Lisa Schiff, an art adviser with deep connections to the upper echelons of the market, will now face a second lawsuit that alleges she defrauded a collector in the sales of artworks collectively worth millions of dollars.
Meanwhile, on Monday, Douglas J. Pick, a lawyer who specializes in bankruptcy, was assigned “for the business of winding up” SFA Advisory, Schiff’s New York–based firm. ARTnews reported on Tuesday that the firm, which also operates a gallery, appeared to have shuttered to the public.
In the new suit, Candace Carmel Barasch and her husband Michael claim that Schiff and SFA Advisory had redirected money earmarked for the purchases of artworks. Doing so, they allege, was a way “to fund Schiff’s lavish lifestyle, cover debts Defendants owed to other clients, or to consummate art purchases for other clients of Defendants.”
The Barasches allege that they remitted $6.6 million to Schiff and that, in multiple cases, they did not receive artworks from blue-chip galleries because Schiff and her firm had not transferred the funds as expected. Instead, Schiff and SFA used the money to “spoil themselves with luxury travel, shopping sprees, and the like, or to pay obligations owed to other clients, or to purchase artworks for other clients,” the lawsuit alleges.
The suit, filed on Wednesday in the Supreme Court of New York, is the second one that Barasch has filed against Schiff and her New York–based advisory. The first, from last week, named Richard Grossman as co-plaintiff and concerns alleged fraud by Schiff during the private sale of a $2.5 million Adrian Ghenie painting at Sotheby’s. Barasch and Grossman accuse Schiff of still owing them $1.8 million.
In the new suit, the Barasches, who have ranked on the ARTnews Top 200 Collectors list, claim that their relationship with Schiff came apart amid financial strife on the advisor’s part, marking a dramatic end to Candace’s close friendship with her.
According to the suit, Schiff admitted earlier this month to Candace that funds sent for the purchases of artworks had not been used to that effect.
The lawsuit reads, “On the morning of Monday, May 8, 2023, Schiff (who Candace has spoken with every day, multiple times a day, for many years) called Candace and admitted that monies which Plaintiffs had wired to Defendants for the purchase of artworks was gone; that Defendants had dug themselves into a large financial hole that they could not get out of; that this had been going on for many years; and that Schiff had considered filing for bankruptcy prior to the start of the COVID-19 pandemic, but did not do so because she was afraid of a criminal investigation.
“Schiff explained that she had intended to map out a plan to get Defendants out of this financial hole during her stay in a rehabilitation center in San Francisco, that she went to in January 2020 to treat an addiction,” it continues. “(She also mentioned that rehab cost over $100,000).”
The suit lays out an array of instances in which Schiff had allegedly not directed funds from the Barasches to blue-chip galleries for intended purchases. In some cases, Candace learned that the galleries had not received the money. In others, the gallery followed up with her, allegedly seeking unpaid sums.
According to the suit, in their May 8 conversation, Schiff admitted that she had not used Candace’s money to pay for a $390,000 Sarah Lucas sculpture from 2018 titled CASANOVA. That work was being sold by the New York–based Gladstone Gallery in 2020. In the lawsuit, the Barasches say that Candace followed up with the gallery and discovered that no money had been received.
That same gallery is said in the suit to have sold the Wangechi Mutu sculpture The Seated IV (2019), one of the pieces initially produced for the Metropolitan Museum of Art’s façade, for $650,000 in 2020. (A similar work appears in Mutu’s current New Museum survey.) When Candace followed up with Max Falkenstein, a senior partner at Gladstone, he allegedly told her that she still owed $252,000.
A range of other, similar sales with different galleries are also outlined in the suit—and the Barasches claim that they are not the only ones who experienced this. Claiming that they have “little to no chance of recovering the millions of dollars,” the Barasches are now seeking an injunction to be placed on Schiff.
Schiff’s legal representative did not respond to request for comment.
Her ‘Partner in Crime’
In the profiles of Schiff that have appeared in the media in recent years, she has described the market as an opaque space that she has been able to penetrate—and even make more transparent to others. A secondary figure in some of those stories was Candace Barasch, whom Schiff once described as her “partner in crime” in a New York Times profile. That profile also noted that the actor Leonardo DiCaprio has formerly been among Schiff’s clients.
Barasch states in the lawsuit that she and Schiff had been friends since roughly 2004. “Virtually immediately after Schiff and Candace met,” the suit says, “Schiff began cultivating a personal friendship with Candace which transcended their business relationship, to the point that Candace and her family considered Schiff like a member of the family.”
The two acted on a “continuing oral agreement,” the suit states. The Barasches “generally did not communicate directly with the artists and galleries (unless/until Candace visited them to see particular works), and would not know if something was amiss.” Instead, they left most of that work to Schiff.
“For more than a decade,” the suit goes on, “it appeared that Defendants faithfully did so – apparently, they didn’t.”
Allegations of Fraud
The Barasches are now alleging that sales Schiff was supposed to have been facilitating did not go as planned because of how the money was handled. These transactions involved works by well-known artists and up-and-coming talents, with their values sometimes set at well over $100,000 each, and were done through galleries of significant stature in the international scene.
Of all the works listed in the lawsuit, the most expensive is an unnamed Ernie Barnes painting that was being sold by New York’s Andrew Kreps Gallery, allegedly for $650,000. Because the sale appears to have been set up in November of last year, it came as Barnes’s market was red-hot following a surprise success at auction. Candace had wired $50,000 to Schiff, but Schiff had never paid out the deposit to Andrew Kreps Gallery, so the sale was canceled. Candace never got back the deposit money, according to the suit.
The New York gallery 47 Canal seems to have sold the Barasches Anicka Yi’s Kn£M§†R (2023), part of a recent series of paintings generated with the help of AI. Candace had wired $190,531.23 to Schiff Fine Art’s bank account, only to find out, according to the suit, that Schiff never paid the gallery.
Lauren Halsey’s RIMS “N” THANGS (2023) was up for sale by David Kordansky Gallery for $110,000, a sum that included Schiff’s 10 percent commission. The gallery, which has spaces in Los Angeles and New York, allegedly told Candace that it had not received the money either.
Alvaro Barrington’s Brazil (2021) was sold to the Barasches for just under $180,000 by London’s Sadie Coles HQ in 2022. The next year, the suit claims, Candace came to understand from the gallery that Schiff hadn’t paid out those funds either.
Other lower-tier transactions involved a $32,100 work by Andrea Bowers from Kauffman Repetto, a $48,000 Hayv Kahraman painting from Pilar Corrias, an $80,000 Mindy Shapero work from Nino Maier, four $25,000 paintings by Adrian Berg from Frestonian Gallery, Hadi Falapisheh artworks from Andrew Kreps Gallery worth $70,000, and a $10,000 Lewis Hammond painting from 47 Canal.
In at least one case, a transaction seems to have been successful—with a snare at the end. Candace had agreed to buy a Harminder Judge painting from Pace Gallery for just over $45,000, and the suit notes that the gallery did receive the payment, but Pace “is now unable to release” the work. “As the Gallery explained to Candace,” the suit says, “because the invoice for the Judge artwork was put in the name of Schiff Fine Art, Pace would need Schiff’s consent and full release in order to deliver the work to Candace.”
Wendy Lindstrom, a lawyer for the Barasches, hinted that there are possibly others who have faced similar situations with Schiff. In a statement, Lindstrom said, “Unfortunately, as the fraud is uncovered we are seeing a ripple effect throughout the art world. The victims appear to be widespread – artists, galleries and collectors.”
Update, 5/17/23, 7:05 p.m.: This portion of this article regarding SFA Advisory’s current state has been clarified. Although filed as a Notice of Bankruptcy, the document that entered the court system on Monday only designates Pick as the person assigned to aid in the firm’s affairs. SFA Advisory has not filed documents in bankruptcy court.