Manhattan Art Dealer Faces Federal Prison Over Investor Scam

Bloomberg | Erik Larson

A Manhattan art dealer pleaded guilty to using paintings by Wassily Kandinsky and other renowned artists as bait to defraud collectors and investors out of millions of dollars. Ezra Chowaiki, who was the face of Chowaiki & Co. Fine Art Ltd. on Park Avenue before its bankruptcy filing in November, entered his plea Thursday in federal court in Manhattan. He agreed to forfeit $16 million and 25 works of art, including paintings by Pablo Picasso, Marc Chagall and Edgar Degas. Prosecutors said they plan to return the works to their rightful owners, though many of the paintings must be tracked down first. Some were transferred overseas, they said.

“I knew that what I was doing was wrong and illegal,” Chowaiki said, reading from a prepared statement while seated next to his lawyer. “I’m terribly sorry.” Chowaiki, 49, faces as long as 20 years in prison for wire fraud, though prosecutors have agreed to recommend a term of four to five years. U.S. District Judge Jed Rakoff accepted the plea deal after questioning how prosecutors could take possession of paintings whose whereabouts were unknown. He also pressed Chowaiki to explain what he’d done…read more

Image: A work by Wassily Kandinsky on display in London in 2012. Photographer: Peter Macdiarmid/Getty Images