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.
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.’”
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