Correction
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."
Landsberg has sued the Pacific Heights Gallery and Chrismas for breach of contract. Since Chrismas sold him the painting on consignment from the Wandlasses, Landsberg alleges that they had wrongly guaranteed him a clear transfer of ownership title, and that they should have known the provenance of the piece.
Regardless of whether Nancy Wandlass or her husband were privy to the situation surrounding the stolen paintings, the very fact that the Wandlasses were still dealing in high-value artworks becomes remarkable when you consider their reputation. "For them to be able to continue operating is discouraging, to say the least," said Don Hrycyk, an L.A. detective specializing in art cases. But the sale of art isn't a licensed profession like medicine or law, where egregious conduct violations result in expulsion from the trade.
As part of Nancy Wandlass' recent plea deal stemming from her 2006 theft case, she agreed to pay $27,000 in restitution to her victims, prosecutor Ring says. That's a fraction of the money she owed, and about what she spends on clothes in a season, as tallied by Wandlass' bankruptcy trustee. But Ring says he couldn't prevent her from dealing in art in the future. "We can't prohibit someone from working," he said. "It's unconstitutional," but noted that if she violates the law again, the terms of her probation could be revised, and her relatively lenient sentence made more severe.
Hrycyk, who has had his share of cases where convicted art swindlers get off lightly, described the problem bluntly. "You go to the downtown courthouse, and they're dealing with rapes, murders, armed robberies," he said. "These people [art criminals] can be outright thugs in nice suits. But as long as they can portray themselves as somebody who's legitimate and has learned from their mistake, oftentimes they can get a second chance, or a third chance, from the courts."
The free-for-all nature of the world of expensive art seems designed to confuse the difference between cheating and simply trying to make a living. At any given time, the art market consists of a small group of collectible works for sale, and a similarly small number of wealthy buyers scattered around the globe. As a result, independent dealers often work with each other to connect paintings with clients, selling artworks on consignment in transactions that may involve two or three middlemen. Consignment agreements, where dealers take a painting based on the idea that they'll pay the owner when it's sold, are commonplace. "Either you have the painting, or you have the client," said Kevin Anderson of Anderson Galleries in Beverly Hills.
Deals may be scarce, but they can be huge, as multimillion-dollar artworks can bring in commissions of 10 percent. So the art business can consist of lean periods, followed by occasional home runs. Without careful accounting, however, a dealer can descend into a spiral of missing payments to consignment clients in hopes of financing the next big score. "They use other people's money, and pretty soon they get stuck, and they go underwater," Anderson said.
Despite running what, in dollar terms, is a midsize business, Wandlass doesn't seem to do any bookkeeping. "In addition to her penchant for spending, Ms. Wandlass keeps no business books and records, nor has she filed or paid taxes since at least 2005," wrote Sara Kistler, the United States Trustee assigned to Wandlass' bankruptcy case, in a March report. "Based on Debtor's disposition of very large sums of her net 2007 income of $363,000 on high-end goods and services, she is not proceeding in good faith to a fair resolution with her creditors, nor can she be expected to do so in the future."
Making matters worse for Wandlass, she's an apparent binge shopper who seems to eat solely at expensive restaurants. During a four-month period in 2007, while some $1.5 million in bills languished unpaid, she spent more than $34,000 on clothes, which she flaunted at various fine restaurants, where over four months she ran up bills of more than $12,000, according to Wandlass' personal financial records filed as part of her federal bankruptcy case.
Wandlass seems to have supported her lifestyle over the years by serially stiffing galleries and other painting owners, credit card companies, her condo association, and a pages-long list of other businesses and individuals, as financial records filed as part of her bankruptcy case suggest. "I've been in this business a long, long time, and I've seen a lot of characters in this business," S.F. art dealer Russell said. "But they [the Wandlasses] were the most out-and-out dishonest of all of them."
Wandlass first became notorious in 2002, when she pleaded guilty to misdemeanor charges including unlawful delivery of goods in connection with a consignment deal gone bad, according to an Associated Press story. Nonetheless, in July 2005 Anderson signed a one-week consignment agreement with her to sell works by Gustave Loiseau and Louis Valtat valued at $300,000. A year later, he hadn't got his paintings back, despite endless cajoling. Finally, he flew to San Francisco, and walked into the Tenderloin police station to file a complaint (which eventually led to the couple's arrest in December 2006).
SFPD inspector Greg Ovanessian visited a South San Francisco warehouse, where the paintings had been crated for shipment. He was bemused by what he found. Documents on file showed that as Anderson's pleas became more insistent, the Wandlasses packaged the frames for the Valtat and the Loiseau — minus the paintings. "It was only when they found out the police were involved that they reunited the paintings with the frames," he said. "You try to think: 'What is in their mind?' If they were pressured some more, and they shipped the empty frames, what was going to be their explanation?"
Thanks to Ovanessian's quick work, Anderson got his paintings back within two weeks. Others who'd placed paintings on consignment with the Wandlasses weren't so lucky.
According to bankruptcy filings, one gallery in New York spent a fortune in legal fees attempting to reclaim a painting. "We are out of pocket $160,000 on the Hoffman painting you stole, plus almost $75,000 in legal fees because of your prolonged efforts to avoid being served," Gordon Avard, controller at the gallery, wrote to Nancy Wandlass in February 2007. "We've chased you almost four years. [But] I can wait a little longer to get paid in full." East Coast collector Neil Weisman was poised to settle for a $50,000 payment in lieu of $2 million he had been owed, according to bankruptcy records
It wasn't just high-flying collectors and dealers who considered themselves victims of Wandlass' way of doing business. For 26 years, Krauth Brand worked as studio assistant to the famed abstract painter Sam Francis. When Francis moved from L.A. to Inverness, Brand and his wife, Theresa, moved with him to manage his property and gallery there. In 1994, when Francis was dying of cancer, he gave Brand a painting, which was recently valued at around $200,000.
Not long ago, the Brands placed the painting with Wandlass to sell on consignment. She sold it for $163,000, but didn't pay the Brands, Theresa Brand said. Eventually, they obtained $10,000 from Wandlass after prosecutor Ring pressed her to pay restitution to some of her victims as part of her plea deal.
Theresa Brand, 62, works as a bookkeeper; her 67-year-old husband now works at a framing shop. Lacking significant savings for retirement, they plan to continue working into the foreseeable future. "We went to all the bankruptcy hearings, and she was always talking about the big score that she had coming," she said. "She always showed up to court with Louis Vuitton purses and all this stuff, and it just killed me."
