Four years ago, the glitterati descended on the grand opening of Perry Rubenstein's new art gallery in Hollywood.
Musician Neil Young, movie producer Steven Tisch and artist Shepard Fairey were among the guests who packed into the modernist space marked by its bold charcoal exterior and expansive white interior. The event spoke to Rubenstein's status as a formidable dealer in the celebrity art world.
But since then, a series of legal disputes has led to a dramatic fall for the veteran art gallerist.
Now, Los Angeles County prosecutors have charged Rubenstein with failing to pay more than $1 million for artwork linked to two of Los Angeles’ most powerful art collectors,
Rubenstein, 62, was arrested late Thursday in Santa Monica on three felony counts of grand theft by embezzlement. In a downtown L.A. courtroom on Friday, Rubenstein pleaded not guilty and was held on $1-million bail.
His attorney, Stephen Sitkoff, blasted the criminal charges.
"We deny all these allegations and look forward to clearing his name and getting his reputation back," Sitkoff said. "There's no criminal conduct on Perry's part."
Rubenstein made his name as an art dealer in Manhattan, where he was a well-known private dealer before opening a gallery in Chelsea. In 2011, he announced his move to Southern California, saying Los Angeles had ascended to the level of other contemporary art meccas such as London and New York.
His gallery opened with a splash, generating buzz both in the art world and in Hollywood. He converted an old warehouse on a hip stretch of Highland Avenue into an airy art space complete with skylights and a distinctive "PR" logo at the entrance. He told the art press he was bringing a New York sensibility to the L.A. art scene.
But around the time of the move, Rubenstein was engaged in art sales that would land him in legal trouble.
One of the charges centers on his sale of a scroll, "The World of Sphere" by Japanese artist Takashi Murakami, to the Eli and Edythe Broad Foundation. The more-than-130-square-foot scroll features a psychedelic scene of flowers and the panda character that recurs in the work of Murakami, the famed pop artist who typically draws on anime and manga characters and motifs.
The scroll is now part of The Broad museum collection but is not publicly displayed.
Michael Salke, an art collector based in Massachusetts, told police he contracted with Rubenstein in 2011 to sell the scroll for $750,000, according to search warrant affidavits filed by LAPD Det. Gary Guevara.
The next year, Rubenstein told Salke that an unidentified buyer offered $630,000 for the scroll, according to the affidavits. Salke signed off on the sale.
Payment for the scroll came in installments, eventually totaling $575,000, but when Rubenstein tried to add $20,000 to his commission, Salke filed a lawsuit, Guevara wrote.
During litigation, Salke learned that the buyer of the Murakami scroll, the Broad Foundation, paid $825,000 for it — far more than Rubenstein had let on, according to the affidavits.
The L.A. County district attorney's office said Friday that Rubenstein failed to turn over the full amount of the sale to Salke.
The two other counts against Rubenstein arise from his agreements with Ovitz to sell two works by Richard Prince that together are worth more than $1 million, prosecutors said. Prince is a renowned pop photographer and painter.
Ovitz, who co-founded Creative Artists Agency before he served as president of the Walt Disney Co., told LAPD detectives that he and his personal curator struck an agreement in 2012 with Rubenstein to sell Prince's painting "Untitled (de Kooning)" (2006), for $650,000, Guevara wrote. The work is one of several works by Prince that mixed the Abstract Expressionist art of Willem de Kooning with photos, including vintage pornography, and painting.
Ovitz agreed to sell to a buyer in Mexico City for $500,000, but more than five months after it was sold in May 2013, Ovitz had yet to receive any money, Guevara said in the court papers. Ovitz's curator instructed Rubenstein to cancel the sale and return the work; Rubenstein said he couldn't reverse it. The piece has since sold a second time in France, the detective wrote.
Shortly after Ovitz greenlighted the sale to the Mexico City buyer, he placed another work by Prince, "Nobody Home" (1992), on consignment with Rubenstein. The minimum price was set at $575,000, according to court papers. Rubenstein received a bid for the work, but Ovitz rejected it.
Months later, Ovitz's curator learned the piece was sold in New York for $475,000 — without Ovitz's authorization — prompting the curator to instruct Rubenstein to "unwind" the sale, according to the affidavits. Rubenstein said he could not.
Rubenstein kept the proceeds from the sales instead of turning the money over to Ovitz, the district attorney's office said.
Rubenstein's financial situation appears to have deteriorated in the years after his swanky L.A. debut, court documents show.
His gallery filed for bankruptcy in 2014, and records list a roster of creditors that includes Ovitz, Fairey and actor Simon Baker, the star of CBS' "The Mentalist."
The bankruptcy filing said the gallery had nearly $1.2 million, mostly in artwork, but owed more than $5.4 million.
Ovitz sued Rubenstein. In a settlement detailed in court records filed last month, Rubenstein agreed to return "Untitled (de Kooning)." Sitkoff, Rubenstein's attorney, said that his settlement should have ended the dispute and that the criminal charges are unnecessary.
Rubenstein's financial problem were compounded last year when a judge ordered him to pay $250,000 to Salke, the Massachusetts art collector.
Rubenstein outlined his finances, which included a $487 monthly fee for his 2014 Mercedes-Benz C250 sedan and a $100 monthly budget for laundry and dry cleaning. He wrote in court papers that he needed a two-bedroom apartment so that he can house his daughters during custody visits. He said he wanted to live near Santa Monica, close to his ex-wife, the prominent art publicist Sara Fitzmaurice.
Rubenstein stated he was under "extreme financial hardship" owing to "the collapse of my business and lawsuits filed against me personally for obligations that the business did not or could not pay."
"I have been rendered penniless," he wrote. "I take full responsibility for this taking place and do not blame anyone else."
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