Art Dealer Pleads Guilty in $120 Million Fraud Case



John Marshall Mantel for The New York Times
Lawrence B. Salander left court after his plea Thursday.

“I am deeply ashamed and sorry for my actions,” the dealer, Lawrence B. Salander, 60, said after acknowledging that he had defrauded clients including the tennis star John McEnroe; Roy Lennox, a hedge fund manager; and Earl Davis, the son of the painter Stuart Davis.

Mr. Salander’s gallery, the Salander-O’Reilly Galleries, had occupied a town house on the Upper East Side, where it rented for $154,000 a month. It shut down in 2007. The gallery had displayed paintings as varied as English landscapes by John Constable and modernistic scenes by Robert De Niro Sr., the actor’s father, who died in 1993.

As Mr. Salander walked to the defense table in State Supreme Court in Manhattan on Thursday, he was steadied by his lawyer and another man. The lawyer, Charles A. Ross, told the judge, Justice Michael J. Obus, that Mr. Salander had had a stroke recently and had been hospitalized. Later, a prosecutor raised questions about Mr. Salander’s alcohol abuse.

Mr. Salander read an eight-page statement in a raspy voice, admitting to 29 charges of grand larceny and scheming to defraud investors. Among other things, he said he had bilked Mr. McEnroe out of about $2 million and the estate of Mr. De Niro out of more than $1 million.

“I did everything I have described knowingly and intentionally,” Mr. Salander told the judge.

Justice Obus then read each charge, stopping to ask Mr. Salander, “Is that correct?” or “Do you admit to that?”

Mr. Salander responded, “Yes, sir” or “I do.”

Once he had gone through all of the charges, Justice Obus told Mr. Salander: “Obviously, this case involves a great deal of money, and a great deal of pain and loss have been inflicted on the plaintiffs. I am hopeful they will be paid back to the extent it is possible here.”

Mr. Salander had been promised a prison sentence of 6 to 18 years, although Justice Obus indicated that in making a final decision, he would consider how much money had been repaid to Mr. Salander’s former clients.

The judge ordered Mr. Salander to appear on May 20 for another hearing after Assistant District Attorney Micki Shulman raised questions about Mr. Salander’s alcohol abuse. The judge told Mr. Salander, “I’m not going to make it a condition of bail that you never have a drink, but I don’t think you should.”

When Mr. Salander was indicted last year, the Manhattan district attorney at the time, Robert M. Morgenthau, said Mr. McEnroe had believed that he was buying a 50 percent interest in two paintings by Arshile Gorky, the Abstract Expressionist, for $2.03 million. Then, Mr. Morgenthau said, Mr. McEnroe heard that one of the paintings was hanging in another dealer’s home. Aides to Mr. Morgenthau said Mr. McEnroe later settled for full ownership of one of the paintings.

That arrangement later fell through because another Salander customer laid claim to the painting.