Prominent LA Art Dealer Convicted of Federal Embezzlement-What Happened?

In a dramatic fall from grace for one of LA’s premiere art world figures, accorrding to mynewsla.com, renowned gallery owner Douglas J. Chrismas was found guilty on Friday of embezzling over $260,000 from the bankruptcy estate of his former Miracle Mile gallery, Ace Gallery. The 80-year-old now faces up to 15 years in federal prison for the three embezzlement counts. In this article we talk about Prominent LA Art Dealer Convicted of Federal Embezzlement.

The conviction caps a sordid scandal that rocked the city’s tight-knit community of art collectors, dealers, and aficionados who had long revered Chrismas and the prestigious Ace Gallery as cornerstones of the contemporary LA art scene for decades.

The Bankruptcy Treachery

According to federal prosecutors, Chrismas’ multi-year embezzlement scheme began in February 2013 when Ace Gallery filed for Chapter 11 bankruptcy but was allowed to continue operating as a bankruptcy estate. As the company’s president, CEO, and court-appointed custodian overseeing operations, Chrismas assumed full control over the gallery’s finances and assets.

However, by late 2015 it became clear to bankruptcy officials that Chrismas had been steadily looting the estate’s coffers through a series of brazen self-dealings to fund his own separate business interests. Among the fraudulent transactions uncovered:

• Chrismas embezzled a $50,000 check drawn from the gallery’s accounts and deposited it into a separate corporation he owned and controlled.
• He redirected $100,000 owed to the gallery from an artwork sale into his own firm’s accounts.
• Another $114,595 owed to Ace from an artwork buyer was instead steered by Chrismas to pay the gallery’s $225,000 monthly rent to keep the venue operational.

It wasn’t until April 2016, nearly three years into the bankruptcy proceedings, that officials finally discovered the extent of Chrismas’ misconduct and a new independent trustee was appointed to wrest control away from him. His federal indictment quickly followed.

An Art World Pariah

For those familiar with Douglas Chrismas’ legacy and the vaunted prestige of the Ace Gallery brand prior to this shocking criminal case, the revelations of brazen financial treachery have proven all the more stunning.

Previously considered not just an elite dealer but also a respected curator and champion of contemporary artists, Chrismas now faces potential prison time and a permanent stain on his reputation within LA’s creative community.

“Douglas Chrismas basically lit his entire life’s work and credibility on fire through these selfish, short-sighted actions,” reflected longtime local art critic Vanessa Malloy. “It’s honestly tragic to see someone throw away such a brilliant curatorial mind and revered eye for new talent over something as banal as greed.”

Founded in 1967, Ace Gallery represented the vanguard of California’s avant-garde scene and helped elevate seminal multi-media artists like John Baldessari, Ed Ruscha, Bruce Nauman and many others to global renown. Over its nearly 50 years in business, the gallery’s lauded collections were cited as heavily influencing the entire region’s Modern art movement.

Those cultural cachet and accomplishments now risk being permanently overshadowed by Chrismas’ criminal misdeeds in the court of public opinion. He betrayed not just the estate’s finances, but the trust of the entire arts community that elevated him for so long.

“We’re talking about someone who had pretty much the bluest of blue-chip pedigrees in this city, at least before all this,” added Malloy. “To pull something like this just reeks of the absolute worst kind of arrogance and privilege.”

An Impending Reckoning

With his September 9th sentencing date looming and remanded to federal custody in the interim, Douglas Chrismas now faces a harsh, isolating reality far removed from the glamorous LA art world he once strode. Unless he can successfully appeal, the 80-year-old dealer could emerge from prison deep into his twilight years – his reputation forever marred.

But beyond the downfall of one individual, the case also underscores persistent integrity and ethical issues that continue plaguing the largely unregulated global art trade. From money laundering and tax evasion to crooked authentication schemes, lack of transparency and oversight have allowed bad actors to exploit the industry in myriad ways.

LA’s own art market, while internationally renowned, has hardly been immune to such scandals and controversies over the years either. One can only hope the harsh spotlight cast on Chrismas’ con serves as a cautionary tale and potential tipping point for finally enacting stricter governance and accountability standards before trust in the entire system erodes further.

Art, at its highest form, is meant to elevate our souls and capture the totality of the human experience in all its sublime complexities. Not rot away stuffed among contraband and corruption inside a federal penitentiary cell. In the wake of this tawdry saga, the entire LA art community now faces its own reckoning over how to weed out the greed and restore integrity to its rightful place among the masterpieces. I sinerely hope you find this “Prominent LA Art Dealer Convicted of Federal Embezzlement-What Happened?” article helpful.