“Art Adviser to the Stars” Slapped with Lawsuit in NY for Alleged Ponzi Scheme

“Art Adviser to the Stars” Slapped with Lawsuit in NY for Alleged Ponzi Scheme

By:  Serach Nissim

A prominent Manhattan lawyer who represented thousands of 9/11 responders and survivors has now filed a different kind of lawsuit.

As reported by the NY Post, a suit filed in Manhattan Supreme Court last week, accuses “art adviser to the stars” Lisa Schiff of a Ponzi scheme.  Lawyer Michael Barasch and his wife, real-estate heiress Candace Carmel Barasch, allege in the suit that they were swindled out of $6.6 million, which they paid “for what they believed were purchases of artwork.”  The suit alleges that the money was really used by Schiff to fund her own “lavish lifestyle”. Ms. Schiff filed for bankruptcy protection on May 15.  “It now appears that much of the funds…was used instead to fund Schiff’s lavish lifestyle, cover debts owed to other clients, or to consummate art purchases for other clients,” the suit alleges.

Mr. Barasch, the 68-year-old lawyer was a chief advocate for first responders and others harmed by toxic dust in Lower Manhattan caused by the September 11 attacks.  He is a managing partner at Barasch & McGarry law firm, which boasts having represented 25,000 people “in the 9/11community,” and having successfully collected some$3 billion for victims and their families from the federal Victim Compensation Fund. The firm collected approximately $300 million worth of fees connected with those cases, which would have been substantially more if not for the VCF placing a 10 percent limit on lawyer payments.

Mr. Barasch told The Post that this case, recently filed, is currently under criminal investigation by both the state Attorney General and the US Attorney’s office.  “My wife has been a patron of the arts for over 25 years,” he said, revealing she had been a longtime client and friend of Ms. Schiff. “She is passionate about helping young emerging artists, galleries, and museums. This fraud touched many, dozens of whom are now seeking justice.”

Art advisor Lisa Schiff, who had boasted illustrious clients including Leonardo DiCaprio, shuttered her Tribeca office and showroom a week after being served with the seven-figure lawsuit.  The suit alleges breach of contract, conversion, fraud, conspiracy, replevin, and unjust enrichment.  As per Artnet news, court documents paint the picture of a years-long pattern in which Schiff would tell Mrs. Barasch about available painting by sought-after contemporary artists with fast-rising prices, get her approval to buy the art, take full or partial payment—including a sales commission, taxes, shipping and insurance fees—and then in most cases fail to complete the purchase.

The suit alleges that Schiff owes her at least $2.5 million plus interest and damages for a series of art purchases that Schiff was meant to facilitate but which were not completed.  The May 17 complaint alleges that Schiff and her companies “have been engaged in a massive fraud…remitting millions of dollars to Schiff to pay in full for art purchases which she never transmitted to the galleries selling the works; likewise, [Schiff] failed to remit the proceeds of sales of Plaintiffs’ artwork. Instead, [Schiff] used Plaintiffs’ funds to spoil themselves with luxury travel, shopping sprees, and the like, or to pay obligations owed to other clients, or to purchase artworks for other clients.”