Tribeca Advisor Who Scammed Galleries, Auction Houses, and Collectors Sentenced to Prison
A Tribeca-based art advisor who pleaded guilty last fall to charges that she stole millions of dollars from wealthy clients has been sentenced to 30 months in federal prison, followed by two years of supervised release. She was also ordered to pay forfeiture of $6.4 million, along with restitution of $9.1 million.
Lisa Schiff (right), who lived in Tribeca and also operated an office there (as well as outposts in Los Angeles and London), opened her boutique advisory firm, Schiff Fine Art Advisory, in 2002. For more than a decade, she prospered by representing wealthy art collectors and artists to galleries and auction houses that sought sell to them (or buy from them) the contemporary art pieces about which she was a widely respected expert.
Her business model was to collect a commission on each transaction she brokered. By 2018, however, federal prosecutors say Ms. Schiff was no longer satisfied with a percentage of the value of the sales she made possible. Instead, she embarked on two related forms of fraud: not remitting payments to clients after she sold their artwork while concealing that the pieces had, in fact, been sold, and not purchasing artworks on behalf of clients who had given her money to do so.
Within two years, Ms. Schiff began to grow desperate, and considered admitting to at least two of her victims that she had stolen millions of dollars from them. She went as far as drafting letters of confession, but never sent them. Instead, according to federal prosecutors, she continued to defraud at least ten victims – including one artist, the estate of another artist, one gallery, and multiple collectors – for another three years, in transactions involving at least 55 separate pieces of art.
“During her fraud,” federal prosecutors say, Ms. Schiff, “lived lavishly and incurred substantial debts, which she paid in part using her victims’ diverted funds.” By May, 2023, this scheme began to unravel, as multiple clients despaired of being paid money they were owed, and filed civil suits against Ms. Schiff. At this point, Ms. Schiff confessed to several of her victims.
One of these (whose name is being withheld) said in court filings, “on Monday, May 8, 2023, Lisa called me and admitted that that she could not remit the remaining proceeds… owed to me, and that the sale proceeds were gone. She said she had been in financial trouble for several years, and had been using her clients’ money for her own purposes; that she had fallen into a deep financial hole that she could not get out of; and that she had thought of declaring bankruptcy before the Covid pandemic began in 2020, but had been afraid of a criminal investigation. She also said she had gone to rehab to figure out a plan to get out of her financial hole, but had not figured one out…. I was blindsided and shocked by what Lisa said, and could not even process it as she was talking to me. I could not comprehend that a person who was so close to me for so long would have done this.”
“I am a wife, mother, art collector, and philanthropist,” this victim continued. “My family (including my husband, and a trust set up for our children) and I are, in terms of dollars and the number of affected artworks, the biggest victims of Lisa Schiff’s scheme to steal and defraud, bearing 60 percent of the losses that have been filed to date.”
The former client added, “Lisa’s misappropriation of funds and assets was not just a bookkeeping error or mix-up of two clients’ transactions, and we believe we still do not know the full extent of her theft from us. Rather, it was a premeditated plan to steal. In the last week before Lisa confessed to me that for years she had been stealing from her clients, including my family and our friends, Lisa was in my ear constantly and met up with me three times, throwing me a birthday lunch, doing a studio visit with me, and effectively distracting me from the disaster that was coming – while asking me for more money.” She notes that Ms. Schiff extracted a “last $190,000 transfer of funds from my children’s trust, at Lisa’s request, days before she
confessed her fraud to me.”
The victim said, “I also learned after Lisa admitted her fraud to me, while my attorneys and I were investigating the extent of our losses, that she had been pushing off overdue payments by slandering me, telling gallerists that payments were delayed because I was supposedly having financial problems – which was not true. She insisted that galleries only deal with her – not me – about any payments for artworks. Lisa told people I was in financial difficulty and asked them to be sensitive, so people didn’t bother me about delayed payments or past due amounts.”
“My family and I are lucky that our losses from Lisa’s theft and fraud have not ruined us,” she said, “but that does not mean that we have not felt the tremendous financial hardship of a six-million-plus dollar loss, including the legal fees which continue to accrue. I try to do good in the world through my philanthropy, and try to see the good in people. For many years I considered Lisa one of my closest friends, like a member of my family, and trusted her implicitly. I thought she considered me the same way.”
Ms. Schiff’s attorney, Randy Scott Zelin, told the Broadsheet that his client “is going to do the best that she can to make amends. She’s going to do the best that she can to cooperate with anyone who was hurt to try and get them their artwork. If we look at someone’s life as a photo album, we’re talking about a good photo album with some good pictures in it, and some bad pictures that we are working to straighten out.”
Acting U.S. Attorney Matthew Podolsky (the chief federal prosecutor for the district that includes Lower Manhattan) said, “for five years, Lisa Schiff breached the trust of her art advisory clients by diverting millions of dollars to pay her own business and personal expenses, and to fund a lavish lifestyle. Because of Schiff’s lies, and her illusory art advisory scam, Schiff will now serve a substantial sentence in prison.”