left Russia with his family in 1995 to live in Switzerland, touched on the success he met as a businessman but did not fully outline the wealth he now enjoys, which has led Forbes to list him at No. 397 on its 2023 billionaires list. Years ago, he paid $88 million for a Central Park West penthouse where he shopped for at least one of the four blue-chip artworks at the center of the Sotheby’s case.

That painting, the “Salvator Mundi” by Leonardo da Vinci, cost him $127.5 million in 2013. Bouvier, the dealer, had purchased the work for $83 million through Sotheby’s the day before selling it to Rybolovlev.

Rybolovlev is arguing in his suit that Bouvier manipulated him into paying too much for that work and others by quietly buying them before pretending, as his adviser, in several cases to negotiate on his behalf with phantom third parties. Overall he spent some $2 billion on 38 works he purchased through Bouvier, although only 12 were transactions in which Sotheby’s had any role.

Bouvier, who is not a defendant in the case, has said that it was clear he was operating as an independent dealer, free to charge what the market would bear.

During his testimony Thursday, Rybolovlev described how his interest in art came almost accidentally, “through electricity and light bulbs.” He said that when he moved into a house in Geneva whose previous owner was a collector, he found it came with extensive lighting that had once illuminated artworks on its walls.

“I had to either get something on the wall,” Rybolovlev said. “Or I had to change something with the house.”

His first major purchase, a Chagall, came in 2002, and he met Bouvier that year while viewing the work in a facility that the Swiss dealer owned.

Not long afterward, Rybolovlev testified, Bouvier sent him a letter and met with him, offering his services with future art purchases, saying that he had connections in that world.

“He will act in our best interest and search for artwork for the best price,” Rybolovlev said, describing the arrangement he agreed upon with Bouvier, adding: “He demanded that confidentiality exist.”

According to Rybolovlev’s lawyers, Bouvier exploited that confidentiality to commit massive fraud, purchasing dozens of masterpieces that Rybolovlev had expressed an interest in for one price, and then flipping them to Rybolovlev at a steep increase.

Along the way, Rybolovlev testified, Bouvier earned his trust and a place in his “circle of friends.” Bouvier attended soccer matches with him, he said, as an example, and was one of a select few who attended birthday parties for him in New York and Hawaii. But Bouvier was also territorial, Rybolovlev testified, and became upset when he had a meeting with well-known gallerist Larry Gagosian. “Bouvier was very unhappy about that,” Rybolovlev said.

Rybolovlev and Bouvier recently ended years of legal disputes with a confidential settlement in Geneva, but the Russian billionaire continued his legal fight with Sotheby’s, saying the auction house provided inflated appraisals and left Bouvier’s name out of transaction histories. The auction house has said that it followed industry norms and good business practices in the transactions it had with Bouvier.

On Thursday, Rybolovlev testified that Valette, the Sotheby’s executive, had influenced some of his art purchases.

For example, Rybolovlev said, he was not sure that he wanted to buy a Amedeo Modigliani sculpture, Tête, saying he “didn’t really like it,” and adding: “I also had my doubts about the price.”

But he said that Bouvier convinced him by producing “specific documents,” which included an opinion by Valette that the work was worth 80 million to 100 million euros.

Rybolovlev testified that he met Valette in 2012 while viewing a work by Gustav Klimt that he also bought through Bouvier. The Sotheby’s executive “explained it was a masterpiece, it was unique,” Rybolovlev testified.

Asked whether that analysis had influenced his decision to buy the work, Rybolovlev replied that it had.

“When an expert tells you it’s fantastic, unique, one of a kind,” he testified. “You inevitably absorb that information.”

This article originally appeared in The New York Times.










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