Houston, Texas Art/Auction Gallery to Close - Bankruptcy and Criminal Charges

WKHOU.com of Houston is reporting that the owners of the Hart Galleries have plead guilty to misapplication of fiduciary property. The Hart Galleries website states the business in now in bankruptcy and there will be a final liquidation sale of assets and property.

There appear to be hundreds of victims with a total outstanding value of around $3.5 million at stake. Many of the victims are reported to be part of Houston society. Unfortunately, this is no longer an uncommon story about small regional auction houses failing. I know from personal experience as my parents lost a fair amount when Sloans Auctions of MD went out of business. To ad insult to injury, my father had to repay money that was sent to him prior to the bankruptcy on top of the property that was sold for him, but never paid by Sloans. There were no criminal charges in the Sloans case as there is with the Heat Galleries, but there should be more protection for consumers, such as surety bonds based upon annual sales. I do know many of these smaller houses can run on very thin margins, and it is very easy to slip into the routine of paying consignors with the proceeds of a later sale.

WKHOU report The accused are a husband and wife who, until recently, used to live in a $1.5 million home in a West Houston neighborhood. It was a home complete with private lakes and tree lined streets.

Investigators say that the couple worked at an auction house that catered to Houston’s elite. And that they sold millions of dollars of fine china, furniture and art.

They are the Harts of what had been Hart Galleries.

WKHOU continues It wasn’t until another victim, who expected a $100,000 for a painting, tipped the Harris County DA that something wasn’t right.

An investigation led to felony charges of theft, money laundering and now, the Hart’s have reached a plea deal on a charge of “misapplication of fiduciary property.”

The Hart’s attorneys would not comment other than to say the Harts were sloppy bookkeepers and didn’t even use a computer.

The pair is supposed to be sentenced on Tuesday, but they do have supporters.

As I mentioned in a previous post, it seems many who have been tarnished by scandal remain to have their supporters, as Lawrence Salander does as well.

The Hart Galleries website states:

It is with the deepest regret and sadness that we inform you of the filing for bankruptcy and closing of Hart Galleries and most trusted name in quality antiques, fine furnishings and the decorative arts, not only in Houston, but throughout the Southwest. A reputation earned over the last 68 years, since 1938, by three generations of the Hart Family. Our 50,000 square foot showroom will offer you an incredible selection of antique and new furnishings, fine art, designer and estate jewelry, exotic designer furs, and and exceptional collection of hand-woven Oriental Rugs.

Our entire inventory of fine antiques, rare collectibles, estate and designer jewelry, beautiful home furnishings, Oriental Rugs from around the world and exotic furs must be liquidated over the course of the sale. Additional merchandise from domestic and overseas English, French, and Italian estates will be arriving over the course of the sale.

To read the full article, click HERE.