A Russian Billionaire, an Art Dealer and an Epic Feud

00:05
Speaker 1
Around 2002, a russian businessman named Dmitry Rabolovlev was touring a mansion he just bought in Geneva, Switzerland. As he and his family were walking through, a piece of art by a famous modernist painter. Caught his eye.

00:24
Speaker 2
They know, noticed that the previous owner had a chagal hanging on the wall. So Dmitri Rabov is super smitten by the chagal. And so he thinks, man, I'd love to own a chagal. Is that even possible now? Well, gosh, I do have the money.

00:40
Speaker 1
That's our colleague Kelly Crowe.

00:43
Speaker 2
As he's walking through the house, he also notices that there are spotlights festooned throughout the house where other paintings should have gone. And so he thinks, gosh, I'm either going to have to renovate this house to take down all these spotlights, or maybe I just hang up paintings of my own and start collecting art to put on the wall.

01:03
Speaker 1
So Rabolovlev decided to do just that, become an art collector. The problem was he didn't know much about buying art. He needed a trusted advisor, someone to help him navigate this world.

01:19
Speaker 2
You really want to trust someone else to haggle for you, which is what collectors do. A lot of them will enlist an art advisor or another art dealer to do some of that dirty work on their behalf, to get them the best price and to find them the right deal.

01:37
Speaker 1
So Rabolovlev hired a guy, a swiss dealer who is deep in the world of high end art. And over the next dozen years, Rabolovlev spent $2 billion on art, buying masterpieces by many of the greats, some of.

01:56
Speaker 2
The world's best pictures that you can possibly get on the private marketplace. He had Picasso's. He had mediglianis, nudes and sculptures. He had a da Vinci, for goodness sake. How many collectors can say they owned Leonardo da Vinci?

02:15
Speaker 1
But now Rabolovlev alleges the man he saw as his trusted advisor betrayed him to the tune of $1 billion. And he's fighting it out in court.

02:30
Speaker 2
I think at the heart of this case is, does this amount to fraud, or is it just that this guy got a raw deal and feels like a chump?

02:42
Speaker 1
Welcome to the journal, our show about money, business and power. I'm Kate Limbaugh. It's Friday, January 26. Coming up on the show, a russian billionaire and accusations of the biggest art fraud in history.

03:11
Speaker 3
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03:46
Speaker 1
Dmitry Rabolovlev trusted one man to help build up his art collection, that swiss dealer named Eve Bouvier. Bouvier was well known for working at a massive art storage facility in Geneva. His work connected him to collectors and galleries around the world. And Bouvier made a strong impression on Rabolov.

04:10
Speaker 2
He's blonde, he's very suave, and know presents himself as exactly what Dimitri needs. He's the guy who not only knows what's in all of those crates, he knows all of the owners of those paintings. And he's looking for the right kind of collector to trust him to go hunting for paintings.

04:30
Speaker 1
Bouvier's hunt for art was not on the public market with paddles at auctions. Instead, he found his treasures more discreetly, in the private art market.

04:44
Speaker 2
Buying artworks privately, what you essentially need is a guy who knows more than you, right? Knows where the bodies are buried, knows where the paintings are, can reach out to the sellers directly. It's almost like trying to find a house, right? How do you find a house without a real estate broker? You need a guy who can get you in.

05:03
Speaker 1
Rabov thought they had a deal where he would pay Bouvier a commission that was generally in the neighborhood of 2%.

05:11
Speaker 2
And the next thing we know, he's presenting Dmitri Rabolovlov with a van Gogh. And it's presumably being sold by company called Arrow Fine Art. And the next painting comes up is Picasso. This company called Eagle Overseas is the seller. Okay, so then there's a Medigliani that comes around, and this comes from a french lady and Lillian Dimuchette, and it's from this other company called Kinsride Finance. The paperwork comes from all over, from France, from Hong Kong. He's paying sometimes 30, $40 million a pop for some of these pictures.

05:48
Speaker 1
And the walls in his house are no longer empty.

05:51
Speaker 2
Right. I think he's just feeling like, wow, my guy is really pulling in artworks from all over the world, and he fully trusts Bouvier. Oh, 100%. I mean, at some point over the years, Dimitri has this big birthday party in Hawaii, and, of course, Eve's there. I mean, within, like, a group of maybe five to ten people that Dimitri trusts the most, like Eve is at that table. He's in.

06:15
Speaker 1
Maybe the most famous painting bouvier secured was a 500 year old Leonardo da Vinci. It's been called one of the world's biggest art finds. For more than a century, art dealers hunted for this lost treasure, the Salvatore Mundi, or savior of the world.

06:33
Speaker 4
Is this the most thrilling art discovery of our time? A Leonardo da Vinci of Jesus Christ.

06:41
Speaker 1
Rabolovlov bought the painting in 2013 for about $128,000,000. Over more than a decade, he purchased dozens of works through Bouvier, spending about $2 billion. But at some point, he started to question the price tags.

07:02
Speaker 2
So as the prices get higher, Dimitri's instincts start to kick in that maybe he's being too exuberant, maybe he's buying too much and spending too much. And it all comes to a head on St. Barth's.

07:19
Speaker 1
While on vacation in the Caribbean in 2014, Rabolovlov met an art consultant from New York. It turned out this consultant had helped broker the sale of a mo Digliani painting that Rabolovlev bought.

07:34
Speaker 2
All of a sudden, Dimitri is like, here's my chance to independently confirm the price. He's like, hey, how much did you sell that for? Well, he said, gosh, we sold it for $93.5 million. Okay, now, Dimitri, for him, time stops, because he had paid $118,000,000 for that painting. So that's a huge markup, much more than the 2% that he thought he had just kicked to his guy.

07:59
Speaker 1
Bouvier, his trusted advisor, had been kind of fleecing him.

08:06
Speaker 2
That's how he saw it.

08:07
Speaker 1
Rabolov thought Bouvier was just brokering his art purchases. But what he learned was that Bouvier was secretly buying the art first and then quickly reselling it to him, often for millions of dollars more.

08:24
Speaker 2
Dmitri Rabolovlov has no idea that most of the artwork that he's buying is coming from one seller. His own guy. Bouvier is buying artworks on the down low and then flipping them to him with huge markups.

08:41
Speaker 1
Is there a sense of how much all of these markups added up to?

08:45
Speaker 2
Yeah. So it ended up being, like, close to a billion.

08:50
Speaker 1
What?

08:51
Speaker 2
Yeah, yeah. And one place where this middleman is getting a lot of his work is from Sotheby's.

09:02
Speaker 1
Sotheby's one of the world's oldest and biggest brokers of fine art. How is Sotheby's involved in these transactions?

09:12
Speaker 2
So, on occasion, as the prices got higher, right. We're talking over $100 million a pop. Obviously, Dimitri would get a little nervous. He's like, are you sure that this is the right price that we should be paying. Are you sure that this is significant? And sometimes what would sort of get him over that hump is that Yves Bouvier would send him emails from Sotheby's, not only vouching for the work, but praising its qualities, praising its significance, sometimes offering, know, comparable prices. So sometimes he little, a little nudge.

09:47
Speaker 1
Sotheby's brokered the sales of dozens of works of art to Bouvier, who would turn around and flip them days or months later to the Russian at inflated prices. This included that da Vinci, the Salvatore Mundi. In 2013, Bouvier bought the da Vinci for $83 million in a private sale through Sotheby's. And then days later, Bouvier turned around and sold the painting to Rabolov for a lot more, $44 million more. To Rabolov, this looked a lot like fraud. Bouvier has maintained that he did nothing wrong. He didn't see himself as an advisor, and he said he was free to set prices as he wished. So what happens from there? What does Rabovlov do?

10:50
Speaker 2
So the two of them basically end up battling in courts all over the planet for the next decade. They start suing each other in Monaco and in Switzerland and in Singapore. Basically, anywhere that Yves Bouvier has a freeport or they've done business, they're in court. They're just fighting in court. Know a dozen or so years trying to hash out what Dimitri should have known, what he should have asked, what he should have been told before he signed these checks, and what Bouvier owed to him or not.

11:22
Speaker 1
And what's the outcome of these court battles?

11:26
Speaker 2
So, at the end of last year, the two settled. Finally, after fighting each other for a long time, we don't know what that settlement amount was worth, but to Bouvier, it was like, hands up, we're done.

11:42
Speaker 1
Like, we're good today. The swiss art dealer says the settlement proves his innocence.

11:52
Speaker 2
But Dimitri wasn't done fighting, and so he looked to the next entity that he thought was culpable in this long orchestrated ordeal.

12:04
Speaker 1
And who is that?

12:05
Speaker 2
And that's Sotheby's.

12:08
Speaker 1
Now, Rabolovlov has taken his legal battle to New York and is suing the famed auction house for fraud. That's next.

12:28
Speaker 5
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Speaker 6
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13:48
Speaker 2
You.

13:55
Speaker 1
For the last few weeks, Kelly's been spending most of her days in a Manhattan courthouse.

14:02
Speaker 4
Where are you going?

14:03
Speaker 2
Up to the Sotheby's trial. I feel like I'm in law and order. I have been in a courthouse, which is unusual for me because I'm usually in museums and galleries and artist studios and very well lit, yummy places. And now I'm like checking in my phone every day, all day, and it's very surreal.

14:24
Speaker 1
Rabolovlov is not one of the russian oligarchs who've been sanctioned by the US, so he's able to appear in court for his suit against Sotheby's. Kelly sees him there regularly. He's in his fifty s with soft features, gray hair, and a slouch.

14:41
Speaker 2
He is very quiet and mild mannered. He's very tall. He kind of has, like, this handsome ichabod crane vibe to me. He sort of has the stoop shoulders, like he's used to having to lean over people because he's pretty tall.

14:56
Speaker 1
The Sotheby's trial focuses on just four paintings, among them da Vinci's Salvatore Mundi. Rabovlov is seeking $190,000,000 in damages. What is Rabolovlov alleging in this case?

15:14
Speaker 2
So essentially, he's alleging that Sotheby's knew that Yves Bouvier was buying pictures from their private sales department and turning around and flipping them. Right? Selling them at steep markups.

15:30
Speaker 1
And what does this case boil down to?

15:33
Speaker 2
Yes, I think the burning question is, when does getting a bad deal on art like Leech into fraud? And can you hold a company like Sotheby's, the big auction house, accountable, know, overpaying for art one of the people.

15:49
Speaker 1
At the center of the case is Sam Valett, the head of private sales at Sotheby's.

15:55
Speaker 2
So Rabolovlov's people feel like Sam Valette was like a right hand man to Bouvier. Like, funneling him works, inflating the values, like writing these gushy emails, raving about how important and expensive they are, without disclosing know, Sotheby's had a vested interest in these works, finding a home.

16:15
Speaker 1
And what does he say on the stand? What's his testimony?

16:18
Speaker 2
So his testimony is that he was just following the industry best practices, right? That he has a client in Bouvier, and his know, Bouvier at one point was his biggest client, and he was selling works to Bouvier that were going to other collectors as well. So he just was trying to keep his guy happy, and his guy, in his mind, was Bouvier.

16:43
Speaker 1
Rabov took the stand earlier this month.

16:48
Speaker 2
I think it's still fascinating that a russian oligarch wants to come to New York to seek justice from an auction house here. This is the forum that he wants, and he feels really betrayed. I was shocked that toward the end of his testimony, on the second day that he actually cried.

17:07
Speaker 1
I'm sorry. He cried.

17:09
Speaker 2
Not like sobbing tears, but he choked up. His eyes got watery, his face flushed, and he had to ask for a moment while he collected himself. He was kind of reclemped. I mean, I'm looking around the courtroom like, is everyone seeing this?

17:22
Speaker 1
What made him cry?

17:24
Speaker 2
Well, he was asked, why did you trust Bouvia? Why did you trust him? And he basically just said, look, I don't trust very many people. It's really hard for me to do that. But once I do, once you get in, I treat you like family. And then it all just like. He felt really betrayed. But it was riveting. It was riveting to see it in person.

17:46
Speaker 1
A verdict is expected soon. Kelly says that even with this dispute, Rabolov has done well as a collector.

17:57
Speaker 2
One of the weirdest ironies in this whole thing is that one of the paintings, this da Vinci, right? The Salvatore Mundi, he sold for way more than he paid for it.

18:09
Speaker 4
I have it at 110,000,000. Who will give me 120? Give me 140.

18:13
Speaker 1
At a public auction at Christie's in 2017, Rabolovlov sold his da Vinci.

18:20
Speaker 4
The bid was 350. Was called on the telephone at 350,000,000. For Leonardo Salvador Mundi, it became the.

18:28
Speaker 1
Most expensive piece of art ever sold.

18:32
Speaker 4
Million Leonardo Salvatore Mundi selling here at Christie's. $400 million is the bid and the piece is sold.

18:44
Speaker 1
Rabolovlev made nearly $300 million off the painting.

18:49
Speaker 2
The funny thing is you can never predict what will happen in the art world. So who's to say who got suckered there? I don't even know at this point.

19:08
Speaker 1
That's all for today. Friday, January 26 the journal is a coproduction of Spotify and the Wall Street Journal. The show is made by Annie Baxter, Kylan Burtz, Katherine Brewer, Maria Byrne, Victoria Dominguez, Pia Godkari, Rachel Humphreys, Ryan Knutson, Matt Kwong, Jessica Mendoza, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez Espinosa, Heather Rogers, Jonathan Sanders, Pierce Singhy, Jivika Verma, Lisa Wang, Catherine Whalen, Tatiana Zamis and me, Kate Limbaugh. Our engineers are Griffin Tanner, Nathan Singapock and Peter Leonard. Our theme music is by so Wiley. Additional music this week from Katherine Anderson, Marcus Bagala, Emma Munger, Peter Leonard, Bobby Lord, Nathan Singapock Audio Network and Blue Dot sessions. Fact checking by Mary Mathis. Thanks for listening. See you Monday.