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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?"
