Ace Gallery Founder Arrested on Embezzlement Charges

LOS ANGELES — The art dealer Douglas Chrismas, who has a decades-long track record of discovering major artists and an equally lengthy history of not paying artists in full for their sales, has been arrested on charges of embezzlement.

Chrismas, 77, surrendered to F.B.I. agents on Tuesday and was released on a $50,000 bond. He has pleaded not guilty to the charges, which carry a sentence of up to 15 years in federal prison. A trial date has been set for Sept. 21.

The indictment, filed on March 16, 2020, was unsealed on Tuesday. In it, Chrismas is accused of redirecting about $265,000 in funds from the bankruptcy estate of Ace Gallery, which he opened in Los Angeles in 1967, to a separate corporation that he owned.

Chrismas’s bankruptcy lawyer, Jonathan Shenson, did not respond to requests for comment this week and it was not clear who was representing Chrismas in the criminal case.

Chrismas organized important early exhibitions at his gallery for such artists as Robert Irwin, Michael Heizer, Tim Hawkinson and Mary Corse. But many of his relationships with artists soured over his missing payments to them for sold artworks and his failure to return unsold pieces. The gallery filed for bankruptcy in 2013.

He continued to run the gallery until 2016, when a reorganization plan was approved by the court. A bankruptcy trustee, Sam Leslie, was placed in charge of the business, which then consisted of a Beverly Hills branch and a mid-Wilshire location. (Both spaces have since closed.)

Leslie, who has a specialty in forensic accounting, has spent much of his time at Ace sorting through the gallery’s financial transactions and fine art inventory to figure out who was owed what. According to a report Leslie filed with the court in May 2016, he discovered that from February 2013 through February 2016, Chrismas had directed about $16.9 million from the Los Angeles business to Ace New York, a short-lived gallery branch that had closed years earlier. Of that sum, the report said, about $4.59 million was diverted to an entity known as the Ace Museum.

Leslie’s efforts to recover those funds for creditors is ongoing. “The bankruptcy case is still open and Sam Leslie is still acting as C.E.O.,” his lawyer, Carolyn Dye, said by phone Wednesday.

Dye also noted that there was a pending civil suit filed by Leslie against Chrismas and other defendants over “these diversions of cash arising from sales of inventory.”

Asked about the difference in dollar amounts between the civil and criminal cases, Dye responded, “You can safely say that the specific criminal charges in the indictment were low-hanging fruit.”

“But in addition to that,” she added, “the Department of Justice was provided mountains of documents that verified the $16-million-plus of cash diversions, including proceeds of sales not paid to artists.”