<div class="hd"> <h1>John McEnroe duped in art scam</h1> </div> <div class="byline"> <cite class="vcard">By Christine Kearney <span class="fn org">Christine Kearney</span></cite> - <abbr title="2009-03-26T15:07:55-0700" class="recenttimedate">15 mins ago</abbr> </div>
NEW YORK (Reuters) - Former <span class="yshortcuts" id="lw_1238105453_0">tennis champion John McEnroe</span> was duped along with <span class="yshortcuts" id="lw_1238105453_1">Bank of America</span>, investment firms, art owners and collectors in a sophisticated $88 million art investment scam revealed in <span class="yshortcuts" id="lw_1238105453_2">New York</span> on Thursday.</p>
<span class="yshortcuts" id="lw_1238105453_3">Art dealer</span> Lawrence Salander, 59, was arrested at his <span class="yshortcuts" id="lw_1238105453_4">New York home</span> on Thursday, when he and his gallery were charged with 100 counts, including <span class="yshortcuts" id="lw_1238105453_5">grand larceny</span> and <span class="yshortcuts" id="lw_1238105453_6">securities fraud</span>, Manhattan District Attorney <span class="yshortcuts" id="lw_1238105453_7">Robert Morgenthau</span> told a news conference.</p>
Salander pleaded not guilty in <span class="yshortcuts" id="lw_1238105453_8">New York's Supreme Court</span> and his bail was set at $1 million. He faces up to 25 years in prison on the most serious charge.</p>
"We intend to vigorously defend against these allegations in the courtroom." Salander's lawyer Charles Ross said.</p>
So far, authorities have identified 26 victims of Salander's scheme, including McEnroe, who lost $2 million after investing a half share in two paintings, <span class="yshortcuts" id="lw_1238105453_9">Arshile Gorky</span>'s "Pirate I and II." The share in the paintings was sold at the same time to another collector, and McEnroe never recouped the money, authorities said.</p>
Morgenthau said the scheme, which lasted from 1994 to 2007, included luring investors who paid cash in exchange for shares of ownership of works of art.</p>
"He sold artwork not owned by him and kept the money and lured <span class="yshortcuts" id="lw_1238105453_10">investment money</span> in fraudulent investment opportunities," Morgenthau said. Salander used the money to fund "an extravagant lifestyle" of lavish parties and private jets, he said.</p>
At times, Morgenthau said, Salander inflated the value of paintings to score greater investments that were not returned to investors.</p>
The investigation of Salander, the former owner of Salander-O'Reilly Galleries, continues. Other estates he looked after included paintings of the late father of <span class="yshortcuts" id="lw_1238105453_11">actor Robert De Niro</span>.</p>
Renaissance Art Investors, a company focused on investment in <span class="yshortcuts" id="lw_1238105453_12">old master paintings</span>, lost $45 million in the scheme, authorities said.</p>
Earl Davis, the son of American abstract painter <span class="yshortcuts" id="lw_1238105453_13">Stuart Davis</span>, lost $6.7 million, authorities said, while <span class="yshortcuts" id="lw_1238105453_14">Bank of America</span> lost $2 million after Salander lied about paintings he owned to secure a loan.</p>
Hester Diamond, the widow of late renowned <span class="yshortcuts" id="lw_1238105453_15">New York art dealer</span> Harold Diamond and mother of Beastie Boys' Mike D, lost $6 million, authorities said.</p>
McEnroe was alerted to the scheme when he learned an <span class="yshortcuts" id="lw_1238105453_16">art collector</span> owned the same painting he had, authorities said. A spokesman for McEnroe said he was on vacation and unable to be immediately reached.</p>
Most of the artworks, which are yet to be valued, are being held in the custody of a bankruptcy court in <span class="yshortcuts" id="lw_1238105453_17">Poughkeepsie, New York</span>. Many of the investors have filed civil claims against Salander and his gallery, which filed for bankruptcy and closed in 2007.</p>
(Editing by Michelle Nichols and Bill Trott)</p>
NEW YORK (Reuters) - Former <span class="yshortcuts" id="lw_1238105453_0">tennis champion John McEnroe</span> was duped along with <span class="yshortcuts" id="lw_1238105453_1">Bank of America</span>, investment firms, art owners and collectors in a sophisticated $88 million art investment scam revealed in <span class="yshortcuts" id="lw_1238105453_2">New York</span> on Thursday.</p>
<span class="yshortcuts" id="lw_1238105453_3">Art dealer</span> Lawrence Salander, 59, was arrested at his <span class="yshortcuts" id="lw_1238105453_4">New York home</span> on Thursday, when he and his gallery were charged with 100 counts, including <span class="yshortcuts" id="lw_1238105453_5">grand larceny</span> and <span class="yshortcuts" id="lw_1238105453_6">securities fraud</span>, Manhattan District Attorney <span class="yshortcuts" id="lw_1238105453_7">Robert Morgenthau</span> told a news conference.</p>
Salander pleaded not guilty in <span class="yshortcuts" id="lw_1238105453_8">New York's Supreme Court</span> and his bail was set at $1 million. He faces up to 25 years in prison on the most serious charge.</p>
"We intend to vigorously defend against these allegations in the courtroom." Salander's lawyer Charles Ross said.</p>
So far, authorities have identified 26 victims of Salander's scheme, including McEnroe, who lost $2 million after investing a half share in two paintings, <span class="yshortcuts" id="lw_1238105453_9">Arshile Gorky</span>'s "Pirate I and II." The share in the paintings was sold at the same time to another collector, and McEnroe never recouped the money, authorities said.</p>
Morgenthau said the scheme, which lasted from 1994 to 2007, included luring investors who paid cash in exchange for shares of ownership of works of art.</p>
"He sold artwork not owned by him and kept the money and lured <span class="yshortcuts" id="lw_1238105453_10">investment money</span> in fraudulent investment opportunities," Morgenthau said. Salander used the money to fund "an extravagant lifestyle" of lavish parties and private jets, he said.</p>
At times, Morgenthau said, Salander inflated the value of paintings to score greater investments that were not returned to investors.</p>
The investigation of Salander, the former owner of Salander-O'Reilly Galleries, continues. Other estates he looked after included paintings of the late father of <span class="yshortcuts" id="lw_1238105453_11">actor Robert De Niro</span>.</p>
Renaissance Art Investors, a company focused on investment in <span class="yshortcuts" id="lw_1238105453_12">old master paintings</span>, lost $45 million in the scheme, authorities said.</p>
Earl Davis, the son of American abstract painter <span class="yshortcuts" id="lw_1238105453_13">Stuart Davis</span>, lost $6.7 million, authorities said, while <span class="yshortcuts" id="lw_1238105453_14">Bank of America</span> lost $2 million after Salander lied about paintings he owned to secure a loan.</p>
Hester Diamond, the widow of late renowned <span class="yshortcuts" id="lw_1238105453_15">New York art dealer</span> Harold Diamond and mother of Beastie Boys' Mike D, lost $6 million, authorities said.</p>
McEnroe was alerted to the scheme when he learned an <span class="yshortcuts" id="lw_1238105453_16">art collector</span> owned the same painting he had, authorities said. A spokesman for McEnroe said he was on vacation and unable to be immediately reached.</p>
Most of the artworks, which are yet to be valued, are being held in the custody of a bankruptcy court in <span class="yshortcuts" id="lw_1238105453_17">Poughkeepsie, New York</span>. Many of the investors have filed civil claims against Salander and his gallery, which filed for bankruptcy and closed in 2007.</p>
(Editing by Michelle Nichols and Bill Trott)</p>
