Jeff Koons Accused of Ponzi-Like Scheme in Lawsuit

April 19, 2018, 3:42 PM UTC
Jeff Koons Sued
US artist Jeff Koons poses for photographs during a meeting at the French Cultural Ministry in Paris on January 30, 2018. A year after the terror attacks that struck Paris in November 2015, Jeff Koons said he would give the city a monumental sculpture meant to honour the victims but critics of the project are saying 'no thanks'.About two dozen artists, gallery owners and officials wrote an open letter Monday urging the city of Paris not to install the 12-metre-tall "Bouquet of Tulips" outside the Museum of Modern Art and adjacent Palais de Tokyo, a contemporary art centre. / AFP PHOTO / STEPHANE DE SAKUTIN (Photo credit should read STEPHANE DE SAKUTIN/AFP/Getty Images)

New York’s Gagosian Gallery and Jeff Koons were sued by a collector who accused gallery founder Larry Gagosian and the artist of scheming to exploit demand for his works and using “inappropriate and highly questionable practices” to fund extravagant lifestyles.

Collector Steven Tananbaum sued in New York state court on Thursday over the non-delivery of three Koons sculptures, claiming a “well-oiled machine” that exploits collectors’ desire to own the artists’ works by using incoming money to pay debts. The complaint alleges the defendants take deposits and payments from collectors while continually delaying the delivery of purchased works.

Tananbaum says the gallery and the artist convince collectors to remit an initial deposit of $1 million to $2 million, along with additional payments of the same amount. They promise delivery of sculptures on a given date, only to later delay completion of the works by six months to a year, he claims.

“The archaic system, once all of the obfuscations are stripped away, exposes a garden-variety, interest-free fraudulent financial routine that hearkens the name Ponzi,” according to the suit. “New money is used to pay old obligations, not to mention that the archaic system is one that oversold the artist’s capacity.”

Representatives of Koons and Gagosian gallery didn’t immediately respond to requests for comment.