Update: Hart Galleries, Houston TX

Barry Rogers of the Houston Chronicles is reporting the owners of the Hart Galleries,who plead guilty to misapplication of fiduciary property of more than $200,000, a first-degree felony. Owners Jerry Hart, 65, and Wynonne Hart, 61 were both sentenced to 14 years in prison. That is a rather strict sentence, but the individual losses from the Hart's are expected to exceed $4 million. The judgment is certainly a big difference from what we typically hear, but that is usually for poor and mismanagement of auctions, as opposed to criminal misconduct.

Rogers reports The judge said putting senior citizens in prison was difficult, but said they did not take any responsibility for stealing money from their customers. They had faced punishments ranging from probation to life in prison.

“It was a classic Ponzi scheme,” Roll said. “They were using the newest customers’ money to pay off the oldest customers.”

The sentencing came three years after the Harts’ once-glamorous auction house, which sometimes served as the setting for opulent parties, went into bankruptcy.

Restaurateur Tony Vallone called the prison sentence a huge fall for the well-known couple, whose names frequently were frequently noted in society columns.

“They were players in the community, they did a lot of charitable auctions,” Vallone said. “They were very nice people, and I liked them.”

Some of the Harts’ customers were less impressed.

Deborah Butler, who lost about $100,000 worth of furniture, said justice had been served by the sentences.

“Mr. Hart had already visited a bankruptcy attorney when he took my consignment … ,” Butler said. “It was egregiously dishonest.”

To read the full Houston Chronicle article, click HERE.