scammers

The Art World’s ‘Mini Madoff’ Has Been Arrested on an Island in the South Pacific

Photo: Stuart C. Wilson/2016 Getty Images

Inigo Philbrick, a well-connected young art dealer with a high-flying lifestyle who disappeared last year under allegations of, among other things, reselling the same piece of art to multiple buyers, was arrested Thursday in Vanuatu, an island nation in the South Pacific.

Philbrick, 33, faces charges of wire fraud and aggravated identity theft, for an alleged $20 million “scheme,” Manhattan federal prosecutors said Friday.

The Feds took Philbrick into custody after Vanuatu authorities “expelled” him from the country “at the request of the U.S. Embassy in Papua New Guinea in light of the charges in the Complaint.” He was then taken to Guam, where he is expected to appear in federal court on June 15.

According to the Manhattan U.S. Attorney’s Office, flight records revealed that Philbrick left the United States shortly before reporting on lawsuits against him went public. Vanuatu told U.S. law enforcement that he has been living there since around late October 2019.

Philbrick’s gallery, which was located in London’s posh Mayfair district, with a branch in Miami, dealt with blue-chip artists such as Rudolf Stingel, Christopher Wool, Wade Guyton, and Mark Bradford. His business model — one which had become increasingly common in the overheated art market of the last few years — sold works not only to individuals but also groups of collectors. The idea was to buy a piece at one price, betting that its value would then go up, and then flip it.

But his friend Kenny Schachter wrote in New York Magazine that he’d become a “mini-Madoff of the art world,” taking advantage of the lack of transparency of the art market — there is no centralized ownership database, and little regulation, despite the big money at stake. Investors may have difficulty verifying how much their dealers paid for artworks, allowing them to potentially overcharge them and “skim off the top.” And investors don’t really know whether the percentage of shares they bought is, in fact, the percentage of shares they hold.

One work Philbrick resold at Christie’s in 2019 for $5.5 million — a painting of Pablo Picasso by Rudolf Stingel, purchased for $6.7 million several years prior — was particularly problematic for Philbrick. Following the lackluster sale, one person claimed to hold 100 percent of this painting, but another two people claimed to each own 50 percent. This suggested that Philbrick “double-sold” the work, as the New York Times reported.

There were subsequent ownership disputes over art Philbrick had handled.

“It was a Ponzi-like scheme,” Judd Grossman, who’s representing one of Philbrick’s former clients, told the Times. Philbrick was apparently selling the same artwork more than once so he could get the money to pay for another.

Philbrick’s assets were frozen by a British court. He was sued by ex-clients in New York, Miami, and London. Philbrick vanished: He didn’t appear at court hearings related to some of this litigation. By late 2019, Philbrick’s Miami gallery shuttered. His Miami-based attorneys dropped him as a client. Reporters who tried contacting him for comment couldn’t, Bloomberg notes.

Philbrick also used bogus paperwork in his scheme, giving fraudulent contracts and records to investors, so he could “artificially” boost the value of art. One of these contracts listed a stolen identity as the seller, the Feds allege.

According to Schachter’s story, Philbrick remained unrepentant, DM-ing his onetime friend, “Ever heard of the phrase ‘token villain.’ Easy to have the young innocent guy as the scapegoat rather than the experienced pros who won’t make you popular if you castigate them.”

Update, June 16, 2020: Vulture phoned into Philbrick’s June 15 appearance in Guam federal court via telephone conference. During the proceeding, which took place just after 2 p.m. local time in Guam (midnight on the East Coast), a judge approved Philbrick’s transfer to New York City. It was revealed in court that Philbrick had been wearing “swim trunks” prior to his proceeding. His lawyer for the proceeding, John T. Gorman, explained in an email to Vulture: “Since his arrest he had been wearing the same clothes he was arrested in. For court today however, the [U.S. Marshals Service] provided him with a pair of pants. I will (out of my own pocket) buy him a pair of pants and a shirt or two.” Asked for comment on the case, Gorman said, “No comment on the allegations. We’ll save that for a court of law.”

Meanwhile, Schachter responded to news of Philbrick’s arrest in a June 16 column on Artnet. “Even though I’m personally out a small fortune, I can’t say I’m happy; yes, I was a little scared for my wellbeing — he made multiple veiled threats on my life, but more than anything it’s sad,” he wrote. “Sad, to be clear, that he hurt so many people — and no matter how you feel about well-off art speculators, they are people too (more or less) … It’s sad that my children got robbed of part of their inheritance … It’s also sad that such a bright and talented person would be blinded by greed and hubris and implode so spectacularly. It’s a shame, really.”