Art dealer and founder of Ace Gallery arrested on embezzlement charges

Art dealer and founder of Ace Gallery, Douglas J. Chrismas, was arrested Tuesday on charges that he embezzled more than $260,000 from the now-closed gallery’s bankruptcy estate. The 77-year-old surrendered without incident to federal agents and was ordered released on a $50,000 bond.

A trial date has been set for Sept. 21, the U.S. Attorney’s Office for the Central District of California said in a news release. Chrismas pleaded not guilty.

This is the latest in a long string of legal troubles and controversies Chrismas has been embroiled in since founding the gallery in the 1960s. While known for championing pioneering artists and sculptors such as Robert Irwin, Michael Heizer, Sol LeWitt, Bruce Nauman and Sam Francis, Chrismas early on earned a reputation for shady business dealings including not paying artists, dealers, collectors and landlords.

In 1986, Chrismas was jailed for allegedly defrauding a Canadian collector of $1.2 million in artworks by contemporary artists including Andy Warhol and Robert Rauschenberg. He was released on bail and ordered to appear at a preliminary hearing on seven counts of grand theft. The gallery filed for bankruptcy more than half a dozen times over the years in order to protect itself from creditors.

In 2013, Chrismas filed for bankruptcy for the last time after not paying rent on the gallery’s 30,000-square-foot flagship location on the second floor of the Wilshire Tower in the Miracle Mile district of Los Angeles. During this time a number of artists, including Mary Corse, filed motions seeking the return of their art from the gallery.

Three years later, after failing to make a $17.5 million court-ordered payment to settle his Chapter 11 debts, Chrismas was terminated from all gallery operations. A bankruptcy trustee and forensic accountant, Sam Leslie, took over management of the space and filed a lengthy status report with the court documenting financial irregularities by Chrismas after bankruptcy papers were filed.

Between February 2013 and April 2016, when Ace was going through its final Chapter 11 proceedings, Chrismas remained the gallery’s president, trustee and custodian and oversaw all operations. This role also gave him access to the gallery’s property.

The new charges, which were investigated by the FBI’s art crime team, allege that in late March and early April of 2016, Chrismas embezzled approximately $264,595 that belonged to the Ace Gallery bankruptcy estate.

Chrismas allegedly embezzled $100,000 that was owed to the gallery by a third party for the purchase of artwork but instead, at Chrismas’ direction, was paid to a separate corporation that he owned and controlled. In addition, Chrismas allegedly paid a creditor of his corporation with approximately $114,595 that he embezzled from funds owed to the gallery by a third party that purchased artwork.

Chrismas would face a statutory maximum sentence of 15 years in federal prison if convicted of all charges.