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Russian Oligarch’s Legal Battle Against Sotheby’s Alleged $1 Billion Overcharge

A Russian oligarch, reportedly worth more than $6 billion, is pursuing legal action against Sotheby’s. He contends that the prestigious auction house played a role in a deception orchestrated by his art dealer, resulting in the purchase of over a dozen rare artworks at a staggering $1 billion premium over their actual value. Dmitry Rybolovlev, the affluent party involved, amassed his wealth as the leader of the Russian fertilizer producer Uralkali. Court documents reveal his allegation of being defrauded by Yves Bouvier, the art dealer who facilitated the acquisition of 38 artworks over a span of 12 years, totaling approximately $2 billion.

From 2002 to 2014, Bouvier played a role in helping the Russian businessman curate an art collection boasting timeless masterpieces, including a Christ portrayal attributed to Leonardo da Vinci, and creations by Gustav Klimt, Rene Magritte, and Amedeo Modigliani. However, their association took a downturn when an art adviser revealed to Rybolovlev that he had substantially overpaid for a Modigliani painting.

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Bouvier purportedly positioned himself to Rybolovlev as a mediator facilitating the sale between the oligarch and the sculpture’s owner. Contrarily, the lawsuit alleges that Bouvier was, in fact, the owner who sold the piece at an inflated price.

Dmitry Rybolovlev, a Russian oligarch reportedly worth billions, has filed a lawsuit against Sotheby’s auction house. In 2013, Rybolovlev purchased Leonardo da Vinci’s “Christ as Salvator Mundi” for $127.5 million, influenced by Bouvier, who took a 1% commission, as per court documents. Rybolovlev claims that Bouvier acquired the artwork for $83 million and artificially inflated the price. Notably, the da Vinci piece holds the record as the most expensive painting ever sold at auction.

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In 2017, Saudi Prince Badr bin Abdullah Al Saud acquired it for $450 million at a Christie’s auction in Manhattan. In the same lawsuit, Rybolovlev claimed that in 2013, he paid Bouvier $83 million for “Tête,” a sculpture by Amedeo Modigliani, despite Bouvier having purchased the statue just months earlier for half that amount.

Sotheby’s faces accusations of aiding fraudulent art sales, a claim the auction house vehemently denies. Two years prior, Bouvier was entrusted with procuring Modigliani’s renowned painting “Nu Couché au Coussin Bleu” on behalf of Rybolovlev, as per the lawsuit.

According to the complaint, Rybolovlev alleges that Bouvier purchased the painting for $95 million and subsequently sold it to him for $118 million. Bouvier is then accused of funneling a $5 million kickback to Tania Rappo, the godmother of one of Rybolovlev’s daughters. Rappo, allegedly working in collaboration with the Swiss art dealer, assisted in acquiring artworks for the Russian businessman without his knowledge.

In total, Bouvier is alleged to have surreptitiously inflated the prices of 15 artworks, amounting to over $1 billion in dealings with Rybolovlev.

The lawsuit against Sotheby’s is slated for a federal trial in Manhattan next week. Sotheby’s staunchly maintains adherence to all legal requirements, financial obligations, and industry best practices during the art transactions. The auction house denies any awareness of the alleged misconduct or intention to defraud Rybolovlev.

Yves Bouvier maintains his innocence, asserting that he did not engage in any wrongdoing. According to Bouvier, Rybolovlev was aware that he functioned as both an art dealer and an adviser in their numerous transactions.

Rybolovlev’s attorney, Daniel Kornstein, expresses his client’s anticipation for the trial, emphasizing that it will be the first time all evidence is presented. Kornstein notes that this trial will provide a detailed account of the truth about the case and shed light on the operations of the art market.

While Bouvier is not named as a defendant in the lawsuit, he has refuted the allegations. Rybolovlev has pursued legal action against Bouvier in various global jurisdictions, resulting in a settlement last year.

Despite the U.S. Treasury Department characterizing Rybolovlev as an oligarch with close ties to the Russian regime, he has thus far evaded sanctions imposed after the Ukraine invasion in February 2022. Rybolovlev’s lawsuit seeks to expose Sotheby’s alleged complicity in facilitating fraudulent art sales, a claim that the auction house denies adamantly.

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Russian Oligarch Sues Sotheby, Alleging Art Dealer’s Deceptive Overcharging

Dmitry Rybolovlev in the stands during an AS Monaco football match. Rybolovlev owns the club

A Russian oligarch is set to accuse Sotheby’s this week of aiding an art dealer in a scheme that allegedly led him to overpay for art masterpieces, including the renowned Leonardo da Vinci’s Salvator Mundi, which became the most expensive artwork ever sold.

Dmitry Rybolovlev, ranked as the world’s 180th richest person with an estimated fortune of £9bn ($11.4bn), is filing a lawsuit against Sotheby’s in New York, asserting that the British auction house inflated the estimated value of artworks he had intended to purchase. The collection includes pieces by Gustav Klimt, Amedeo Modigliani, and René Magritte.

The 57-year-old oligarch, who amassed his wealth through the sale of Russian potash fertilizer producers and acquired Donald Trump’s Florida beachfront mansion for $95m in 2008, spent approximately $2bn on what he described as a “world-class art collection.” This collection featured works by Leonardo, Henri de Toulouse-Lautrec, and Henri Matisse between 2002 and 2014.

However, a New York judge overseeing the case revealed that Rybolovlev and his advisers later discovered that Yves Bouvier, an art broker involved in the acquisitions, had deceived them by purchasing the works himself at one price and charging them another, often in the millions or tens of millions of dollars higher.

Rybolovlev took legal action against Bouvier in multiple countries, accusing him of misleading him over the value of 38 artworks worth €1bn. The claims were settled out of court last month.

Now, Rybolovlev is suing Sotheby’s, alleging that the auction house “aided and abetted Bouvier in committing fraud and breaching his fiduciary duties.” Sotheby’s denies these claims. Despite this, in March 2023, US district court judge Jesse Furman ruled that Sotheby’s must face fraud-related claims on the sales of four specific works, including Salvador Mundi, Tête, Wasserschlangen II, and Le Domaine d’Arnheim.

The trial is set to commence in Manhattan federal court on Monday. A spokesperson for Sotheby’s stated, “Sotheby’s strictly adhered to all legal requirements, financial obligations, and industry best practices during the transactions of these artworks. Any suggestion that Sotheby’s was aware of the buyer’s alleged misconduct or intention to defraud Mr Rybolovlev is false.” Bouvier is not a party to the ongoing litigation.

Rybolovlev sold Salvator Mundi for $450m at a Christie’s auction in 2017, making it the most expensive painting ever sold. The buyer was Mohammed bin Salman, the crown prince of Saudi Arabia. Although initially planned as the star attraction in a new Louvre gallery in Abu Dhabi, the painting has yet to go on display due to authenticity concerns raised by experts.

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