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Troubled Pacific Heights art dealers still in business 

Wednesday, Jan 7 2009

Matt Smith's Jan. 7 column, "Artist Con," stated that art dealer Nancy Wandlass pleaded guilty to felony embezzlement charges. In fact, Wandlass pleaded guilty only to a single felony embezzlement charge.

The column stated that in February 2007, her condominium was "heading irreversibly toward bankruptcy sale." In fact, it was headed toward a trustee sale.

The column also referred to Wandlass' "$30,000 Escada wardrobe." While a bankruptcy trustee's report shows her spending more than $30,000 on clothing between April and August 2007, only $18,415 of that money was shown to be spent at Escada. The balance was at Saks Fifth Avenue, Louis Vuitton, and Foot Candy. SF Weekly regrets the errors.

February 2007 was a tough month for Nancy Wandlass, an international art dealer known for her Louis Vuitton handbags, $30,000 Escada wardrobe, and constant presence at the Marina District's tony Rose Cafe. Two months earlier she'd been arrested with her husband, Thomas, on charges of fraud, grand theft, and conspiracy for allegedly stealing two 19th-century French paintings valued at $300,000. Adding further stress, Wandlass was attempting to crawl out from under millions of dollars' worth of past-due bills in bankruptcy court. The Wandlasses had run Pacific Heights Gallery from a condominium they owned on Jackson Street, but it was now buried in liens and heading irreversibly toward bankruptcy sale.

Perhaps worst of all, her long-held reputation as the stylish rogue of the tight-knit, handshake-based S.F. art world was wearing parchment-thin. More and more dealers had come to view her as a cheat. "None of us would ever deal with her. We knew she was a gonif — that's Yiddish for thief," said Ed Russell, who for 35 years ran the Graystone gallery on Geary Boulevard downtown, and now sells paintings by appointment.

But Wandlass had escaped tight spots before, and as she awaited trial for allegedly stealing the 19th-century French artworks, she told a bankruptcy judge that she was about to hit a home run that would make things right again. "With the additional paintings I am negotiating on to have for resale, the commissions from those paintings will pay off the remaining balance due to the secured creditors and also payoff the unsecured creditors," she wrote.

A Los Angeles lawsuit and a New York federal forfeiture case suggest that Wandlass really did bat one over the fence. In early 2007 she was serving as middleman for the sale of two modern paintings — "Hannibal" by Jean-Michel Basquiat, valued at $8 million, and "Modern Painting with Yellow Interweave" by Roy Lichtenstein, appraised at $3.5 million.

But, as seems to sometimes be the case with the Wandlasses, their business dealings were accompanied by a troubling backstory: The Basquiat and Lichtenstein paintings were contraband. They'd been smuggled into the U.S. with the help of falsified Customs documents after disappearing from the collection of a Brazilian banker convicted of fraud. The U.S. is now seeking to repatriate the paintings on behalf of the Brazilian government.

The Wandlasses' attorney, Cris Armenta, said her clients were innocent victims. "The Wandlasses are in full compliance with the law," she said. "They have cooperated in every respect with law enforcement to the extent that they've been requested." Indeed, court papers regarding the smuggled artworks appear to contain no evidence that the Wandlasses were aware of the paintings' troubled provenance.

In September, Nancy Wandlass cut a deal with prosecutors in which she pleaded guilty to felony embezzlement charges in connection with her 2006 arrest, Deputy District Attorney Bob Ring said. She was given three years' probation. Thomas Wandlass pleaded to a misdemeanor accessory charge, Ring said.

Despite their convictions, and the legal drama over the Basquiat and Lichtenstein pieces, the Wandlasses appear to be staying in the art business. When I reached Thomas Wandlass by phone recently, he said the couple's apartment-based gallery business continues "by appointment."

Edemar Cid Ferreira, the former head of Brazil's Banco Santos, made a name for himself in the art world by amassing a trove of famous Modernist paintings, which were displayed at international exhibitions he sponsored at museums such as the Guggenheim. After the bank failed in 2005, he was sentenced to 21 years in prison for perpetuating a $1 billion fraud, according to a U.S. government forfeiture case filed in New York. When Brazilian officials sought to reclaim some of his ill-gotten gains, they discovered that items worth some $30 million from his art collection were missing. Among them were Basquiat's "Hannibal" and Lichtenstein's "Modern Painting with Yellow Interweave."

As it turned out, the Lichtenstein painting had been crated and sent to New York from the Netherlands via a Panamanian shell company in December 2006. It was accompanied by paperwork describing its contents as "ornaments" worth less than $100, according to the federal forfeiture case. The crate's recipient, a New York art dealer named Alberto Barral, seemed to know what was inside. After the shipment arrived, Barral called the warehouse asking for "the Lichtenstein," the forfeiture filings say. He was told there was no record of anything under that name. According to the filings, he instructed the warehouse to uncrate the falsely identified 2006 shipment. Barral did not respond to a faxed request from SF Weekly seeking comment.

Wandlass made a deal with Barral to sell the Lichtenstein and the Basquiat, which arrived in New York several months later. In turn, according to a January 2007 consignment agreement, they agreed to have Doug Chrismas, owner of ACE Gallery in Los Angeles, sell the Lichtenstein. Chrismas sold it for $1.3 million to L.A.-area collector Seth Landsberg, who appraised it at $3.5 million for resale at Sotheby's.

ACE Gallery then ran the painting's name through a database of stolen artworks. Days later, a federal agent contacted the gallery to warn Chrismas that the Lichtenstein was subject to seizure and forfeiture, court papers say. In November 2007, federal agents seized the Basquiat painting from its New York warehouse. Armenta said the Wandlasses had no idea about the paintings' clouded origin. "They were absolutely stunned and surprised when they learned of the New York seizure action, and when they learned of the conditions concerning the paintings," the attorney said. "Pacific Heights Gallery had absolutely no knowledge of the conditions under which 'Hannibal' or 'Modern Painting with Yellow Interweave' were transported or brought to the United States. ... Pacific Heights Gallery entered into certain consignment agreements with a reputable art dealer in New York, Al Barral, with whom they had previously conducted business."

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Matt Smith


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