The fallout from the Inigo Philbrick debony keep on going. Last I heard, Robert Newland, formerly a partner and business advisor to Inigo Philbrick, has to plead guilty in a Manhattan courtroom for conspiring with him to defraud investors. The judge has yet to decide how long the sentence will be, but he could face a horrific 20-year prison sentence.
How the hell could this have happened? Court documents reveal what the victims already know all too well: that Philbrick sold multiple pieces of artwork to his clients; he invented fake buyers, he forged documents, and he tricked art lender Athena Art Finance into lending him more than $13 million, never repaid. This sum was secured on a rotating pool of works of art, held by a Jersey-based company he had set up.
The scandal reveals the fragilities of the art market: its opacity, its transactions made on trust and, at times, the lack of due diligence. For example, Athéna first wondered about the provenance of Jean-Michel Basquiat’s 1982 Humiditythat Philbrick wanted to add to the pool. But when told that Philbrick owned it (which turned out to be incorrect, as he had sold shares to other people), Athena went ahead and accepted it, leaving Philbrick able to borrow millions of dollars from the company.
But what did the FBI easily discover? That the purported seller of the $18 million painting (a “Pennsylvania company”) had never heard of Basquiat and had never sold any art. A simple check could have alerted the lender early in the process and avoided the current legal battle over the property.
There is also a thorny lawsuit regarding Yayoi Kusama in 2016 infinity mirror room, currently in storage in Florida after a German investment firm, Fine ArtPartners, applied for ownership, after discovering they weren’t the only potential owners – a Saudi entity called MCVA also claims it. Don’t hold your breath to untangle it.
So who or what is to blame? “Any scam requires a certain level of trust,” says Judd Grossman, an attorney who represents one of the parties to the Basquiat brawl. It seems most of the cast in this sad tale were only too willing to trust Philbrick, aided by his mild manners, good track record, and high-flying lifestyle (literally: he apparently spent much of his ill-gotten gains in private planes. ) and an impressive address book.
Will something like this happen again or is it now a more cautious art market, chastened by this saga? Unfortunately, probably not. Several other trusted jobs in the art world – the most recent being the Anna Delvey/Sorokin fiasco – show that the nerve of some players, the secrecy of the art market and the attractiveness of its lifestyle will always attract bettors.
But hopefully, Philbrick’s story might persuade a few more to increase their due diligence, review documents more carefully, ensure proper contracts and records are in place, and to be less influenced by beauty and winning—or in Philbrick’s case, losing—manner.