A major antiques dealership and an individual who was one of its directors are embroiled in what the US Attorney for the Southern District of New York, Preet Bharara, has called a “brazen shell game to deceive and hide assets from two federal courts, a court-appointed receiver and the SEC [Securities and Exchange Commission]”, according to a press statement.
A federal indictment was issued at the end of August by the US Attorney’s office against Robert A. Olins, the disgraced former chief executive of a technology company. According to court papers, the government says that Olins and the “group sales and marketing director for [an] antiques dealer [who was] also the president of its New York operations” joined forces to hide the proceeds of Olin’s art. Only Olins is being charged.
The federal indictment follows a civil case brought by the SEC in 2011 in which the court determined that Olins owed $3.4m for his role in an insider trading scandal. The court then ordered the sale of part of Olins’s art and antiques collection, valued between $8.6m and $13.8m, to pay his creditors.
The federal case argues that, instead of sending the full proceeds from any sales to the SEC and other creditors, Olins “devised a scheme, in co-ordination with” the gallery director (who is named in the federal papers as “co-conspirator one”, or CC-1) to hide assets from his creditors and “personally enrich himself”. The government claims that “from in or about July 2011 through the present” Olins and the gallery director sold works from the collection but Olins did not accurately report their value to agents handling the liquidation or reveal that they “had secretly sold or planned to resell the items at higher prices, with Olins illicitly pocketing the difference”.
We cross-referenced the court papers and found that the works in the criminal case also appear in the civil case, where they are listed as having been sold by Mallett Antiques, one of the oldest antiques dealerships in the world, based in London and New York. We researched an old, cached version of Mallett’s website dating from 2012 which names the company’s group sales and marketing director, who bore responsibility for the New York gallery, as Henry Neville. He no longer appears on the Mallett website. Reached at his home in Greenwich, Connecticut, Neville declined to comment for this story.
The US Attorney’s office declined to comment, as did Olins’s lawyer.
At the time of the alleged embezzlement, Mallett was a publicly traded company. Giles Hutchinson Smith, its former chief executive, did not respond to requests for comment.
Mallett has since been bought by group Stanley Gibbons. “The allegations, of which the company has only recently become aware, relate to Mr Olins’s dealings with Mallett Inc. some years ago,” Martin Peterlechner, the group marketing director for Stanley Gibbons, said. “Although the matter was unknown to us at the time of our acquisition of Mallett plc in October 2014, we are co-operating fully with the governmental authorities in the US and we are unable to comment further.”
The allegationsSALE 1
Under the liquidation terms of Robert A. Olins’s collection, any sale of work had to be approved by the court and the bank acting as a receiver. According to the criminal indictment, on or around 25 May 2012, the gallery director wrote to the bank that a client was interested in buying three Louis XV porcelain garniture vases from Olins’s collection and that, after a commission of between 10% and 20%, the bank would receive $540,000 from their sale.
A letter dating from 31 May appears in the civil case paperwork, signed by Henry Neville. In it, he confirms that the gallery will buy the garniture for $540,000.
According to the criminal indictment, the court approved the sale on 14 June 2012 and, two days later, the gallery director sent $540,000 to the bank. The US government is arguing that the vases were actually sold by the antiques dealer on or around 3 April 2012 for approximately £844,994 (or $1.2m), and that Olins knew this. It also alleges that, less than a week after sending $540,000 to the bank, the director deposited $160,000 in an account belonging to Olins and then credited $300,000 to Olins’ gallery account, so Olins received “at least $460,000 from the sale of the vases”.
SALE 2
A separate deal concerns a pair of Louis XV gilt-bronze dragon candelabra. In or around November 2013, an unnamed individual offered to buy the objects for $235,000. The bank agreed to the sale, and received payment of that amount. When it approved the sale, the bank understood that the unnamed buyer “intended to place the candelabra on consignment” with the gallery “in an effort to find a buyer who could pay in excess of $235,000”. (The candelabra are also mentioned in the SEC case, which states that they were consigned to Mallett).
On or around 19 November, the dealership recorded the sale of the candelabra for approximately $1.2m. On or around the same date, the gallery director sent a letter which included a cheque and credit note to the unnamed original buyer, according to the criminal indictment. It states that the original buyer was credited “at least $653,000” for the sale of the candelabra, “despite the fact that the antiques dealers had actually sold the item for approximately $1.2m”.
Also on or around 19 November, Olins sent an invoice to the gallery for $197,000—what he termed “my share of the sale”. The US attorney claims that Olins did not “disclose his receipt of these proceeds to the SEC, the receiver, the New York court or the California court [where his SEC case began], nor did he provide those proceeds to the SEC or the receiver”.