John McEnroe duped in art scam.

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NEW YORK (Reuters) – Former tennis champion John McEnroe was duped along with investment firms, art owners and collectors and the Bank of America in a sophisticated $88 million art investment scam revealed in New York on Thursday.

Art dealer Lawrence Salander, 59, was arrested at his New York home on Thursday, when he and his gallery were charged with 100 counts, including grand larceny and securities fraud, Manhattan District Attorney Robert Morgenthau told a news conference.

Officials said there are 26 victims of Salander's scheme including McEnroe, who invested $2 million for a half share of two paintings, Arshile Gorky's "Pirate I and II." McEnroe never recouped the money after his share in the paintings was sold to another collector, authorities said.

Morgenthau said the scheme, which lasted from 1994 to 2007, included luring investors who paid cash in exchange for shares of ownership of works of art.

"He sold artwork not owned by him and kept the money and lured investment money in fraudulent investment opportunities," Morgenthau said, adding Salander used the money to fund "an extravagant lifestyle" of lavish parties and private jets.

Some of the scams worked like the plot of the musical "The Producers," which includes a get-rich scheme by overselling interests in a show, Morgenthau said. Similarly, Salander at times inflated the value of paintings to score greater investments that were not returned to investors.

The investigation of Salander, the former owner of Salander-O'Reilly Galleries, is continuing.

Salander faces up to 25 years in prison on the most serious charge. His lawyer Charles Ross did not return a call seeking comment.

Others who lost money included Renaissance Art Investors, a company focused on investment in old master paintings, which lost $45 million, authorities said.

Earl Davis, the son of American abstract painter Stuart Davis, lost $6.7 million, authorities said, while Bank of America lost $2 million after Salander lied about paintings he owned to secure a loan.

Hester Diamond, the widow of late renowned New York art dealer Harold Diamond and mother of Mike D of music group The Beastie Boys, lost $6 million, authorities said.

McEnroe was alerted to the scheme when he learned an art collector owned the same painting he had, authorities said. A spokesman for McEnroe said he was on vacation and unable to be immediately reached.

Most of the artworks, which are yet to be valued, are being held in the custody of a bankruptcy court in Poughkeepsie, New York. Many of the investors named Thursday already have filed civil claims against Salander and his gallery, which filed for bankruptcy and closed in 2007.

(Editing by Michelle Nichols and Bill Trott)

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[YuAndDan 153]

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Art dealer Lawrence Salander, 59, was arrested at his New York home on Thursday, when he and his gallery were charged with 100 counts, including grand larceny and securities fraud, Manhattan District Attorney Robert Morgenthau told a news conference......

The name fits.

[mkg265 2]

So I can invest in art or the stock market anymore?

Why can't people collect art from middle grade artists instead of buying a "share" in a famous painting.

If your that rich, why not put a print on your wall and call it an original.