(Bloomberg) -- A high-profile New York art adviser faces years in prison after admitting she defrauded wealthy clients of more than $6 million to live a lavish lifestyle and pay off debts.
Lisa Schiff, who ran outposts of Schiff Fine Art in Tribeca and London, pleaded guilty to a single count of wire fraud on Thursday as part of a plea agreement, federal prosecutors in Manhattan said in a statement. She is set to be sentenced in January by US District Judge Paul Oetken.
The criminal case comes after clients began suing Schiff last year. More than 50 collectors, including Thomas Hagerty of private equity firm Thomas H. Lee Partners, and galleries such as Sotheby’s private sales department claimed she owed them for works she’d brokered. Schiff then closed her office and showroom in Tribeca and an outpost at London’s Cromwell Place, and she appointed a trustee to liquidate at least 800 artworks worth about $3.9 million.
Schiff agreed to forfeit about $6.4 million as part of her plea agreement. While wire fraud carries a maximum penalty of 20 years in prison, prosecutors agreed to not contest a federal sentencing guidelines range of 41 to 51 months behind bars.
Prosecutors said Schiff, who rose to prominence more than two decades ago, defrauded at least 12 clients, an artist, another artist’s estate and a gallery in two ways: by not sending payments to clients after she had sold their art and by not buying works that she had promised to acquire for them.
Instead, she lied to her clients, telling them that she hadn’t sold their works or that payment had been delayed. Prosecutors also said she lied to galleries that she had promised to buy art from and blamed the delays on clients — who had already paid her, the government said.
In May 2023, Schiff could no longer hide her scheme when her debts began to mount and told several clients she had stolen their money, prosecutors said.
Randy Zelin, a lawyer for Schiff, said he had been working with the US attorney’s office and bankruptcy trustees to sell artwork from her private collection to satisfy her creditors.
“Lisa was anxious to accept responsibility,” Zelin said. “She was anxious to get to work to make amends.”
A bankruptcy judge in Manhattan has authorized the hiring of Phillips Auctioneers LLC to sell Schiff’s artwork at an auction next month, Zelin said.
Before opening SFA, Schiff, who has a masters in art history from the University of Miami, worked at auction house Phillips, de Pury & Luxembourg in New York, and directed Edward Tyler Nahem Fine Art gallery. When she opened her exhibition space in Tribeca, the Financial Times called it “unprecedented.”
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