Salander Faces Second Round of Charges

Salander Faces Second Round of Charges
In a second salvo against bankrupt art dealer Larry Salander and the Salander-O’Reilly Galleries of New York, Manhattan District Attorney Robert M. Morgenthau announced new charges and a second arrest of the 60-year-old dealer Tuesday.

The latest round of felony charges includes three counts of grand larceny in the first degree and one count of falsifying business records in the first degree. Potential sentencing includes up to 25 years in prison for the grand larceny and up to four years for the other charge.

In March a 100-count indictment was filed against the dealer accused him of stealing $88 million from 26 art world victims.

Salander’s former gallery director, Leigh Morse, 53, was also arrested in this latest round and indicted on charges of grand larceny and scheming to defraud a handful of prominent artist estates, according to statements released by Morgenthau's office. Among the alleged incidents was the May 2007 sale of two paintings by the late Robert De Niro Sr. to a client for $77,000, which Morse then pocketed in full. If proved guilty, she faces up to seven years on the single count of grand larceny and up to four years for the one count of scheming to defraud.

Both Salander and Morse entered not guilty pleas in New York State Supreme Court. Salander was released on continuing, fully secured $1 million bail that was made after his arrest in March. Morse was released from custody after posting a $75,000 bond. The arraignment of the Salander-O’Reilly Galleries, padlocked and shuttered since October 2007 on the orders of a New York state judge, was postponed because the gallery has no legal representation.

The most serious charges against Salander and his once lofty gallery, which was housed in a landmark palazzo on the Upper East Side, stem from the alleged theft of more than $1 million in art from each of the estates and foundations of figurative sculptors Elie Nadelman and Gaston Lachaise and painter Robert De Niro Sr., father of the famed actor, all of which took place over a 10-year period beginning in the mid-1990s.

The consigned works were sold or traded by the gallery, in some cases to pay back overdue bills. But the consignors were never paid the amounts owed them.

Both Lachaise and Nadelman are represented in the permanent collections of New York's Whitney Museum of American Art and the Museum of Modern Art. Major works such as Lachaise’s grandly scaled bronze female nude Floating Figure and Nadelman’s carved figure Seated Woman were part of Salander’s first-class art holdings.

According to the most recent indictment, the estates/foundations “owned a number of works either sold by the gallery without any notice, or sold without proper payment due to misrepresentations made by Salander as to the status of payments due the gallery.”

As to Morse’s culpability, the indictment states that “rather than communicate the truthful information to the respective estates, Morse intentionally misled them or failed to disclose the true status of their works.”

In April, the grand jury caught up with another former Salander director, Steven Harvey, who pleaded guilty to falsifying business records, also a felony, and agreed to pay restitution of $507,800 over a three-year period. If he makes good on his payments and doesn’t commit further crimes, Harvey won’t have to serve any jail time and the felony will be reduced to a misdemeanor, according to court records.

Salander and Morse, meanwhile, are due back in court on September 9 for the continuation of the criminal trial before New York State Supreme Court Justice Michael Obus.

During the late-morning press conference at Morgenthau's office in Manhattan, he had one piece of sage advice. “The moral of this case,” he said, “is be careful who you consign your art to.”

Judd Tully is Editor at Large of Art+Auction.