Art adviser to the stars Lisa Schiff suffered a massive reputational blow last week after a pair of wealthy clients accused her of running a “Ponzi scheme.” But her legal exposure got even worse on Wednesday, when a related group of plaintiffs filed a second lawsuit accusing her of many more instances of fraud, claiming they were bilked out of millions of dollars.
Schiff—who once served as an art adviser to Leonardo DiCaprio—has not commented on the allegations, but her company, Schiff Fine Art in Tribeca, filed a notice in New York Supreme Court on Wednesday that it has gone belly-up and will be liquidating any assets to pay off debts.
According to the new lawsuit, heiress Candace and her husband Michael Barasch (and a trust set up for their children) gave Schiff wide latitude over their art purchases. As their exclusive adviser, she had access to their credit card information and managed “all aspects” of their collection, “from purchases and sales” to installation and storage, they said.
The Barasches would pay Schiff in advance for art purchases, and she often encouraged them “to sell certain works and then re-allocate the proceeds” into other acquisitions, the suit said. Schiff or one of her businesses allegedly received a commission on each transaction.
Candace Barasch—who is also a plaintiff in the earlier “Ponzi scheme” suit—would speak to Schiff “several times” per day, and at times the two traveled together, the lawsuit said. During these trips, Barasch witnessed her adviser’s alleged penchant for luxury. On one visit to Paris in 2022, the lawsuit recounted, Schiff splurged on more than $32,000 in goods at a single store, including a pair of leggings for roughly $573, a $4,800 dress, and a $953 pair of jeans.
Their relationship devolved earlier this year after Schiff allegedly failed to pay Barasch and another couple $1.8 million from the sale of an oil painting, The Uncle 3 by Adrian Ghenie. Following months of delays, Schiff allegedly admitted on May 8 that she didn’t have the money. That dispute formed the basis of the “Ponzi scheme” lawsuit.
Since The Daily Beast first reported on that suit, many other parties in the art world have come forward and accused Schiff of other financial irregularities, the Barasches claimed this week. Several galleries, they said, told Candace Barasch that they were never fully paid for “works that Schiff purported to purchase” for the Barasches.
As one example, in early 2020 Schiff advised Candace Barasch on a “sculpture by Wangechi Mutu… that was available for purchase for $650,000,” according to the lawsuit. In the filing, Barasch claimed she wrote Schiff’s firm a check to pay for the deal. But, the suit continued, the gallery never got all the money, and a senior partner at the gallery recently told Barasch that she had an “outstanding balance of $252,000.”
Artist Tavares Strachan, Lisa Schiff and writer Neville Wakefield at a 2019 event.
Sylvain Gaboury/Patrick McMullan via Getty
In a second case representative of the alleged scheme, Schiff advised Barasch on a different sculpture, by Sarah Lucas, that was listed for $390,000. Once again, Barasch wrote a check, the lawsuit claimed, but the money did not find its way to the gallery.
In total, the Barasches asserted, they “transferred over $6.6 million” to Schiff and her businesses to buy art on their behalf over the past 18 months. They now believe that “much of the funds…was used instead to fund Schiff’s lavish lifestyle, cover debts [she] owed to other clients, or to consummate art purchases for other clients.”
The Barasches said they’ve had trouble figuring out exactly how many times they may have been defrauded, since Schiff was “the custodian of [their] inventory and records.”
Furthermore, they declared in the suit, Schiff tried to squeeze money out of them until the very end, even as she seemed to know her “scheme was about to implode.” According to the complaint, she pushed them to wire funds “every day of the week” before she finally confessed that she didn’t have their money.
Candace Barasch said in the lawsuit that she transferred $190,531 to Schiff earlier this month. Yet, Barasch added, when she confronted Schiff on May 8 and asked “where this money went, Schiff said she did not know.”
Neither Schiff, her lawyer, nor the attorney designated to steer the bankruptcy process immediately responded to requests for comment. Schiff’s LinkedIn account was also taken offline, and no one picked up the phone when The Daily Beast called her gallery. As ARTnews previously reported, on Saturday the artist Richelle Rich—who was supposed “to have a solo exhibition” at Schiff’s gallery next month—wrote in an Instagram post that “unexpectedly the gallery has closed.”
“We will no doubt learn the whole story as things play out in the press, but for now I am left pretty devastated that 5 months of planning this show may come to nothing,” Rich continued.
According to the Barasches’ complaint, Schiff has spent the past eight days trying to conduct damage control. She “apparently emailed at least seven of her other clients (but not Plaintiffs), saying that she has ‘fallen on incredibly hard financial times,’” adding that “her ‘current situation is very complicated from a legal perspective’” and to direct questions to her lawyer. The lawsuit also alleged that Schiff has contacted jewelers “to try to sell back thousands of dollars in jewelry.”
On May 8, Schiff told Barasch that she had “considered filing for bankruptcy prior to the start of the COVID-19 pandemic,” according to the suit, “but did not do so because she was afraid of a criminal investigation.” Supposedly, Schiff had hoped to brainstorm a way to get her and her companies “out of this financial hole during her stay in a rehabilitation center in San Francisco” in January 2020. (That rehab stint allegedly “cost over $100,000.”)
The Barasches are pursuing an injunction to freeze Schiff’s accounts. Otherwise they claimed, they will have “little to no chance” of clawing back their millions.