The trial at the federal courthouse on Foley Square in New York was “about the public interest,” attorney Daniel Kornstein assured the jury. One of the world’s richest men was accusing Sotheby’s auctioneers of helping to bilk him out of $380 million. But, really, “anyone could be a victim,” insisted Kornstein.
It was a spin on a line from Fitzgerald: the very rich aren’t so very different from you and me. But could the regular folks on the jury feel empathy for Kornstein’s client Dmitry Rybolovlev—a billionaire many times over? Rybolovlev was suing Sotheby’s, but in a sense, he was on trial, too, for being supernaturally rich.
A spectacularly successful speculator from Russia, Rybolovlev had supposedly allowed himself to be seduced by Yves Bouvier, the owner of a Swiss art-storage-and-transport company based at the Geneva Freeport—a parking garage for art where masterpieces can be stashed in secret and sold without the sellers ever having to pay taxes.
Rybolovlev was on trial, too, for being supernaturally rich.
According to Rybolovlev, Bouvier was meant to find, negotiate, and buy priceless artworks for him, while gaining a nice 2 percent commission on each purchase. From 2003 to 2014 he assisted Rybolovlev in amassing a collection of 38 masterworks, including Magrittes, Modiglianis, Klimts, and Gauguins. But all the while, Bouvier was allegedly buying the art at a (relatively) low price, selling it on to Rybolovlev at a highly inflated price, and pocketing the difference.
The most high-profile example was Rybolovlev’s purchase of Leonardo da Vinci’s Salvator Mundi. It was privately sold to Bouvier for $83 million via Sotheby’s and flipped days later to Rybolovlev for $127.5 million. It was estimated that in the course of dozens of art deals Bouvier instigated, Rybolovlev had overpaid to the tune of approximately $1 billion, a significant percentage of his personal wealth.
Locked for years in a kind of apache dance in courts around the world, Rybolovlev and Bouvier finally settled in November of last year for undisclosed terms. But Rybolovlev did not settle with Sotheby’s.
Rybolovlev’s lawyers in New York contended that Sotheby’s, in particular the blow-dried Samuel Valette, now the auction house’s vice-chairman for private sales, had helped Bouvier “plunder” Rybolovlev, by inflating the valuations of the artworks so that he believed himself to be getting a deal from Bouvier. They painted Rybolovlev as never standing a chance against these genteel, white-gloved velociraptors. Sotheby’s, however, declared Rybolovlev an over-delegating trophy hunter whose fetish for secrecy (extending to the firm’s own meager dealings with him) rendered him prey to a single-apex “friend”—and claimed it had been tricked, too.
After just five hours of deliberations last Tuesday, on an endlessly complex case where it was easy to get lost in the weeds, Sotheby’s prevailed.
The Oligarch
In the courtroom, Rybolovlev’s legal team had seemed to want to cast him squarely in the newish tradition of billionaire activist, along the lines of a Bill Ackman or a Dan Loeb. The onetime fertilizer magnate was here to protest the art market’s lack of “transparency”—a bit rich coming from somebody who made his fortune in post-Soviet Russia, registers his companies in Tortola, and banks his bucks in Cyprus.
Judge Jesse Furman had banned the word “oligarch” from his courtroom because, he declared, it was a “pejorative slur.” But while the judge also prohibited the jury from googling the case, a simple search of “Rybolovlev” ticked many of the boxes on the oligarchical bingo card.
There were yachts with helipads; yachts for racing; catwalk-model devushkas; the private Greek islands of Skorpios and Sparti; a matching pair of ski chalets in Gstaad worth $260 million; the soccer club A.S. Monaco, of which he is the majority owner; and a $29 million–plus Hawaii estate, where he’s been accused of blocking access to a public beach. He even paid $95 million for a (since demolished) Palm Beach manse formerly owned by Donald Trump, whose own civil trial for fraud recently wrapped up at the New York Supreme Court next door.
A simple search of “Rybolovlev” ticked many of the boxes on the oligarchical bingo card.
And yet a funny thing happened to Dmitry Rybolovlev on the way to this forum. One expected a playboy to appear, but in walked a professor. The cut of his jib was less Ermenegildo Zegna than it was Nathaniel Hawthorne—gaunt, severe, an all-black tie knotted at his neck. Neutralizing any hint of affluence, his black country-parson suit had been matched with a black V-neck sweater-vest over a simple white shirt sans the French cuffs and cuff links he is seen wearing in previous paparazzi shots.
He wore no limited-edition watch—in fact, no watch at all—a sacrilege in plutocratic circles. A pair of plain spectacles rode his beaky nose. He appeared a decade older than his 57 years and walked with a slight stoop.
From the stand, Rybolovlev’s voice barely rose above a whisper, almost every response preceded by a deep and effortful sigh. He seemed depleted, cashed out. One imagined he’d been awake for hours already tending to the business of his empire on the other side of the Atlantic, but it was clear from his continued presence in the courtroom—he was in the front row every day—that he considered the trial more important. He’d been seen (or made sure to be seen) down in the cafeteria futzing with the coffee machine.
The year 2014 was Rybolovlev’s annus horribilis. He’d been operated on for prostate cancer before traveling to the Eden Rock hotel in St. Barth’s to celebrate the New Year. At a lunch there, he met an art dealer for hedge-fund billionaire and New York Mets owner Steven A. Cohen. Rybolovlev had bought a Modigliani nude from Cohen, via Bouvier, in 2011. It was here that Rybolovlev learned that the painting had been savagely marked up before being flipped his way. Rybolovlev suffers from myocarditis, a weakening of the heart muscle. Upon learning of Bouvier’s actions, Rybolovlev testified that he thought he was having a heart attack.
The Dealer
Once upon a time, Rybolovlev felt that Bouvier had the mien of a “Swiss banker.” What’s more, he hadn’t suspected Bouvier of this kind of fraud, he testified, because he didn’t believe a simple storage-and-transport-company owner could access the kind of capital necessary to purchase art of this caliber.
But Bouvier was allegedly staging an elaborate pageant, falsifying tug-of-war negotiations to convince Rybolovlev—or, rather, Rybolovlev’s trusted lieutenant, Mikhail “Mike” Sazonov—of what great deals he was making for the “masterpieces.”
And once Bouvier supposedly had Rybolovlev in his jaws, he would not let go. When the art dealer Larry Gagosian tried to jam a suede loafer in the door and approached Rybolovlev directly, flashing private-equity investor Leon Black’s red Rothko at him and calling it “the best of them all,” Bouvier got wind of the deal and sent word to Rybolovlev to beware the “Armenian fox” with “the highest fees,” insisting somewhat comically, “This is not the most beautiful Rothko, and its orange colors are questionable.” He soon located for Rybolovlev the murky Rothko No. 6 (Violet, Green and Red): “An incandescent masterpiece … it glows.” Rybolovlev bought it for $184 million. Bouvier had paid just $80 million.
Bouvier was staging an elaborate pageant.
When the Salvator Mundi entered the picture, it was as an iffy Leonardo, new to the marketplace but already passed on by several museums. A friend of Rybolovlev’s had engineered the first introduction to the seller, robbing Bouvier of half his commission, so Bouvier warned Rybolovlev that “the buyer who pays too much for this painting … will be considered a fool and a laughing stock.”
Bouvier allegedly inserted himself into the deal as a liaison and proposed a mind game in which Rybolovlev didn’t bother to keep an appointment to view the painting, in order “to shake [the sellers’] confidence and break the morale.” Bouvier would then sweep in, ostensibly on behalf of a museum, and buy the painting at a reduced rate. It was a cunning plan and one that would have allowed Bouvier to control the sale and add a $44 million surcharge to the eventual cost. A little con atop the bigger con. (Bouvier’s invoice to Rybolovlev for the Leonardo labels it “as is,” as if it were a chipped plate.)
The Auction House
After settling with Bouvier, who maintains his innocence, Rybolovlev was now in New York, not just to demand satisfaction from Sotheby’s but seemingly to air his grievances with both Sotheby’s and Bouvier to as large an audience as possible. Another lawyer, who had had adversarial dealings with Sotheby’s in the past and was at the courtroom to spectate, confided, “There’s no way Sotheby’s wanted any of this out there.”
Rybolovlev’s lawyers argued that the sideline cheerleading and inflated valuations issuing from Sotheby’s—and in particular, the chatty, boyish Samuel Valette, who staged a couple of private viewings for Rybolovlev—proved pivotal to the mogul’s decisions to commit many millions more than necessary to score a Modigliani sculpture, a Klimt, a Magritte, and the Salvator Mundi (known internally at Sotheby’s as “Jack”).
But Valette claimed he was treated “like the help” at the viewings and hardly spoke. Valette did e-mail a colleague to pass a message to Sotheby’s C.E.O. at the time, Bill Ruprecht, warning him not to inflate the auction house’s own commissions when it came to selling to Bouvier: “I promise we will make 300 million U.S.D. of transactions with this buyer if we play it right.” (In addition to Rybolovlev’s deals, Bouvier apparently engaged in more than 800 individual transactions with Sotheby’s between 2005 and 2015.)
“I promise we will make 300 million U.S.D. of transactions with this buyer if we play it right.”
One of Rybolovlev’s arguments in court was that the auction house’s vaunted due diligence should have revealed the Russian as the “source of funds” for Bouvier’s transactions. His lawyers said that Sotheby’s should have sensed Bouvier was merely Rybolovlev’s adviser, and should also have realized Bouvier was flipping works to Rybolovlev with an abnormal upcharge, given that Bouvier asked Valette to revise his valuations again and again.
But the problem was that Bouvier and Rybolovlev’s exact arrangement was never put on paper, and while something did trigger an internal inquiry from Sotheby’s compliance staff, Bouvier passed it. Sotheby’s said they intentionally never asked Bouvier who he was reselling to, as prying into his client list might jeopardize their future sales to him. Sotheby’s had been charged with aiding and abetting the alleged scam, but ultimately, Valette came off more clueless than a colluder. The jury gave him, and Sotheby’s, the benefit of the doubt.
Poor Little Rich Man
Rybolovlev has always prided himself on outfoxing the foxes, tucking assets away in trusts all over the globe during an epic and uncommonly public divorce. But in choosing to operate outside the system, the very wealthy can be rendered every bit as vulnerable as the very poor who live there, too. Rybolovlev wept on the stand, recalling how he’d trusted the wrong people. He had a tiny inner circle. During the trial, Sazonov recounted his boss’s birthday parties being attended by perhaps “five to seven people overall.”
Rybolovlev described himself falling for what an F.B.I. expert witness called the time-honored technique of the “bump,” whereby a confidence man engineers a seemingly accidental meeting. This happened when Bouvier materialized in 2003 in a room at the Geneva Freeport right as Rybolovlev was being shown a Chagall painting in which he was interested.
“I couldn’t comprehend how he found himself there at that very particular moment, because nobody really invited him,” Rybolovlev recalls. The Chagall transaction was beset with multiple intermediaries, but here was Bouvier offering himself as a single trusted go-between promising discreet private sales.
Rybolovlev wept on the stand, recalling how he’d trusted the wrong people.
Now Rybolovlev is off-loading the works acquired via Bouvier, often at public auction and often at a significant loss. This is presumably to establish damages for lawsuits such as this one, costing him further millions. It all looks a bit histrionic, a bit look what you made me do. In Russia the expression for this is “to freeze your ears to spite your grandmother.”
The Salvator Mundi, however, is the exception. In 2017, Rybolovlev hired Christie’s to sell it, and the ensuing auction became a pop event, with thousands of people lining up to see it in four cities. Rybolovlev realized $450.3 million on the sale, courtesy of Saudi Arabia’s crown prince, Mohammed bin Salman Al Saud. There was talk of producing a Broadway musical about the painting’s checkered past. Sometimes it pays to go public.
Phoebe Eaton is an investigative journalist, a playwright, and the author of In the Thrall of the Mountain King: The Secret History of El Chapo, the World’s Most Notorious Narco
