Nov. 12 (Bloomberg) -- Manhattan art gallery owner Hillel “Helly” Nahmad pleaded guilty to participating in a high-stakes gambling ring catering to celebrities and the very rich, calling it a hobby that developed into an illegal business.
“Judge, this all started as a group of friends betting on sporting events, but I recognize that I crossed the line and I apologize to the court and my family,” Nahmad told U.S. District Judge Jesse Furman today in Manhattan.
Nahmad and 33 others, including an alleged Russian crime boss, were named in a 27-count indictment unsealed in April and charged with operating two overlapping gambling rings.
Nahmad, 35, pleaded guilty to one count of operating an illegal gambling business. He faces as much as five years in prison when he’s sentenced on March 19. Nahmad will also forfeit $6.4 million and a painting, “Carnaval a Nice, 1937” by Raoul Dufy, as part of a plea agreement with prosecutors.
“It started as a hobby,” Nahmad, whose gallery sells paintings by Pablo Picasso and other modern masters, told Furman. “Unfortunately it became a business. It was never my main business.”
Both sides agreed that nonbinding federal sentencing guidelines call for Nahmad to get from 12 to 18 months in prison. His lawyers, Benjamin Brafman and Paul Schechtman, said in a statement after the hearing that they hope he won’t get any prison time. The plea agreement doesn’t call for Nahmad to cooperate with the government’s investigation.
“We are pleased that the government has agreed to dismiss the racketeering, money-laundering and fraud charges in the indictment,” his lawyers said in the statement.
One of the gambling rings, allegedly run by a New Yorker named Vadim Trincher, operated an international sports book for wealthy Russians and laundered tens of millions of dollars from Russia and Ukraine through Cyprus to the U.S., prosecutors said.
Alimzhan Tokhtakhounov, who has been charged in connection with bribing officials of the 2002 Winter Olympics in Salt Lake City, provided protection to the ring and was paid $10 million in a single two-month period, prosecutors said.
The other ring, run by Trincher’s son, Illya Trincher of Beverly Hills, California, ran a high-stakes gambling operation for millionaires and billionaires, according to the government.
Prosecutors claimed the ring was financed, in part, by Nahmad’s gallery, according to the indictment. The gallery last year held an exhibition of modern and postwar artists including Joan Miro, Alexander Calder, Jean Dubuffet and Fernand Leger.
The case is U.S. v. Tokhtakhounov, 13-cr-00268, U.S. District Court, Southern District of New York (Manhattan).
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