The New York art advisor Lisa Schiff is facing a second lawsuit from one of her longtime friends, the prolific art collector Candace Carmel Barasch, alleging multiple instances of fraud and embezzlement. The initial lawsuit was filed on May 11 by Barasch, Richard Grossman, and his spouse, and outlined an allegation that Schiff was running a “Ponzi scheme” and failed to disburse $1.8M in profits from the sale of a co-owned Adrian Ghenie painting that she brokered. The art consultant has since filed for bankruptcy as of May 17, executing an assignment for the benefit of creditors to liquidate her business assets in an effort to repay her debts.
Since the original suit was filed, Barasch, a real-estate heiress who has maintained a close friendship and business partnership with Schiff and Schiff Fine Art respectively for nearly two decades, has been contacted by various galleries from which she and her husband Michael had supposedly purchased artwork from through Schiff’s consultancy. She was then told that several of her purchases brokered by Schiff Fine Art were either never initiated or paid in full even though the Barasch couple had wired the funds to Schiff to complete the sales.
The separate suit filed by the Barasch couple yesterday, May 17 alleges that in the last three years, Schiff has diverted over $2.5M in funds from them that were intended for the purchase of several artworks to “fund her lavish lifestyle,” cover debts owed to her other clients, and “consummate art purchases” of other clients. This does not include the additional fees from sales taxes, packing, shipping, and storage costs that would amount to additional hundreds of thousands of dollars, pushing that number up over $3M.
Neither the attorneys representing the Baraschs nor those representing Schiff responded to Hyperallergic’s immediate request for comment.
Schiff reportedly partially admitted to this to Candace in a phone call pertaining to the diverted profits from the brokered sale of the Adrian Ghenie painting on May 8, days before the initial lawsuit was filed. According to the court filing, Schiff admitted that she and her consultancy “had dug themselves into a large financial hole that they could not get out of,” and that she had initially thought about filing for bankruptcy prior to the pandemic but chose not to in an effort to avoid a criminal investigation. When Candace asked how this financial hardship affected her and her husband’s art collection, Schiff mentioned the failed purchase on their behalf of a Sarah Lucas sculpture from Gladstone Gallery. Approximately 15 artworks that were supposed to be in the Barasch couple’s collection had been affected by Schiff’s diversion of funds.
Schiff’s bankruptcy document outlines that she and her consultancy are “indebted to diverse persons in sundry sums of money which [they] are unable to pay in full,” and are seeking to repay the sum pro-rata by “the assignment and distribution of all [their] property for that purpose.”