Notorious Los Angeles art dealer Douglas Chrismas has been arrested on federal charges that he embezzled funds amid bankruptcy proceedings related to his longtime gallery, Ace.
Chrismas, who is 77, is alleged to have embezzled more than $260,000 from the bankruptcy estate while acting as its custodian, according to a statement from the department of justice and the U.S. attorney’s office for the central district of California. Chrismas surrendered to FBI agents on Tuesday morning.
In 2013, Ace filed for Chapter 11 bankruptcy in L.A. and continued to operate as a bankruptcy estate with Chrismas acting as the gallery’s president, trustee, and custodian, giving him access to the gallery’s property. He remained in control over Ace Gallery until April 2016, when an independent trustee was appointed to run the bankruptcy estate and Chrismas was removed.
It was around that time that the alleged embezzlement occurred. A $50,000 check, signed by Chrismas, was drawn against the estate and paid to a separate corporation that Chrismas owned and controlled.
Chrismas also allegedly embezzled $100,000 owed to Ace Gallery by a third party for the purchase of art. Instead, Chrismas is said to have directed the funds be paid to his separate corporation. Another $114,595 owed to the gallery by a third party went instead to a creditor of his corporation, according to the indictment, which was unsealed on Tuesday,
As far back as 2003, in a profile in titled “The Ace Is Wild,” Kristine McKenna wrote: “One of the great mysteries of the art world is how Doug Chrismas keeps on doing what he does.”
McKenna uncovered more than 55 lawsuits brought against Chrismas since the 1970s. “He’s been sued by artists, dealers, collectors, private investors, service industries, landlords, and former friends. He’s been sued under three different spellings of his surname and nine different business names—and this is just in L.A.,” she wrote.
In 2016, creditors leveled numerous charges against Chrismas, including “avoidance, recovery, and preservation of fraudulent transfers,” according to court filings. Afterward, a forensic accountant who ran the daily operations at Ace Gallery fired him and told the bankruptcy court that “millions of dollars [were] diverted to mysterious accounts and dozens of works of art that have been moved to private storage.”
Chrismas has been released on $50,000 bond and has pleaded not guilty to the charges. A trial date has been set for September 21. If convicted of all of the charges, he could face a maximum of 15 years in federal prison.