GoFuckYourself.com - Adult Webmaster Forum - Would You Pay $104 Million For This?

From today's New York Times (full article is much longer - http://www.nytimes.com/2004/05/09/bu...y/09paint.html)

NEW YORK'S art auctions kicked into high gear last Tuesday, ushering in a delirious, two-week intersection of prized paintings and big, big money. One of the treasures involved was on display at Sotheby's the next day: a 1905 work by Picasso, "Boy With a Pipe (The Young Apprentice)," which fetched $104 million, a record for a painting sold at auction.

The mating dance between art and commerce, repeated every spring and fall in Manhattan, attracts cafe society's wealthiest inhabitants - Wall Street financiers, Hollywood stars, European royalty, corporate executives, Latin American hacienda owners and even gambling moguls; Stephen A. Wynn, who has a new Las Vegas casino in the works, is said by art aficionados to be among the most active bidders this spring.

At the periphery of the froth whipped up at Sotheby's and Christie's are scores of Manhattan galleries and private dealers who, with the utmost discretion and tact, court the glitterati. Art is displayed. Toasts are made. Backs are patted. Wallets are opened. Millions of dollars quietly change hands.

This hush-hush world, its boundaries defined by handsome East Side avenues and Chelsea and SoHo side streets, is far removed from the gavels, cellphones and hubbub of the major auction houses. It is frequented by major art collectors like Joe L. Allbritton, the biggest shareholder of the Riggs National Corporation and that bank's former chief executive.

Robert J. Hurst, former vice chairman of Goldman Sachs & Company and president of the board of the Whitney Museum of American Art, is another habitué. So, too, was L. Dennis Kozlowski, Tyco International's former chief executive, whom the Manhattan district attorney's office is prosecuting on fraud charges.

What all these men share, aside from a fascination with fabulously expensive art, is that they have been investigated - or, in Mr. Kozlowski's case, indicted - in connection with possible tax avoidance on their purchases. But the three businessmen are by no means the only ones who have attracted the attention of law enforcement officials examining records of art transactions. The New York State Department of Taxation and Finance said it was investigating about 90 people it suspected of evading sales tax, largely on high-priced art and jewelry.

The sums involved are not pocket change. New York sales tax on a $10 million painting, for example, is $825,000. The state's tax agency says it has collected about $11 million in unpaid sales taxes on high-end goods over the last year alone, most from tardy buyers spurred into action by publicity about Mr. Kozlowski's tax woes.

Robert M. Morgenthau, the Manhattan district attorney, who two decades ago led a wide-ranging sales tax sting aimed at New York's most prominent jewelers, has collected about $22 million in unpaid sales taxes since he began investigating high-end art tax transactions in early 2002. His art investigation, according to a person with direct knowledge of the matter, focused initially on Mr. Kozlowski and Mr. Allbritton, because both used the services of an erudite, soft-spoken East Side art dealer named Alexander Apsis.

But the investigation soon spread to other Manhattan dealers and brokers, and focused briefly on Mr. Hurst's art transactions. According to a law enforcement official with knowledge of Mr. Hurst's transactions, he had successfully avoided paying more than $2 million in sales taxes on art until the Tyco investigation brought the unpaid taxes to light.

Mr. Morgenthau's office indicted Mr. Kozlowski in 2002, accusing him of evading about $1 million in sales tax, and has since leveled additional fraud charges accusing him and another executive of looting $600 million in cash and stock from Tyco. Mr. Allbritton, Mr. Hurst and Mr. Apsis have not been charged with any wrongdoing.

Mr. Kozlowski's lawyers have said repeatedly that their client, who is facing a second trial after the judge declared a mistrial in the first, is not guilty of any crimes. A law enforcement official said Mr. Hurst paid his outstanding sales taxes to Mr. Morgenthau's office shortly after the Tyco investigation started; Mr. Hurst said in an interview that he had no outstanding sales tax problems but declined to discuss the matter further. A lawyer for Mr. Allbritton said his client's art dealings had been reviewed by attorneys who determined that no tax payments were necessary.

Mr. Apsis declined to comment on Mr. Morgenthau's investigation. He has told at least one acquaintance that he never discussed sales tax evasion with any of his clients and does not believe he did anything wrong. Even so, the client lists of Mr. Apsis and other dealers - rosters filled with the names of powerful, wealthy people who do not want their names known - have become a source of anxiety among the chauffeured set, reminiscent of the little black book held by Sydney Biddle Barrows, a k a the Mayflower Madam, when she was charged with (and later fined $5,000 for) running a top-tier, but illegal, escort service in 1984