Lisa Schiff was one of New York’s most high-profile art advisers before she abruptly shut down her business last year amid allegations that she was running a Ponzi scheme. On Thursday (17 October), the Southern District of New York’s U.S. Attorney’s Office announced that Schiff had pleaded guilty to defrauding clients of her art advisory business out of around $6.5m. Schiff pleaded guilty to one count of wire fraud in connection with transactions involving around 55 works of art.
In 2018, Schiff began diverting clients’ funds—like money from the sale of their art, or payments they made to purchase works—to pay her own unrelated personal and business expenses, according to the Justice Department. Instead of handing over money to clients when she sold work on their behalf, she would not disclose the sales and also failed to follow through on purchasing works of art for her clients, instead pocketing their money.
The Justice Department says that between 2018 and 2023, Schiff defrauded at least 12 clients, an artist, the estate of another artist and a gallery out of at least $6.5m. By May 2023, Schiff’s debts had spun out of control, and she confessed her actions to several clients.
Last year, Schiff was served two separate lawsuits brought by former clients. The New York real-estate heiress Candace Carmel Barasch and the collector Richard Grossman alleged that Schiff owed them $1.8m from the sale of The Uncle 3 (2019) by Adrian Ghenie after Schiff brokered the sale of the painting at Sotheby’s Hong Kong in 2022. Barasch filed a second lawsuit against Schiff with her husband, Michael, alleging that they had given Schiff $6.6m to buy art that was instead diverted to fund the art adviser’s “lavish lifestyle”.
“Lisa Schiff attempted to paint a picture of a successful fine-art advisory business, when in reality—as she admitted today—it was actually a multimillion-dollar fraudulent scheme,” the FBI’s James E. Dennehy said in a statement. “After half a decade of deceit, Ms. Schiff will now be held accountable for her lies and duplicitous actions.”
Schiff will be sentenced in January. The wire-fraud charge carries a maximum of 20 years in prison. Under the terms of a plea deal, Schiff has agreed to forfeit approximately $6.4m. More than 200 works of art from Schiff’s collection are set to go up for auction at Phillips New York this autumn. The trove, featuring works by artists like Richard Prince and Damien Hirst, are estimated to fetch up to $2m. Schiff shuttered her business, SFA Advisory, in May 2023 and filed for bankruptcy in January of this year.