New York’s Gagosian Gallery and Jeff Koons were sued by a collector who accused gallery founder Larry Gagosian and the artist of scheming to exploit demand for his works and using “inappropriate and highly questionable practices” to fund extravagant lifestyles.
Collector Steven Tananbaum sued in New York state court on Thursday over the non-delivery of three Koons sculptures, claiming a “well-oiled machine” that exploits collectors’ desire to own the artists’ works by using incoming money to pay debts. The complaint alleges the defendants take deposits and payments from collectors while continually delaying the delivery of purchased works.
Tananbaum says the gallery and the artist convince collectors to remit an initial deposit of $1 million to $2 million, along with additional payments of the same amount. They promise delivery of sculptures on a given date, only to later delay completion of the works by six months to a year, he claims.
“The archaic system, once all of the obfuscations are stripped away, exposes a garden-variety, interest-free fraudulent financial routine that hearkens the name Ponzi,” according to the suit. “New money is used to pay old obligations, not to mention that the archaic system is one that oversold the artist’s capacity.”
Representatives of Koons and Gagosian gallery didn’t immediately respond to requests for comment.