Dreier loses $33M art collection in wake of Ponzi scheme

NEW YORK (AP) – Eighteen contemporary artworks have been transferred to a hedge fund victimized in a massive $400 million fraud scheme, the Manhattan U.S. attorney’s office said Monday.

The works by such boldface artists as Andy Warhol, Mark Rothko and Damien Hirst had belonged to Marc Dreier, a once-prominent Manhattan lawyer whom prosecutors called “the Houdini of impersonation and false documents.”

Dreier is serving 20 years in federal prison after pleading guilty to money laundering and other charges in 2009. The scheme involved the sale of hundreds of millions of dollars in fake promissory notes to hedge funds.

U.S. marshals turned over the works, valued at some $33 million, to New York-based Heathfield Capital Limited.

Some of the transferred works include Hirst’s Elaidic Anhydride (hot pinks spot painting), Rothko’s Untitled and Warhol’s Jackie.

In July, federal Judge Jed Rakoff upheld Heathfield’s right to the artworks that Dreier had pledged as security to finalize a deal, calling the fund the “last and largest victims of Dreier’s fraud.”

Heathfield previously transferred $1.65 million in forfeited funds to the government, which will be made available to other victims of the scheme, prosecutors said.

Authorities say Dreier received $670 million between 2004 and 2008 from the sale of fictitious securities, spending much of it on a lavish lifestyle that included millions of dollars worth of art, beachfront homes on both coasts and a yacht.

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AP-WF-08-12-13 1751GMT