London based art dealers Simon Dickinson Ltd have been sued for refusing to reveal certain classified information in relation to the fraudulent sale of an oil painting. In a ruling on 22nd September 2020, the UK High Court refuted the London-based art dealer’s argument that the art world custom of buyer-seller secrecy precluded them from disclosing information to a court of law. London based art dealers Simon Dickinson Ltd have been sued for refusing to reveal certain classified information in relation to the fraudulent sale of an oil painting. In a ruling on 22nd September 2020, the UK High Court refuted the London-based art dealer’s argument that the art world…
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Sotheby’s Motions for Dismissal of New York Attorney General’s Tax Fraud Complaint
Sotheby’s has launched its rebuttal against New York’s Attorney General in the state’s Supreme Court after the NY AG filed a complaint against the auction house for “fraudulent avoidance of sales tax“. The 27-page memo seeks to dismiss the complaint – using a plethora of case law and statute – arguing that NYC AG Letitia James “fails to allege facts constituting a violation of tax law at Sotheby’s” and therefore cannot establish a violation of the New York False Claims Act (“FCA”). And while things are just starting to heat up, the client in all of this remains unidentified, despite recent art world speculation. Last November, AG James accused Sotheby’s…
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What New York Art Collective MSCHF’s Destruction of a $30,000 Damien Hirst Taught Us About Artist’s Moral Rights
MSCHF, the outlandish New York art collective, have done it again. And if – by ‘it’ – you guessed ‘severing’ a limited edition Damien Hirst ‘Spot Painting’ print and reselling its collective 88 pieces for nearly twice the total amount – you wouldn’t be far off. Because they’ve sold what’s left of the painting too. Hirst’s ‘L-Isoleucine T-Butyl Ester’ (2018) from the ‘Spot Prints’ Edition series – acquired by the $11.5 million+ venture-backed creative studio for $30, 485 (£22,850) – was sliced into 88 dots and auctioned individually for $480-a-piece as MSCHF’s own creation, ‘88 Spots‘ (2020). The painting’s skeleton – a frame with 88 holes – was named exactly…
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The State of New York Has Sued Sotheby’s For Enabling Sales Tax Fraud
New York’s Attorney General, Letitia James, has filed a lawsuit against Sotheby’s in the state Supreme Court for enabling a major client of the auction house to evade taxes. According to court files, the client, a contemporary art collector who resides outside of the U.S. and runs a shipping business, illegally obtained tax exemption certificates on art purchases exceeding $27 million for five years. At the crux of the action is Sotheby’s alleged breach of its responsibility as a vendor under State Finance Law to collect and remit sales tax. In New York, anyone who purchases art for enjoyment in their New York home must pay a “sales tax” –…
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U.S. Government Urges Art and Luxury Goods Dealers to Develop Sanctions Compliance Programs
The U.S. art market is facing mounting scrutiny from the U.S. Treasury Department’s Office of Foreign Assets Control – (“USTD”) and (“OFAC”) respectively – over the adoption of regulatory compliance measures for businesses. Yesterday, OFAC issued an Advisory urging “galleries, museums, private art collectors, auction companies, agents, brokers, and other participants in the art market” to develop risk-based sanctions compliance programs in light of the high-value of works dealt with. As the Advisory posits, certain features of the market for high-value works make it attractive to those engaged in illicit financial activity, including a lack of transparency and a high degree of anonymity and confidentiality. These ‘certain features’ include established…
