The Double Dealer

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.”

A week before Acquavella’s money was due, he called Cohen and asked after his Picasso. Cohen promptly returned it. “I’m amazed I got it back,” Acquavella says. “I think he thought I was going to make so much noise that I might have caused the whole scene to explode.”

On Halloween, Michel telephoned Jean-François Gobbi, a dealer in Europe, offering a Monet, Le Repos Dans LeJardin Argenteuil, which happens to belong to the Metropolitan Museum. He said it was Nazi war plunder and that the Met had agreed to sell it for $5 million, with two thirds to go to the claimants. Michel said that he had found a buyer at $6.8 million. If Gobbi put up the dough, they would split the profit. Like most good cons, the back story – that the painting was tainted goods – was correct; it had been written up in the Boston Globe. Several days later, Gobbi wired $5 million to Cohen’s lawyer.

On November 2, Muller Sr. arrived in Manhattan, curious about his money. Cohen put on the perfect act. “My father was received lavishly by Michel, who had his own chauffeur and apparently was taking a chartered plane to Martha’s Vineyard every weekend,” Muller says. “He proudly took my father to his new space.”

The gallery was under construction between Fifth and Madison on 69th, alongside Cartier and opposite Porthault. Cohen chatted with the workmen. “So my father was rather impressed,” Muller says. “He thought, Okay, there’s no cause for concern.”

Carrie Chiang of the Corcoran Group confirms only that Michel Cohenhad made an offer on the retail space, which was on the market at $300,000 a year.

“Michel had his own chauffeur and apparently was taking a chartered plane to Martha’s Vineyard every weekend,” Martin Muller says. “So my father was rather impressed and thought, okay, there’s no cause for concern.”

Meanwhile, Cohen was hard at work. On November 3, he also got Manhattan dealer Bill Beadleston to put up money for half the Met’s Monet, a painting of a bridge. “At least it wasn’t the Brooklyn Bridge,” Beadleston says sheepishly.

Up to that point, Cohen could have been merely an overly ambitious dealer who was out of his depth. But with the scheme to sell the Met’s Monet – and the gumption to sell it Producers-style to two different buyers – Cohen crossed the line into outright fraud.

Not that he was lessthan completely composed in public. Michel and his wife, Ulrike, along with their two children, watched the Thanksgiving parade from the Central Park West apartment of James Goodman, who has a gallery on East 57th Street. Andrew Fabricant of the Richard Gray Gallery was there with his kids, and neither dealer noticed anything untoward about Michel.

In mid-December, Sotheby’s threatened to sue if it was not repaid. Cohen wrote two checks, one for $3.75 million, one for $1 million (he would stop payment on both in January). But on December 22, he arranged for the Richard Gray Gallery – which happens to occupy Cohen’s former space – to deliver a $2.1 million Picasso so that he could show it to a client. Cohen never returned the painting – or paid for it.

In the first week of January, Cohen approached the dealer Ruth O’Hara with a proposition. He could buy a Picasso in Japan for $1.9 million and sell it right away for $2.3 million.

O’Hara didn’t care for the deal. “He looked a little spaced out,” she says. “He was disheveled.” She says she asked a friend: “Is he on drugs?”

On January 21, an art consultant visited him in his Manhattan apartment. She was startled to walk into what looked like a huge struckstage set. “The place was really, really empty!” she says. “There was no furniture. There was a dining-room table with hundreds of transparencies on it. The kids were crying, his wife was angry, and he was just scrabbling through this heap of transparencies. He was so jumpy and so nervous.”

He showed up at her office a couple of days later. “He came running in and poured this group of transparencies onto the coffee table and was rummaging through them, like it was a bargain-basement sale,” she says. “He kept saying, ‘What about this? What about this? What about this?’ “

A couple of days later, on January 23, a story – just three dozen lines – was posted on beneath the headline sotheby’s sues malibu art dealer for $10 million. Both Michel and Ulrike were named. A few days later, Michel Cohen was gone.

The MSNBC story was read with understandably keen interest by Paul Kantor, the tart-tongued é minence grise of Los Angeles dealers, who had been Cohen’s mentor. Kantor was digesting the fact that the $6 million he had recently paid Cohen made him the proud possessor of three Picasso transparencies. He called the Art Fair in Palm Beach, which both Acquavella and Beadleston were attending. Cell phones began to vibrate, faxes hummed, and e-mails blipped as dealer after dealer checked in, astounded to discover the breadth and sheer gall of Michel Cohen’s swindle. The numbers ratcheted upwards. $15 million! Twenty! Thirty-two! Thirty-seven!

Michael Cohen – he would always be Michael in California, Michel in more cosmopolitan New York – arrived in Oakland from Paris some twenty years ago. He hustled prints – Dali, Leroy Neiman, big-edition Picassos and Chagalls – on the streets. “Very quickly he was selling more expensive prints,” says the dealer Serge Sorokko. “He brought over his mother and sister and set them up in San Francisco. He was an amazingly hard worker. And he has a photographic memory.”

Michael Cohen had charm and a knack for getting close to the well-to-do. Among his first supporters were the Galoob brothers, former toy manufacturers and collectors of twentieth-century American art, which Robert Galoob says Cohen advised them on. “He was a neat guy,” says John Tompkins, whose older brother founded the clothing behemoth Esprit. “He pointed out a bunch of things for me to observe in art. And he didn’t talk down to you.”

Cohen adored his mother, moving her from France to foggy San Francisco first, thento La Jolla, then Hawaii, but she gave up very, very little about his past. He let it beknown that she was a pied noir, a French North African, and that his seldom-mentioned father was a cabdriver in provincial France. Cohen said he never went to college but that as a teenager he had been a national whiz at selling encyclopedias door-to-door.

Soon Cohen graduated from prints to paintings. “He came by my gallery in the early eighties,” says Martin Muller. “He bought a painting. That’s the way you seduce a dealer – you buy work.” In 1988, he took over a fourth-floor space on Sutter Street, an area thick with galleries. He was living pretty well, sailing a big sloop in the bay and doing tae kwon do, but he was tiring of San Francisco’s limited horizons and at the end of the eighties moved to Malibu.

It was in L.A. that Marc Richards, himself a dealer, first met Cohen. “He quickly took to the resale market, which was booming, and played it as well as anybody I know,” Richards says. Essentially, Cohen was churning paintings the way he had churned prints. “He would flip things for 5 percent,” says a Los Angeles dealer. “He would have high volume, low overhead, and low profits. But a lot of business.” Manny Silverman, another L.A. dealer, was struck by his pace. “He bought a Joan Mitchell and drove it from La Jolla,” Silverman says, selling the piece within 24 hours.

“He was a risk-taker. He would go out on a limb and buy a million-five painting,” a dealer says. “He treated art as a commodity. He knew in his mind everything that had sold, when it had sold, and the price; it was almost like baseball cards.”

In 1993, Cohen met Tanya Bonakdar, a slender, fine-boned Briton with a consuming interest in the newest art. Cohen fell in love and moved to New York with her.

He opened a gallery at 1018 Madison. Tanya broke off their affair after a couple of years, but he funded a new gallery for her, closed his own, and returned to his forte, selling paintings dealer-to-dealer. Then he caught a glimpse of every runner’s dream: the truly big deal.

Marc Chagall died in1985, leaving a huge archive of late work to his known heirs. Then another claimant popped up: David McNeil, an illegitimate son by a model, who secured 10 percent of the hoard. McNeil had been financially supported for some years by Jean-François Gobbi, who got to manage McNeil’s birthright as a quid pro quo. Gobbi reputedly had an apartment in Venice on the Grand Canal and a mighty yacht to go along with his reputation as a tough operator. In 1995, the Chagall estate offered another slice of the archive for sale. The heirs approached Sotheby’s. The works “were all from the last fifteen or twenty years ofhis life,” says David Nash, who put together Sotheby’s proposal. “But Mr. Gobbi came back for a second helping. He exceeded our offer by far.” His bid is said to have been $65 million.

That same year, Cohen met Gobbi in Miami. “He was always on Mr. Gobbi’s yacht, and he was very impressed by Gobbi,” Muller says. In 1997, Gobbi offered Cohen a bite at the Chagalls. So he contacted the Mullers for backing. “We were first approached for a hundred-million-dollar package deal,” Martin Muller says. “We were thinking to put together a pool with some of our friends. First a deal for fifteen to twenty million, then the idea to do this in several installments, because who needs to put 800 Chagalls on the market at once? Of course, Michel wanted to do only the whole thing.” Swiss caution prevailed. Cohen swiftly found another backer, a Los Angeles real-estate investor. They bought only 80 Chagalls, but Cohen was now a player, too.

Cohen, while keeping up his gallery on Madison, returned to Malibu that year and married Ulrike, a German dealer. “She had been in Colombia. She had dealt Boteros. And she had bought a Diego Rivera for some heavy hitter in the Caribbean,” recalls Louis Stern, another dealer.

Cohen bought a white house overlooking Point Dune, the northeasterly tip of Santa Monica Bay. “He wanted the best things in life,” says Marc Richards. “He would buy Mercedes after Mercedes. He would change them every three months. We would laugh. But nobody saw any harm in it.”

Life in Malibu was grand. Cohen bought the adjoining plot of land, and Ulrike followed rich-woman pursuits, riding horses and taking yoga classes. They doted upon their children, Chloe and Noah. “She said she has one damn nanny after the other,” says an Austrian visitor, Eva Bockl. “She was recommended this nanny at her yoga club who had worked for Madonna. So she took her. She gets $1,500 a week.”

But Ulrike increasingly complained that she felt isolated in Malibu. “He didn’t have real friends,” Marc Richards, who had been married at the Malibu house, says. “Not even me. There was a hole in him. He tried to fill it with money.”

“I remember going out there with a friend. And we were amazed by this house,” says Richard Polsky, author of the Art Market Guide. “We looked at each other. I said, ‘I don’t get it! We both work pretty hard, we’re pretty good at this. But this guy’s on a different level.’ My friend said, ‘For the first time in my life I feel depressed. Like a loser! How does this guy do this?’ “

“I think he had a bit of a buying addiction,” says David Tunkl, a private dealer in Los Angeles. “I don’t think that he’s a dishonest guy. And I don’t think people in my business should too much take the high road. I think we have all been in a ‘robbing Peter to pay Paul’ situation at some point.

“He had his hands in so many things at once,” Tunkl says, “that for me he lost the whole feeling of being an art dealer. He was a merchandiser.”

“I would look at a painting and say, ‘How much do you want for it?’ And he’d say, ‘Well, I paid three hundred. Give me a hundred and seventy-five,’ ” Polsky says. “It didn’t add up!”

It did for some. Marc Richards had started Cohen trading stock options in New York in 1993. Soon he was an addict sitting with an old-fashioned electronic ticker watching where the stocks were at. “He used to talk to you and stare at that thing transfixed,” says someone who knew him then.

“Three people bought that painting,” dealer Paul Kantor said tartly of a Picasso he lent money for. In the end, did he feel sorry for his former protégé or angry? “Angry?” he retorted. “He stole $6 million from me.”

“I met him at an opening,” a broker says. “Do you know anything about trading options? Ten would be a lot. He told me that he bought a thousand.” Which meant Cohen was risking hundreds of thousands of dollars a throw.

The broker took over Cohen’s account but found him needy. “I literally would speak to him ten times a day,” he says. “People in the firm would yell across the room ‘Michel! Michel!’ They thought Michel was my girlfriend.”

“He was great! Fantastic!” says Damien Hirst, the British artist who had his first one-man show in Cohen’s gallery in 1992. “Michel used to have, you know, one of these little boxes. Stocks and shares and things. He was absurd! While we were having breakfast in a café he lost a hundred thousand pounds.

“Tanya got really upset. She said, ‘We could use that money to start my gallery. Money you just lost over coffee and breakfast,’ ” Hirst chortles. “Eggs over easy!”

The problem was that Cohen never mastered the game. “Michel just wasn’t good at it,” the broker said. “Options move very, very fast. It’s a very, very narrow window. You have to be careful about giving advice. People in my firm were paranoid that this guy might sue you. It really wasn’t a good trip.”

Cohen took a breather from the market in the late nineties. “Up to the end of 1999, he always paid very sharply on time,” Martin Muller says. But he told a dealer that in early 2000, he had gotten into commodities.

“He was dealing through a few different futures companies, and he had an account here. We had his money out,” says Joe Murphy, CEO of Refco, which is the biggest trader in the world aside from the banks. “And he was trading.”

“He came to us as a very high-net-worth individual,” Murphy goes on. “He had plenty of money, and he opened an account to speculate in the futures markets. And he did okay for a while. The assumption was that it was always his money, of course.”

What Murphy didn’t know was that though Cohen always seemed liquid, much of the money was on a float from his art deals. “He needed cash,” says an international dealer. “So if I gave him a million-dollar painting, he would first ask a million two. If no one responded, he would try to break even. Then he would sometimes sell it for $800,000. Everyone in the world will pay $800,000 for a painting that’s worth a million.”

But with the float, the customary grace period on payment, Cohen could turn a loss into a short-term gain for himself – having the $800,000 in his trading account.

“Eventually he just obviously overextended himself. It’s a daily market, so you know immediately when somebody doesn’t have money, and you shut him down,” says Murphy. Robert Galoob, who has known Cohen as long as anybody in the U.S., sees his flight as a gambler’s fugue. “You go on and on and down and down,” Galoob says. “You can’t stop yourself.”

The contours of the cohen case are now defined. The vanished art has mostly popped up again – Chagalls in galleries, the Richard Gray Picasso (the insurance company made the gallery whole) on the wall of a ponytailed California computer mogul – and is likely to remain in the hands of whoever bought it in good faith. The dealers smolder, but their abhorrence of public disclosure makes it unlikely their handshake culture will be disturbed.

“Michel Cohen was an anomaly,” Leslie Feely, a private dealer, says defensively.

Paul Kantor’s West Hollywood house is a warm pink. When I went to ask the doyen of California dealers for some insight into Cohen’s self-destruction, we had tea in the dining room. Behind me was a red-and-blueMirò sculpture. Even at over 80, Kantor retains a formidable presence with a wave of snowy hair, pink skin, and icy blue eyes.

“I was his taste buds,” Kantor said of his relationship with the runner. “I lunched with him three times a week at Morton’s. He would always have five or six transparencies.”

“I never picked up the check. Not once!” Kantor added. “I wanted to see if he would say something. He never did.”

I was reminded of a comment Marc Richards made about Cohen’s vulnerability. “He was misused by his backers, “Richards complained. “He would go halves on the profits but eat all the losses.”

“It was a pyramid,” Kantor admitted of his loans to Cohen. Even a seasoned hand like Paul Kantor would learn the hard way the truism about free lunches.

We moved into the drawing room. The walls were hung with Picasso, De Kooning, Yves Tanguy, Arshile Gorky. Kantor settled down. “I didn’t realize how many people he had been dealing with,” Kantor went on. “Nobody realized. He kept it all in his mind.”

Kantor has never laid eyes on the actual Picasso she thought he bought from Cohen and has no idea where they might be or to whom they actually belong. Cohen sold him Femme Dans L’Atelier in March. “Three people bought that painting,” he said tartly.

In late January, Cohen was still trying to get a chunk of money from him. “It was the continuation of all kinds of deals,” Kantor said. “I’ll give you half a picture; you give me a quarter. You buy, you sell, you trade.”

Kantor got up and adjusted a Picasso, which was askew on the wall. Sounding oddly serene, he talked of visiting the Cohens in Malibu. Emboldened, I asked whether – when all was said and done – he felt more sorry for Michel Cohen or angry.

“Angry?” he retorted. “He stole $6 million from me.”

How in the world could Michel Cohen have bamboozled cagey old birds like himself and Ernst Beyeler?

Kantor looked me full in the face. He wore a seraphic half-smile.

“Greed,” he said, lightly. It was as if he had drawn the word on the air in smoke. “That’s the obvious answer.”

The Double Dealer