Art Dealer Pleads Guilty in Multimillion-Dollar Fraud Case
Posted May 4, 2018 4:28 p.m. EDT
NEW YORK — Ezra Chowaiki, a Manhattan art dealer who was accused of defrauding art collectors and dealers in December, has pleaded guilty to one count of wire fraud in the case.
Chowaiki acknowledged Thursday that he had made fraudulent agreements to buy and sell artwork through his Manhattan art gallery, the office of the U.S. attorney for the Southern District of New York said in a statement. Instead of honoring these agreements, he used the funds and artwork for unauthorized purposes.
Prosecutors say he fraudulently transferred more than $16 million of artwork between 2015 and 2017.
“As he admitted today in federal court, Ezra Chowaiki ran a multimillion-dollar fraud on art dealers and collectors around the country,” Geoffrey S. Berman, the U.S. attorney for the Southern District of New York, said in the statement. “In some instances, Chowaiki sold artwork, purportedly on consignment, without the owners’ authorization. In other instances, he took money from clients purportedly to purchase artwork, and kept the money but purchased no art.”
The victims of the fraud were not named, but court filings say they include art collectors in Toronto and Pennsylvania, and a company in the Cayman Islands managed by an art dealer who does business in Tokyo.
Chowaiki was ordered to forfeit $16,635,370, the amount traceable to the offense, and more than 20 works of art, including pieces by Picasso, Chagall and Degas.
On Dec. 15, 2017, Chowaiki was charged with one count of conspiracy to commit wire fraud, one count of wire fraud and one count of interstate transportation of stolen goods. He surrendered to authorities that day and was released on $100,000 bond. Chowaiki’s gallery, Chowaiki & Co. Fine Art, filed for bankruptcy in November 2017.
Sentencing is scheduled for Sept. 12.
The prosecution and defense have agreed to ask the judge for a sentence of between four years and three months and five years and three months, which is what sentencing guidelines recommend.
Chowaiki’s lawyer did not immediately respond to a request for comment Friday.