Advertisement - Click to support our sponsors.

Center Art Gallery
executives guilty
of embezzling

A U.S. judge decided that two
Center Art Gallery officials took
$1.6 million from their
workers' fund

By Debra Barayuga
Star-Bulletin

Two Center Art Gallery executives convicted in 1990 for passing off artworks were convicted again today. This time for stealing $1.6 million from two of the company's employee pension benefit plans.

William Mett and Marvin Wiseman face five years imprisonment on each of 12 counts charging them with conspiracy and embezzlement.

Visiting U.S. District Judge Edward Rafeedie from California found the two men guilty on all counts based on transcripts of the 1996 trial. A nonjury retrial yesterday consisted of only brief arguments by the government and attorneys for the defendants.

Mett, president of Center Art Galleries, and Wiseman, vice president, were accused in 1990 of withdrawing $1.6 million between March 1990 and November 1991 from pension plan accounts. Both were trustees of the benefit plans.

Mett and Wiseman were also found guilty of illegally serving as trustees of the pension fund . Mett was found guilty of filing false documents relating to the pension plan.

Sentencing is scheduled for June 26. The judge allowed the men to remain free on bail and gave their attorneys an extension to file appeals.

The government said the two violated their fiduciary duties and acted with criminal intent to deprive the plan of assets when they withdrew the money via 42 checks over a 20-month period.

Funds loans, defense says

The government alleged that the two used the money to keep the gallery operating, to pay their salaries from 1990 to 1992 and to pay attorneys to defend them.

Dennis Riordan, attorney for Mett, argued the defendants withdrew the money as loans and transferred it to the business with the full intention of paying it back.

In 1990, their actions were consistent with doing everything they could to keep the business afloat, fulfill their pension plan obligations and pay their lawyers, Riordan said.

In arguments filed in court, Riordan argued that the government failed to prove Mett knew the transfers were illegal.

The benefit plan had previously made loans to the company between 1986 and 1989, which were recorded. Those earlier transfers were recorded as loans and repaid as such, Riordan argued.

Arthur Wachtel, attorney for Wiseman, argued the government failed to prove that his client acted with intent and should be acquitted.

Wiseman played a prominent role at Center Art Gallery by acquiring artwork and hiring employees but he was a "figurehead trustee," Wachtel said.

Wiseman had no ownership interest in the company and made no decisions regarding the administration of the pension plan, he said.

Mett was the one who administered the pension plan, signed the tax returns, hired the actuaries and authorized employee loans -- not Wiseman, he said.

No promissory notes issued

The defense also contends the government provided no evidence to prove Mett and Wiseman knew they had to resign as trustees after they were convicted in the art fraud.

In the government's closing statements filed in court yesterday, assistant U.S. Attorney Larry Tong argued that if the withdrawals were in fact loans, not one of the checks was documented by promissory notes. Defendants simply had the checks deposited into Center Art Gallery's account.

The purported loans also were not recorded until August 1994, almost three years after the pension plan accounts were depleted and when the government began investigating Center Art, Tong argued.

Mett and Wiseman were found guilty at their first trial in June 1997 and sentenced to about six years in prison. They appealed and the 9th U.S. Circuit Court of Appeals ordered a retrial reversing the conviction on the grounds that attorney Tom Foley had been improperly allowed to testify.

Foley had testified he advised the defendants that taking money from the plan and using it for the corporation was prohibited.

The government, at the first trial, had maintained that in spite of Foley's advice, Mett and Wiseman withdrew another $220,000 from the pension fund that was not used to pay retirement benefits, Tong said.

Mett and Wiseman served 36 months and 30 months in federal prison, respectively, for the mail and wire fraud.

The art fraud was exposed by Star-Bulletin writer Lee Catterall.

---

The Great Dali Art Fraud
update by Lee Catterall