Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today that ROBERT A. OLINS was arrested this morning on conspiracy, obstruction, and bank fraud charges stemming from his scheme to hide assets from a receiver (the “Receiver”) appointed by U.S. District Judge Denise L. Cote of the United States District Court for the Southern District of New York to oversee the liquidation of OLINS’s art and antiques collection (the “Art and Antiques Collection”) to satisfy a $3.3 million disgorgement judgment entered in connection with an enforcement proceeding by the Securities and Exchange Commission (“SEC”).
Among other misrepresentations, OLINS caused the Receiver to make false statements to the Court concerning the value of the items in the Art and Antiques Collection in order to induce the Receiver and the Court to approve sales of certain items without knowledge that OLINS had secretly sold or planned to resell the items at higher prices, with OLINS illicitly pocketing the difference instead of paying the SEC.
OLINS is expected to be presented today in federal court in Manhattan before United States Magistrate Judge James L. Cott.
U.S. Attorney Preet Bharara said: “As alleged, Robert Olins carried out a brazen shell game to deceive and hide assets from two federal courts, a court-appointed receiver, and the SEC. Olins allegedly lied repeatedly, grossly understating what he received from the sale of valuable art and antiquities so that he could pocket money that should have gone to satisfy a court judgment.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Olins had a $3 million judgment due from previous securities violations, but instead of paying it back, he sought to conspire and hide assets to profit himself. This case should be a warning to others who seek to enrich themselves rather than pay judgments. This type of scheming only ends in handcuffs.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Similar to Mr. Olins’s innovative ways to enrich himself, the Postal Inspectors will also be innovative, as well as tireless, to investigate individuals who create fraudulent schemes to enrich themselves.”
According to the allegations contained in the Complaint and in court documents previously filed in federal court: As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
On or about December 20, 2007, the SEC filed a civil complaint against OLINS in the United States District Court for the Northern District of California (the “California Court”) alleging that OLINS had violated provisions of the federal securities laws. See SEC v. Olins, 07 Civ. 6423 (MMC). On or about February 25, 2011, the California Court entered a $3,373,225 disgorgement judgment against OLINS (the “Disgorgement Judgment”). On or about July 27, 2011, the SEC filed an action in the United States District Court for the Southern District of New York (the “New York Court”), registering the Disgorgement Judgment and asking that a receiver be appointed to liquidate certain assets belonging to OLINS, including the Art and Antiques Collection. See SEC v. Olins et al., 11 Misc. 261 (DLC). On or about May 11, 2012, the New York Court issued an order appointing American Bank and Trust Company as the Receiver. The order prohibited OLINS, as well as any person or entity with “possession, custody or control” of any item from the Art and Antiques Collection, from engaging in any form of side deal, self-help, set-off, or transaction not approved by the Court.
OLINS devised a scheme, in coordination with an executive (“CC-1”) of an arts and antiques dealer based in London and New York (the “Antiques Dealer”), to hide assets from the Receiver and the Courts and personally enrich himself. Based on material misrepresentations by OLINS and CC-1, the Receiver and the New York Court approved sales of certain items in the Art and Antiques Collection without the knowledge that OLINS and CC-1 had secretly sold or planned to resell the items at higher prices, with OLINS illicitly pocketing the difference.
Specifically, OLINS illicitly profited from the improper liquidation of at least two pieces from the Arts and Antiques Collection:
The Antique Vases
On or about April 3, 2012, the Antiques Dealer recorded the sale of a Louis XV Porcelain Garniture of Three Vases (the “Vases”) to a client for approximately $1.2 million. At the time of the sale, the Vases were part of the Art and Antiques Collection and not owned by the Antiques Dealer. On or about April 10, 2012, the Antiques Dealer received payment of approximately $1.2 million, a fact which was relayed via email to CC-1.
On or about June 14, 2012, the Receiver filed an application requesting approval to sell the Vases to the Antiques Dealer for $540,000. The application was supported by a declaration of a vice president at the Receiver (“Individual-1”), based on information he received from CC-1 that the Antiques Dealer was negotiating the sale of the Vases to a client for approximately $600,000. Based on this information, the New York Court approved the sale of the Vases from the Receiver to the Antiques Dealer for $540,000.
In truth, and as OLINS and CC-1 well knew, in or about April 2012, the Antiques Dealer had already pre-sold the Vases to another client for approximately $1.2 million and received payment for that sale. OLINS personally received at least $460,000 in cash and credit from the sale of the Vases.
At no time did OLINS disclose his receipt of the proceeds from the Vases to the SEC, the Receiver, the New York Court, or the California Court, nor did he provide those proceeds to the SEC or the Receiver.
The Dragon Candelabra
In November and December 2012, Individual-1 communicated with OLINS and CC-1 concerning the sale of a pair of Louis XV Gilt Bronze Dragon Candelabra (the “Dragon Candelabra”), an item from the Art and Antiques Collection.
In or about November 2013, Individual-1 agreed to sell the Dragon Candelabra to an individual not named herein (“Individual-2”) for $235,000. At the time he approved the sale, Individual-1 understood that Individual-2 intended to place the Dragon Candelabra on consignment with the Antiques Dealer in an effort to find a buyer who would pay in excess of $235,000.
On or about November 19, 2013, after taking possession of the Dragon Candelabra from Individual-2, the Antiques Dealer recorded a sale of the Dragon Candelabra to a client not named herein for approximately $1.2 million. Individual-2 was subsequently credited at least $653,000 for the sale of the Dragon Candelabra.
Notwithstanding the representation by OLINS to Individual-1 that OLINS would not receive any proceeds from the sale of the Dragon Candelabra, OLINS in fact received at least $197,000 from the sale of the Dragon Candelabra.
At no time did OLINS disclose his receipt of the proceeds from the Dragon Candelabra to the SEC, the Receiver, the New York Court, or the California Court, nor did he provide those proceeds to the SEC or the Receiver.
The 2014 Contempt Proceeding
On September 29, 2014, the California Court issued an order to show cause why OLINS should not be held in contempt for failure to pay the Disgorgement Judgment. In response, OLINS filed a declaration with the California Court in which he made the following statements, among others:
- “There has been no effort on my part to secret assets or ignore the Disgorgement Judgment.”
- “I have spent untold hours trying to find buyers for pieces of the [Arts and Antiques] Collection so that [the Receiver] will be paid in full and the SEC will get monies from the proceeds as well.”
- “I continue to work cooperatively with the Receiver/Bank in assisting in the sales of the Receivership assets. I have been doing everything I can to repay my debt to [the Receiver] and the SEC’s penalty Judgment and Disgorgement Order.”
- OLINS also made the following representations about his income for the 2012 and 2013 calendar years:
- Apart from $114,281 in consulting fees, OLINS said he “received no other . . . income for 2012.”
- Apart from $57,882.06 in consulting fees, OLINS said he “received no other . . . income for 2013.”
In truth, OLINS had earned a total of at least $657,000 in 2012 and 2013: (a) in 2012, OLINS received at least $460,000 in proceeds from the sale of the Vases; and (b) in 2013, OLINS received at least $197,000 in proceeds from the sale of the Dragon Candelabra.
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OLINS, 58, was arrested this morning in West Hartford, Connecticut. He is charged with one count of conspiracy to obstruct justice, one count of obstruction of justice, one count of conspiracy to commit bank fraud and one count of bank fraud.
The conspiracy to obstruct justice count carries a maximum of five years in prison; the obstruction charge carries a maximum of 10 years in prison; each of the conspiracy to commit bank fraud and bank fraud charges carries a maximum of 30 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the Federal Bureau of Investigation and the United States Postal Inspection Service, and thanked the SEC for its assistance. He added that the investigation is continuing.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Andrea M. Griswold and Christine I. Magdo are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is
presumed innocent unless and until proven guilty.