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Gallery gold
plans upended by fraud probe
by Paul Waldie When New York's
famed Gagosian Gallery was planning an upcoming
exhibition at its Beverly Hills, Calif.,
gallery, One Ton, One Kilo, it needed an unusual
art supply - 100 gold bars weighing one kilogram
each.
The gold was apparently required by California
artist Chris Burden, who planned to remount his
1985 piece Tower of Power. That work featured
100 gold bars arranged in a cone, surrounded by
a dozen matchstick figures bowing, praying or
saluting.
To get the bars, Gagosian director Melissa
Lazarov contacted Joe Frisard, president of
Stanford Coins & Bullion Inc. in Houston, who
had dealt with the gallery before. On Feb. 2,
Lazarov placed the order and wired Stanford
$2.9-million (U.S.). She insisted the gold
arrive at the Beverly Hills gallery by March 4,
three days before the start of the exhibit which
features other works by Burden involving
"figurative aspects of weights and measures."
At first, everything worked like clockwork.
Frisard called up Dillon Gage, a Dallas company
that specializes in precious metals, and it
procured the bars and got them ready for
delivery.
The gold was just about to be shipped when
federal agents raided the Houston office of
Stanford Financial Group, which owns Stanford
Coins. The raid was part of a lengthy
investigation by the U.S. Securities and
Exchange Commission into allegations that
company owner Allen Stanford had orchestrated an
$8-billion fraud. Within hours, the SEC filed
civil charges in Texas and appointed a receiver
to take control of all Stanford Group entities.
The receiver immediately issued an order
freezing all accounts and assets.
Gagosian was stuck. Its gold was ready to go,
but Dillon Gage refused to ship the bars, citing
the asset freeze.
Last Friday, Gagosian's lawyers pleaded with
U.S. District Judge David Godbey, who is
overseeing the Stanford Financial case, and
asked him to lift the freeze just enough to free
the bars. If the gold didn't arrive in time for
the exhibition Gagosian would suffer
"irreparable harm, including but not limited to,
substantial monetary losses and damage to its
reputation in the art community," the lawyers
argued in a court filing.
They noted that the gold deal had nothing to do
with the SEC investigation. "The gold held by
Dillon is not the property of Stanford Coins nor
Dillon Gage as it has been paid for in full by
Gagosian," the lawyers argued.
On Monday, Judge Godbey turned them down along
with dozens of other investors in Stanford
Financial who asked for similar relief. The
judge extended the freeze for at least another
10 days, noting the complexity of the case
(Stanford Financial had operations in 130
countries including Canada, and more than 30,000
clients). The receiver, Dallas lawyer Ralph
Janvey, told the court he understands the
concerns raised about the freeze and he pledged
to do his best to unlock some assets.
But that's not much help for Gagosian. The
exhibit is supposed to run from March 7 to April
4 and it is not clear when or if the gold will
be released. In a brief interview, Frisard said
Stanford Coins has shut down and the matter is
in the hands of the courts. Officials at Dillon
Gage were unavailable for comment.
Michelle Pobar, a spokeswoman for Gagosian, said
the gallery still plans to go ahead with the
exhibit, although it may be delayed. "We're
certainly hopeful that it opens this Saturday,"
she said yesterday. "But we don't have an answer
on anything quite yet." |