The Leonardo da Vinci painting sold at auction for a record $450.3 million also figured in recent years in what may be the biggest art fraud scheme ever and what was called the biggest divorce settlement ever.
The seller, Russian oligarch Dmitry Rybolovlev, was the victim of the alleged fraud, so for him the remarkable $127.7 million profit over what he paid for the painting just four years ago represents a last laugh.
But some would say he deserved no laugh at all, for he purchased da Vinci’s “Salvator Mundi” as part of what court papers allege was a scheme to place $2 billion of his wealth beyond the reach of his then wife, Elena Rybolovlev, during a divorce proceeding.
ADVERTISEMENT
According to court documents, Dmitry and Elena first met as college students and were married in 1987. They had two daughters, Ekaterina and Anna.
In 2008, Elena filed for divorce, charging that her husband of 21 years had engaged in “serial infidelity.” She alleged that he would “share his young conquests with his friends and other oligarchs” during bacchanals aboard various yachts.
As described in court papers, Dmitry Rybolovlev sought to stash much of his money in various trusts through which he made numerous real estate purchases, some involving his daughter Ekaterina. The transactions included $88 million for an apartment in Manhattan and $11 million for Will Smith’s mansion in Hawaii and $18 million for a Palm Beach mansion owned by Donald Trump. The biggest real estate purchase was the island of Scorpios in Greece from the Onassis family, for some $150 million.
A considerably bigger sum went toward acquiring 38 masterworks of art through an offshore company called Xitrans set up with the assistance of Mossack Fonseca, the law firm of Panama Papers fame. The purchases were made through Yves Bouvier, a broker known as the “Freeport King” who specialized in tax-free transport and storage of art. Dmitry Rybolovlev is said to have met Bouvier a dozen years ago through Tania Rappo, godmother to one of his daughters.
“Rappo was considered a family member, which allowed her to foster Rybolovlev’s trust in Bouvier,” court papers say.
In May 2013, Rybolovlev paid $127.5 million to purchase da Vinci’s “Salvator Mundi” through Bouvier from a group of New York-based dealers. Rybolovlev had originally offered $100 million, but Bouvier emailed him that the dealers had rejected it “without a moment’s hesitation.”
As quoted in court papers, Bouvier further described the lead negotiator for the dealers in an email as “one tough nut.”
“But, I’ll fight as long as necessary,” Bouvier promised in the email.
Bouvier finally reported that the purchase had been “clinched at 127.5.”
“Terribly difficult, but it’s a very good deal with regard to this unique masterpiece by Leonardo,” Bouvier added.
All of which must have added to Rybolovlev’s surprise in November 2014, when he came upon an article in The New York Times reporting that Salvator Mundi had been sold by the dealers for “between $75 million and $80 million.” That was at least $52.5 million less than Rybolovlev had paid Bouvier as the supposed price.
“Rybolovlev confronted Bouvier with the New York Times article,” court papers say. “Bouvier claimed it was inaccurate.”
Rybolovlev concluded that Bouvier must have pocketed the difference. Rybolovlev was prompted to review the other purchases. He had paid $183.8 million after what Bouvier described as “hard fought negotiation” for Gustav Klimt’s “Wasserschlangen II (Water Serpents II).” Bouvier had in fact paid $112 million.
“Bouvier defrauded [Rybolovlev] of almost $72 million on this transaction,” court papers say. “Bouvier falsely claimed in one email exchange: ‘They’re holding back for 180 and are at the breaking point.’”
Rybolovlev had also purchased Mark Rothko’s “No. 6 (Violet, Green, and Red)” via Bouvier in 2014. Bouvier emailed that he had reached the price “after a long discussion and difficult negotiation,” adding that it was “a very good deal” at $180 million.
“When in fact he had secretly acquired the painting for less than half that price, defrauding [Rybolovlev] of approximately $100 million in the process,” court papers say.
All told, Rybolovlev had purchased 38 masterworks via Bouvier.
“At a cost in excess of $2 billion,” court papers note.
Bouvier had actually paid the sellers half that amount.
“That is, $1 billion instead of $2 billion,” the papers add.
The $1 billion difference would seem to comprise the biggest art fraud on record.
The papers allege that Bouvier kicked back to the Rybolovlev family friend Rappo some of the monumental skim.
“Bouvier was also secretly paying Rappo on each transaction for her efforts to maintain his fraudulent relationship with [Rybolovlev]” court papers say. “Over the years, these secret payments to Rappo totaled approximately $100 million… And the payments to Rappo were dwarfed by the sums that Bouvier secretly pocketed for himself by misrepresenting to [Rybolovlev] the purchase prices of the Works.”
The allegations are presently the subject of litigation in Monaco and Singapore and Britain. Bouvier and Rappo have both denied doing anything illegal or even untoward.
At the same time, Rybolovlev alleged plan to put much of his wealth beyond his ex-wife’s reach took a bad turn when a European court ordered him to pay her $4.8 billion, described in news reports as the “biggest divorce settlement in history.”
But Rybolovlev immediately appealed and the settlement was reduced to $600 million.
By some estimates, Rybolovlev was still worth more than $7 billion, so he was not in need of dough. But whatever actual passion he had for art was apparently diminished and he began to sell off some of his masterworks, almost necessarily at a loss considering how his broker had inflated what they cost him. He may well have expected to take a considerable hit when he put his da Vinci up for auction at Christie’s.
The painting’s provenance as prepared by Christie’s and detailed in court papers suggest that it was part of King Charles I until his execution in 1649. A posthumous inventory of the “Sale of the Late King’s Goods” makes mention of “A peece of Christ done by Leonardo at 30 sold to Stone a/o 23 Oct. 1651.”
The number 30 was apparently a reference to the sale in pounds sterling. A subsequent inventory of Stone’s belongings makes note of a “ pic. of Christ by Leanare.”
After the Restoration, Stone was obliged to return the painting to what became the collection of King Charles II.
“Leonard de Vince O.r Savior w.th a globe in one hand & holding up y.e other,” an inventory of the Royal Collection in the early 1660s reads.
After Charles II died 1685, the painting should have been inherited by the next on the throne, James II. It seems instead to have ended up in the hands of his son-in-law, John Sheffield, 1st Duke of Buckingham, the third Earl of Mulgrave as well the Marquis of Normandy and quite possibly a thief.
After the duke died in 1721, the painting was inherited by his son, Charles Sheffield, who subsequently sold the family’s residence to George II, who turned it into Buckingham Palace. Sheffield sold the duke’s art collection. The Feb. 24, 1763, auction included a painting described as “L. Da. Vinci... A Head of our Saviour” that went for two pounds sterling.
The trail went cold for 189 years, when the painting passed into the hands of Sir Francis Cook. It remained part of the Cook collection in London during the Blitz, but it was considered to be at most the work of one of da Vinci’s assistants—not among the paintings deemed to be of sufficient importance to be evacuated to one of Cook’s two country estates.
The London house suffered considerable bomb damage, but the painting escaped unscathed only to be consigned to auction with little expectation in 1958. It went for 45 pounds sterling to a person whose name was recorded only as “Kurz” and reappeared at a small estate sale in the United States in 2005.
A New York art dealer named Alexander Parish bought the painting for $10,000 and joined two colleagues in selling it eight years later for what The New York Times reported as between $75 million and $80 million to Bouvier, supposedly on Rybolovlev’s behalf.
Rybolovlev paid the $127.5 million and Bouvier apparently was at least $52.5 million richer, minus a kickback to the godmother.
Rybolovlev’s total $1 billion loss in all the transactions was somewhat offset after Christie’s preceded the auction of “Salvator Mundi” by hyping da Vinci as a brand, just as Trump is a brand, only highbrow.
The painting may be in iffy condition and it may be largely the work of a studio assistant and nobody can say it is rightly among the better of the artist’s works, but a da Vinci is still a da Vinci.
On Wednesday, “Salvator Mundi” went for an actual, astonishing $450.3 million.
And you could almost be glad Rybolovlev had the last laugh if he seemed deserving of any laugh at all.
But the new owners remain anonymous, and given the crazy ways of big money fine art among the global one percent, there may be more laughs yet to come.
