Hillel “Helly” Nahmad, who had apartments at Manhattan’s Trump Tower, a model for a girlfriend and an art gallery that featured modern masters such as Pablo Picasso, was sentenced to a year and a day in prison for his role in a high-stakes gambling ring.
Nahmad, 35, the son of billionaire art dealer David Nahmad, had asked for probation, saying he wanted to operate his Manhattan gallery and teach art to underprivileged children from the Bronx and Brooklyn.
U.S. prosecutors argued Nahmad deserved a harsher sentence because he pleaded guilty to being a leader and participating in a high-stakes gambling network that catered to celebrities and the very rich and laundered more than $100 million in proceeds. They sought a prison term of one year to 18 months.
Nahmad acknowledged during his plea in November that he was the leader and organizer of the gaming business, the primary source of financing and was entitled to a substantial share of the scheme’s profits.
“I am ashamed,” Nahmad told U.S. District Judge Jesse Furman in Manhattan yesterday before the sentence was imposed. “I have learned a hard, humiliating lesson, a humbling one. I no longer gamble. I work harder than ever in my art business, in the hope of restoring my good name.”
Nahmad asked for leniency, saying he was committed “to giving back to the community and sharing my love of art with others.”
Furman said he was “stunned” by the request by Nahmad’s defense team, saying, “to sentence him to something he professes to love and allow his family’s wealth to bail him out would not be punishment. It would not promote respect for the law, it would breed contempt for the law.”
The judge said he was troubled by a secretly recorded call made by U.S. investigators in which Nahmad can be heard saying he would sell a Raoul Dufy painting at a price that was inflated by $50,000 and that he would split a $25,000 profit with another member of the gambling ring. Nahmad can be heard bragging that he was “raping” the buyer for the profit.
Nahmad, originally accused of running one of two overlapping gambling rings, pleaded guilty in November to one count of operating an illegal gambling business after the U.S. dropped racketeering, money-laundering and other fraud charges.
As part of his plea, he agreed to forfeit $6.4 million and all rights to the Dufy painting titled “Carnaval a Nice, 1937.” The judge yesterday ordered him to also pay a $30,000 fine and said he had to surrender to U.S. prison officials on or by June 16. Furman granted defense attorney Benjamin Brafman’s request that the judge recommend Nahmad serve his time at the Federal Correctional Institution at Otisville, New York.
Nahmad, who once partied with the likes of actors Leonardo DiCaprio and Orlando Bloom, also earned millions of dollars on bets, including $9.95 million he won playing backgammon, the U.S. said.
The gallery’s lease at the Carlyle Hotel won’t be renewed, Brafman said in court papers, citing the fallout from the criminal case and the resulting 75 percent drop in sales. When asked about the gallery’s future as a result of Nahmad’s prison sentence, Brafman said in an e-mailed statement, “the gallery will stay open.”
Aaron Golub, an attorney who represents the Nahmad family, said in an e-mail today that the gallery will remain in the hotel “through 2016 and possibly thereafter.”
One of the two gambling rings involved a New Yorker named Vadim Trincher who helped operate 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.
Trincher was sentenced yesterday to five years in prison by Furman.
The other ring was run by Nahmad and Trincher’s son, Illya Trincher of Beverly Hills, California, and was a high-stakes gambling operation for millionaires and billionaires, according to the government. Illya Trincher pleaded guilty to gambling charges in November and is scheduled to be sentenced this month.
To date, 28 defendants have pleaded guilty in the case and two have entered deferred prosecution agreements with the office of Manhattan U.S. Attorney Preet Bharara.
Prosecutors claimed in the indictment the scheme was financed, in part, by Nahmad’s gallery. Last year, the gallery held an exhibition of modern and postwar artists including Joan Miro, Alexander Calder, Jean Dubuffet and Fernand Leger.
“We’re obviously disappointed,” Brafman said after court. “Seeing a man like Helly go to jail for any amount of time breaks my heart.”
The case is U.S. v. Tokhtakhounov, 13-cr-00268, U.S. District Court, Southern District of New York (Manhattan).