The Great Art Fraud was televised by the BBC in August 2025, documenting one of the biggest art frauds in art market history. British-born contemporary art dealer Inigo Philbrick was the perpetrator, who emerged as ‘an overnight sensation, selling artworks to the world’s richest collectors in a booming market’. In 2006, Philbrick began an internship at London’s White Cube gallery, rising to become head of secondary market sales there; and in 2011 established his own London-based gallery dealing in the resale market of contemporary art, later opening a second gallery in Miami. By 2019 he had defrauded multiple victims of $86m USD.
Philbrick’s fraud involved what is commonly known as ‘financialisaton of art’, whereby work is bought solely as an investment asset for profitable resale. Philbrick sold and resold works he did not own, but had been consigned to his possession by clients, without their knowledge or consent; often the same work was sold simultaneously to multiple purchasers; and high-value consigned works were pledged as collateral to secure huge personal loans, on which he subsequently defaulted, triggering lenders’ rights to seize the guaranteed asset. When clients expressed concerns, and pressed for authoritative documentary evidence of activities, Philbrick gave them unsigned or forged documents including fake valuations.
Many of these fraudulent activities were perpetrated in the US, where most of the victims were located. In 2019 Philbrick absconded, after defaulting on a $14m USD loan. In 2020, the FBI eventually found him living in the South Pacific Island of Vanuatu: he was arrested, flown back to the US, and held in custody pending trial. The indictment in New York City was for conspiracy to commit ‘wire fraud’ – one offence embracing all Philbrick’s victims.
Most countries worldwide have simplified criminal prosecution of lengthy and complex frauds of multiple victims, by requiring proof only that electronic or telephonic methods were used to defraud. Wire fraud in the US involves using any form of telecommunication, or through ‘writings, signs, signals, pictures or sounds’, for the purpose of executing a fraudulent ‘scheme or artifice’, includes depriving victims of the ‘intangible right of honest services’, and on conviction carries a maximum prison sentence of 20 years.
In 2022, Philbrick pleaded guilty, was sentenced to seven years imprisonment, and ordered to repay victims. The prosecutor, US Attorney Damian Williams, said that Philbrick’s prison sentence ‘was meant to send a message to anyone who facilitates fraud in the art market that they will face serious consequences’. Philbrick was released in 2024, after serving four years in a US federal prison. Most victims have yet to receive redress, and many currently continue to pursue civil lawsuits against Philbrick to recover their artworks and/or compensation for financial losses – demonstrating that fraud can be both a criminal offence against the state, and a wrong separately actionable by victims in civil courts.
In civil actions, the standard or threshold of proof by victims (that they were defrauded) is lower than in state criminal prosecutions: proof in civil cases requires evidence of fraud on a ‘balance of probabilities’; proof in criminal cases requires evidence of fraud ‘beyond reasonable doubt’. In other words, civil claimants must prove it is ‘more likely than not’ that fraud has been perpetrated; whereas criminal convictions require proof of certainty that fraud has occurred. Moreover, even if prosecutions fail to convict alleged criminal fraudsters, civil lawsuits against them can succeed – and often do.
Evidence of Philbrick’s nefarious activities were difficult to trace and reveal, because they were hidden through layers of limited liability companies, many of which were registered overseas. The expertise and experience of the FBI, however, working together with victims, enabled unshakable evidence to be harvested. Accordingly, when confronted with such solid proof, Philbrick’s attorneys doubtless advised a plea of guilty, instead of mounting a defence hiding behind the ‘veil’ of his many layered companies – pleading it was separate legal entities, not Philbrick, that had behaved fraudulently.
In most countries, limited liability companies are treated as legal entities separate from their owners, who are generally not personally responsible for business failures. But there are notable exceptions, where the ‘corporate veil’ is legally lifted and owners can be held personally responsible for actions, including: signing personal loan guarantees; failing to meet their financial obligations to creditors during insolvency; unlawfully distributing shares of profits; or breaching duties owed to the company, especially by insolvent or deceitful dealing. In the US, for decades the largest art market by value worldwide, legal proceedings against dishonest dealers are most prevalent. Two cases ended recently, where dealers were sentenced for being personally responsible for fraudulent trading through their companies.
Douglas Chrismas, a prominent Los Angeles-based art dealer, was indicted for embezzling from his bankrupt company, of which he was ‘trustee and custodian’. As explained by the prosecutor, ‘Instead of performing his fiduciary duty and properly managing the gallery’s bankruptcy estate, this defendant chose to use funds that belonged to the creditors of the gallery to make them whole … [his] sentence provides a just punishment for these crimes, which were brazenly undertaken by a thief who gamed a system designed to protect those in financial desperation’. In January 2025, Chrismas was sentenced to 24 months in federal prison, and ordered to pay $12,809,192 USD in restitution to gallery victims.
Lisa Schiff, a self-styled art advisor specialising in contemporary and modern art, traded through her limited liability company registered in New York State. Schiff was prosecuted for defrauding company clients, in connection with the purchase and sale of approximately 55 artworks. In March 2025, Schiff was sentenced to 30 months in prison, ordered to pay forfeiture of $6,408,538 and restitution of $9,147,789 to client victims.
In the UK, meanwhile, a limited liability company dealership currently faces legal challenges from aggrieved clients claiming they are owed hundreds of thousands of pounds. Many artists allege they are owed payment for sales of their consigned works, and some collectors demand repayment for purchases of works they are yet to receive. Lawsuits may be filed against the company and/or, if there are valid grounds for its corporate veil being lifted, the owners personally.
Most art dealers trade through limited liability companies, and many believe they are not personally liable for corporate wrongdoings – as is often assumed by their clients, who invariably consider themselves legally impotent – but: It ain’t necessarily so.
© Henry Lydiate 2025