Trove of Missing Art Heads to Auction

A Henry Moore sculpture and a Rufino Tamayo painting are among recovered art works that may be auctioned at Sotheby’s

By Kelly Crow

Former Banco Santos president Edemar Cid Ferreira once covered the walls of his São Paulo home with Man Ray photographs, Louise Bourgeois prints and paintings by Jean-Michel Basquiat, Francis Picabia and others. But when Brazilian authorities arrested Mr. Ferreira in 2006 for an alleged $1 billion money-laundering scheme, the walls were bare.

The vanished collection set off a global scavenger hunt, with investigators and creditors chasing leads long after Mr. Ferreira was convicted of money – laundering and sentenced in federal criminal court in Brazil to 21 years in prison. Mr. Ferreira has appealed the case and declined, through his lawyer, to comment.

Mr. Ferreira, the president of Banco Santos, during the World Economic Forum in Davos, Switzerland in 2004. More art once owned by him has been recovered. Photo: Daniel Ackern/Bloomberg News

This month, U.S. authorities announced a breakthrough, saying they had rounded up 95 works Mr. Ferreira once owned that together are worth at least $10 million. The art was in warehouses across France, Panama, England and the Netherlands, according to the U.S. Attorney’s Office for the Southern District of New York. Two paintings in the group were in galleries in New York.

Joon Kim, the Acting U.S. Attorney, who said Mr. Ferreira’s art had been “used to mask an audacious criminal scheme,” signed documents turning the trove over to a Brazilian judicial administrator handling the estate of Banco Santos, which failed in 2005.

The bank’s estate, which is seeking to compensate creditors, plans to enlist Sotheby’s to auction some of the works, said Arnoldo Lacayo, a lawyer with Sequor Law, a Miami firm helping the bank’s estate track down Mr. Ferreira’s assets. A Sotheby’s spokeswoman confirmed that the auction house has been asked to review the works for potential sale.

Major pieces include Henry Moore’s “Woman,” a life-size bronze figure that had been stored in France, as well as Rufino Tamayo’s abstract view of a couple, “Casal de Marcianos 1975 (Two Figures),” which was stored in Florida. There also is a Lucite cube sculpture by Anish Kapoor and works by Brazilian mainstays Adriana Varejão, Vik Muniz and Jac Leirner. Among the older works is an etching by Eugène Delacroix.

The fate of Helen Frankenthaler’s 1965 blue-and-gold abstract, “Sea Strip,” offers a glimpse into the circuitous path of some of the art. Mr. Ferreira paid Christie’s $197,900 for “Sea Strip” in late 2004 —a year before his bank failed and a time when authorities said he was starting to ship crates of art to warehouses in Europe for safekeeping. Later, a friend of his wife sold “Sea Strip” to Edward Tyler Nahem Fine Art in New York for an undisclosed sum. John Cahill, a lawyer for the gallery, said Mr. Nahem had been told that the painting was from a corporate collection.

Once alerted to its true origins, Mr. Nahem got into a title dispute with the bank’s estate, Mr. Cahill and Mr. Lacayo said, because the dealer had bought the work in good faith. Both sides said they have since reached a settlement to sell the work jointly. Right now, the Frankenthaler is the only recovered work that isn’t immediately headed to Sotheby’s, Mr. Cahill said.

Before this month, only a handful of works from Mr. Ferreira’s collection had been found and returned—including a Roman statue and Basquiat’s 1982 “Hannibal,” a skull portrait on an orange background. The work, with its dark slashes, spiky lines and splotches of bright color, is considered a signature piece by Basquiat, who started out as a graffiti artist. Mr. Ferreira bought the painting in 2003 and had it shipped from the Netherlands to a New York warehouse in 2007 after his conviction, authorities said. U.S. Customs took a closer look when the work arrived because its declared value was $100.

Jean-Michel Basquiat, ‘Hannibal,’ 1982 Photo: Interpol Washington

Last fall, Sotheby’s helped the bank’s estate sell “Hannibal” to Japanese billionaire Yusaku Maezawa for $13 million.

“Hiding illicit proceeds in art happens all the time,” said Mr. Lacayo of the asset-recovery firm helping the bank’s estate. “At least in this case we’re unraveling it.”

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