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The Double Dealer

High-end gallery owners all over the world used Michel Cohen to sell their Picassos and Chagalls -- secretly -- to each other. Then he disappeared with nearly $100 million of their money. Had they trusted the charming Frenchman too much? Or their competitors too little?


Family man: Noah, Ulrike, Michel, and Chloe Cohen in their family  

It happened that Bill Acquavella was not in the sleek gray townhouse on 79th Street that serves as his gallery last fall when Michel Cohen took the Picasso. Deux Enfants, a portrait of two of the artist's children, Paloma and Claude, is a $2 million to $3 million painting, so Acquavella was understandably a bit miffed that one of his staff had allowed Cohen to carry the painting off, leaving only a promise to produce the money within 60 days.

"I called up Michel and said, 'Look, I'm not very happy that he gave you this time to pay,' "Acquavella says. " 'And I don't want to have to be chasing you around. So please be sure you get the money on time.' "

A few days later, Cohen called on a private dealer with offices a few blocks downtown from Acquavella and offered him a half-share in the painting. The dealer, who sits behind a glimmery desk that looks as if it had been carved out of amber in an office chockablock with paintings and bronzes, knew the Picasso hadn't been paid for. "Michel never owned paintings," he says. "He takes a painting from him; he carries it to him. That was his job."

But the private dealer liked Deux Enfants, and agreed to take the share, on one condition: He wanted it in his possession. There was no particular reason, just that Cohen had seemed a bit antsy. "Maybe I was a little wondering," he says in accented English. "I said it will be safe with me."

Not long after, Michael Findlay, formerly with Christie's but now with Acquavella, chanced to drop by. "That's our Picasso!" Findlay said, surprised to discover Deux Enfants in the dealer's offices.

But Acquavella wasn't bothered when he heard. "It was fine," he says. "He had the right. He had bought it, and he wasn't late yet."

Acquavella might not have been so sanguine if he had known that, by selling the Picasso to Michel Cohen on terms, he was being unwittingly sucked into a record-setting art scam. For Cohen, who was a familiar character to name dealers all around the world, had created an intricate network of overlapping art deals to cover mounting losses from his other trading addiction -- the stock market. By the time Cohen disappeared a few months later -- art-world rumors have him hiding out variously in Cuba, Paris, and (most recently)Costa Rica -- the swindle would have saddled a handful of secretive, high-rolling gallery owners and auction houses with losses totaling from $60 million to $100 million.

Slight, dark, hyperkinetic, and famously sweet-natured, Michel Cohen is a charming Frenchman in his middle forties, based in New York and Malibu, who had established an impeccable reputation as a "runner" in the high-end art world. Occupying a special position in the complicated geography of New York art dealers, runners have the connoisseurship to be players but not the capital to hold expensive pieces until their value can be realized. They earn their orange-peel-thin commissions by making connections between buyers and sellers, even if it's just a matter of carrying a photographic transparency of a picture from one dealer to another, who might -- unbeknownst to both -- be across the street, or even in the same building.

Cohen was among the most active and respected of runners. "For me, Cohen was very useful," says Martin Muller, a San Francisco dealer with extensive business ties to Cohen. "He would know what we wanted and find it. Or he would find a client for something of mine. He allowed significant inventories to change hands."

And in what now seems like an all-too-telling choice, he called his company Pentimento -- the Italian word for repentance, which also refers to those traces of a painted-out figure that emerge as a canvas ages. "He was someone who did business over and over again with all of us," says Acquavella.

Cohen's value to other dealers -- and his ability to eventually betray them -- was based on their penchant for secrecy. Heavyweight dealers jealously guard the small circle of clients their business depends on. Ever the silken go-between, Cohen facilitated sales while protecting each dealer's exclusive relationships; thus it is that in the mortifying aftermath of the Cohen affair, appalled dealers have been protesting that theirs is a "handshake culture" and "a system of trust."

Secrecy and handshake credit suited Cohen perfectly. But it is still not clear whether he had been planning to bite the hand that fed him all along or had merely fallen so far behind that he had to take drastic action. Whatever the case, he was looking for big bucks when, in March of 2000, he lunched with Martin Muller and his business-partner father at Miami's Smith & Wollensky. "He didn't want to buy one painting here, one painting there," the younger Muller says. "It was too much hassle. He wanted a more significant sum of money." At lunch, Cohen announced that he wanted to buy and sell in bulk. He pitched a $100 million deal.

In the end, the Mullers only lent Cohen $4 million to buy a Picasso (not Acquavella's Deux Enfants), to be repaid in July. But Martin was surprised by his manner. "Michel had always been extremely friendly and warm, but I found him cooler," he says. "He was constantly on the telephone. Not two or three times. Twenty times!"

The Mullers weren't the only ones Cohen had put the touch on. In April, Sotheby's lent him $1.3 million to buy a Picasso; in May, $2.5 million for a Chagall; in June, $1 million followed for a second one. In July, the auction house came through with $1.5 million for another Picasso, a loan that was upped to $3.6 million a bit later for another Picasso. He put up ten artworks as collateral, but his handlers at Sotheby's took possession of only three and apparently didn't check up on the whereabouts of the rest. Why should they? Over the years, Cohen had done millions in business with the house, and there were other incentives. He was to repay Sotheby's at two points above prime, plus a share of the profits. A sweet deal for the auction house, which was itself under financial stress from the recent price-fixing scandal.

In August, Cohen bought a Picasso from Swiss dealer Ernst Beyeler. "We had done business. He was nice -- and quite correct," Beyeler says. "The price was $3.9 million," says Catherine Couturier, Beyeler's Paris rep. The painting was shipped to New York. "Usually, it stays in the warehouse until the people pay," Couturier says, "unless they are people we know very well. Michel I knew. And he took the painting from the shipper."

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