Manhattan gallery owner pleads guilty in massive $120M fraud scheme

Disgraced Upper East Side art gallery giant Lawrence Salander pleaded guilty today in a massive, $120 million fraud scheme -- admitting he soaked a roster of 28 wealthy friends and investors, including John McEnroe and Robert De Niro.

In a deal first reported exclusively in The Post, Salander, 60, admitted committing more than two dozen grand larceny and scheme to defraud charges -- 'fessing up to a decade-long abuse of the trust he'd earned as one of the art industry's most prominent dealers.

Under the deal, the bankrupt mogul will serve a maximum term of six to 18 years prison -- but he could get less time upon sentencing depending on how well he does making $120 million restitution ordered by Manhattan Supreme Court Justice Michael Obus.

Adding insult to Salander's injury, prosecutors publicly slurred the dealer as an unreliable drunk, and tried, unsuccessfully, to have him barred from drinking between now and his yet-determined sentencing date.

"We are quite concerned that his continued drinking habits will make him absent or unable to proceed," argued lead prosecutor Micki Shulman.

His lawyer, Charles Ross, protested that "Despite his struggle with his alcohol problem," Salander has made all his court appearances -- barring one absence after suffering a minor stroke two weeks ago.

"I will not make a specific condition of your bail that you do not drink, but I do not think you should," the judge cautioned.

The plea was attended by at least a dozen of Salander's victims, one of whom predicted he'd never get his money back from the cash-strapped crook.

"I think there's too much tragedy to make this a happy day -- but justice was served," said the man, declining to give his name.

Salander took his plea after asserting, through his lawyer, that a stroke he suffered almost two weeks ago did not affect his competency.

"I, Lawrence Salander, plead guilty to sixteen counts of grand larceny in the first degree," the disgraced dealer began, launching into a 12-page detailing of his misdeeds.

He also admitted to ten counts of grand larceny in the second degree, and three counts of grand larceny in the third degree. Finally, he admitted committing one count of scheme to defraud in the first degree.

He'd faced up to 25 years prison if convicted at trial.

By the mid-90s, prosecutors had charged, Salander began defrauding more than two dozen victims -- including some of the East Coast art world's biggest investors and owners, including Renaissance Art Investors, taken for a whopping $48 million, the purchase price for some 320 Renaissance works.

In some cases, as with McEnroe -- a long-time friend and godfather to one of Salander's seven kids -- he'd sell interests in the same painting multiple times, prosecutors charged.

In 2005, McEnroe invested $2 million in two of the gallery's paintings -- Pirate I and Pirate II by Arshile Gorky -- only to learn that he, Salander and a third investor all owned a 50 percent share in the two paintings.

In other cases, he'd defraud consignors by shuffling paintings location to location, selling them at will, even below the consignor's authorized minimum prices, to satisfy his mounting debts -- all the while keeping the consignors in the dark about his doings.

Such a scam was plied against De Niro, the actor, who managed the estate of his late father, a noted painter.

The gallery was also the sole handler for the paintings of Robert De Niro Sr. Prosecutors charged that in 2007, Salander sold two De Niro paintings -- Guitar Case and Landscape with Pink Field -- to an unnamed buyer for a total of $77,000 -- and had the entire amount wired directly into his gallery director's personal bank account without informing the estate of the sale.

"The financial side is not my strong suit," he told the Post from Rikers back in March, 2009 -- before he could scrape together a $1 million bail bond.

"He just really went off the rails," said one longtime associate yesterday. "I really don't think he started out intending to rip people off. One bad decision just led to another."

NY Post