[MSN] Manhattan dealer Edward Merrin was sentenced on 17 September in a federal case that charged him and his son Samuel Merrin with defrauding their clients William Ziff and his wife out of millions of dollars. The case against Samuel Merrin continues.

[Museum Security Network Mailing list]

Slap on the wrist for fraudulent antiquities dealer

By Jason Edward Kaufman | Posted 04 October 2007 

NEW YORK. Manhattan dealer Edward Merrin was sentenced on 17 September in a
federal case that charged him and his son Samuel Merrin with defrauding
their clients William Ziff and his wife out of millions of dollars. The case
against Samuel Merrin continues. 

Edward Merrin was sentenced to one year's probation with eight months of
home confinement, ordered to pay the government a $3,000 fine, and to pay
restitution of $44,455 to the victims. Mr Ziff, who died in 2006 as the case
was proceeding, built the Ziff-Davis publishing empire which the family sold
for $1.4bn in 1994. In light of the scale of the allegations, the sentence
is being seen by some as a "slap on the wrist". 

According to the 2005 indictments, filed separately against Edward and
Samuel Merrin, the dealers entered into an oral agreement around 1989 to
sell the Ziffs' antiquities according to a "cost-plus agreement". This meant
that the couple would pay the Merrin Gallery's cost of acquiring the art
plus an agreed commission ranging from 10% to 20%, depending on various
criteria. From 1989 to 1999, the couple paid the Merrins "over $63m to
purchase [hundreds of pieces of] art, approximately half of which (by value)
was purportedly covered by the cost-plus agreement". The indictment alleges
that by misrepresenting the gallery's acquisition cost, the Merrins
fraudulently increased both the "cost" component and commission component of
the prices they charged the couple. 

The government prosecuted the Merrins for mail fraud, which makes it a
felony to transmit fraudulent information across state lines and is
punishable by fine or imprisonment of up to 20 years, or both. 

The indictment lists 11 items as evidence of the fraudulent scheme, in each
case providing the purported purchase price and commission that the Merrins
charged, as well as the actual (lower) purchase price. The source of the
government's information on the purchase prices was not disclosed. 

The list ranges from ancient Syrian pieces to pre-Columbian antiquities. In
1999, according to court papers, the Merrins sold the Ziffs five Olmec
standing figures (1200-900 BC) for "$775,000 plus 10% [commission] totalling
$852,500", but the actual cost to the dealers had been approximately
$410,000. The fraud peaked in 1999 with the sale of an Olmec jade mask of a
bearded ruler (900-600 BC), "collected in the 1960s", invoiced for
"$1,120,000 plus 10% [commission] totalling $1,232,000", that allegedly had
cost the gallery only $390,000. 

The criminal case against Edward Merrin's son continues and may expand to
include other parties. 

In June, Samuel Merrin entered into a deferred prosecution agreement,
details of which have not been made public. This is an arrangement in which
the government agrees to dismiss charges if the defendant meets conditions
that typically involve co-operating with the investigation. It remains to be
seen what Samuel Merrin will reveal in order to have the charges dismissed.
He has until December when the court will reconvene to determine if he has
satisfied all the conditions of the agreement. 

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