Gerald Segelman spent a lifetime amassing one of the world's finest collections of violins. The events that followed his death would blow the lid off the 'genteel' world of violin dealing. Alix Kirsta investigates.
Gerald SegelmanWhen the reclusive 93-year-old millionaire Gerald Segelman died in London in July 1992, his passing was the subject of as much speculation as almost every aspect of his shadowy existence. An Austrian Jewish immigrant, he made his fortune between the wars with a chain of cinemas and cafes, yet when he died there were no announcements or newspaper obituaries. Childless and without close friends, his simple funeral was attended only by distant relatives.
Some people did not even discover his true identity until after his death. At Sotheby’s, Bonhams and Christie’s auction houses, newer staff discovered to their amazement that “Mr Black”, a gaunt man in a shabby suit who attended all the violin auctions — usually arm-in-arm with an elderly lady reputed to be, variously, his wife, mistress or secretary — was one of the world's leading collectors of stringed instruments.
For years, Mr Black had been the subject of end less gossip. Notoriously dour and frugal, he was often seen shuffling around Berwick Street market in central London, carrying plastic bags of cheap fruit and veg, and in his last years he lived off meals on wheels. Secretive to the point of paranoia, he noted down his financial transactions in code. And Segelman enjoyed intrigue. It was said that he used the alias Mr Black having been part owner of the Black And White cafe chain in the provinces; when looking for a solicitor, he chose the London firm White & Co for the same reason.
As the news that Mr Black was dead spread through the West End — news long awaited in the violin trade — every dealer experienced a frisson of excitement. At last the extent of what many suspected was the world’s finest violin collection would become public. More importantly, it would surely come up for sale. Insiders knew that Segelman’s cache of instruments, amassed at bargain prices over the 1940s and l950s, and including works by the great Italian masters of the 18th century (Stradivari, Gagliano, Guarnieri “del Gesu”), was of colossal value. They could not realise how colossal, or how explosive its impact would be in a market where a del Gesu such as that owned by the late Yehudi Menuhin can sell for $6m, and where the rarity of the world’s remaining few hundred “masterpieces” makes them a sought-after investment.
Crammed under the bed
“All of us knew Gerald Segelman had built up an important collection,” recalls a former Sotheby’s expert. “What shattered me, when the facts emerged, was how great it was.” The rumours had not been exaggerated: stories that he kept instruments crammed under the bed, piled on top of wardrobes, inside cupboards and on the floor of his dingy one-bedroom flat in Park Crescent, opposite Regent’s Park, turned out to be entirely accurate. Other caches of violins and fine bows were eventually found in banks around Marylebone and at Segelman’s properties in Brighton and on Paddington Street in London, where he had flat above a bookie's, overlooking a greasy spoon and the Speed Queen launderette.
As the extent of Segelman’s treasures dawned on London’s tiny elite circle of violin dealers, few anticipated the controversy beginning to brew over his legacy. And none envisaged the ferocity with which a dispute involving his estate would blow the lid off their genteel, hermetically sealed world, resulting in a scandal that continues to reverberate on both sides of the Atlantic. At the core of the dispute, which some dealers now darkly refer to as the “Segelman curse” lies a deeply unsettling question: how much business in this apparently gentlemanly division of the art and antiques market consists of corrupt or secret practices?
Following an action in London’s High Court last February in which a group of international dealers and two Segelman family members were accused of depriving Gerald Segelman’s estate of millions of pounds, skeletons have continued to clatter out of the finely veneered cabinets of the violin market. A second lawsuit is due to be heard in a federal court in Chicago later this year. The extent to which, as one dealer alleges, “this is a mafia, where the big dealers get away with scams and skulduggery for which people in other professions would end up under the wheels of trucks” remains unclear.
What is certain is that the trust of collectors, sellers, smaller dealers, orchestral managers — and musicians — in the business is being severely shaken by the case, not least because of the big names and impeccable reputations that have come under fire. The names — and reputations — don't get much bigger than that of tall, urbane Peter Biddulph, at 56 still renowned for his whizz-kid energy and skittish charm. Since the demise in recent years of WE Hill, the venerable firm of violin dealers, Biddulph, a former cellist, is regarded as one of England’s two top dealers and experts, along with his former employer Charles Beare, the acknowledged world authority on stringed instruments. Biddulph, to the envy of his colleagues in England and abroad — and now to the schadenfreude of his enemies — became closer to Gerald Segelman in the last 20 years of his life and knew more about his collection than anyone else.
Peter Bidulph, a top dealer, met Segelman at auctions in the 1970s; they were drawn together by their mutual love of violins and doing deals. He was the only non-relative at his funeral, and the first to be informed of his death. “I was on Centre Court at Wimbledon, watching the men’s singles finals, when a policeman tapped me on the shoulder, saying I was urgently wanted on the phone.” On the line was Vera Farnsworth, Segelman’s 82-year-old former secretary and devoted live-in partner for 65 years. She was distraught. “Gerald had just died and she asked me to come over to their flat immediately. She had no idea I was at Wimbledon. How she tracked me down I”ll never know”
Biddulph wasn’t surprised by the call. He considered himself Gerald and Vera’s oldest friend, one of the very few with whom they remained in close contact. At first glance, the two men seemed an odd couple. Biddulph’s reputation as a jet-setting international wheeler-dealer and clincher of record-breaking sales earned him the sobriquet “the flying fiddle”. A consultant to Sotheby’s and Christie’s, and also a dealer whose clients included Nigel Kennedy, Yehudi Menuhin and Pinchas Zuckerman, Biddulph prospered as prices of violins skyrocketed in the 1970s, fuelled by the burgeoning Japanese market. He thought nothing of flying to Hong Kong for the day to purchase or sell instruments, and boasts of having flown almost 100 times on Concorde during the 1980s, once setting himself the challenge of doing business in NewYork, Philadelphia, Chicago and Los Angeles within 24 hours. ”I got the idea after Danny Barenboim told me his ambition was to conduct in London, NewYork and LA all in one day.” Biddulph was the only dealer with whom the cantankerous Segelman had not fallen out. They first met at auctions in the 1970s, drawn together by a serious knowledge of and passion for violins.
Living like bandits
Segelman’s love of the instrument had begun aged seven, when his mother treated him to lessons at sixpence an hour, on an old rented fiddle. The owner of priceless instruments, including seven Strads and four even rarer del Gesus, what turned him on, apart from the violins” beauty and history, was the excitement of striking deals. Biddulph sensed it brought back the old buzz and challenge of his upward climb in the cinema business. “Gerald thrived on the cut and thrust of commerce, and liked the fact that we dealers were like bandits, having a great time running round the world and moving fiddles about at a profit”
Segelman eventually allowed Biddulph — sometimes accompanied by an American colleague, Robert Bein, co-founder of Bein & Fushi, a Chicago firm of dealers — to look at some of his acquisitions. Only after agreeing to pay what Segelman demanded was Biddulph allowed to buy an instrument; there were no compromises on the price and the violin was not allowed out of his sight until a cheque for the amount was produced. “Gerald knew the business. He went to all the auctions, saw the prices, and knew private sales usually fetched far more, and recognised Peter’s impressive track record,” remembers Robert Bein. “Gerald knew for how much he wanted to sell things, and knew Peter would pay up. He always took interest and pleasure in how much profit Peter eventually made on his violins. They both loved violins — and doing deals. This was not some feeble old man but a shrewd negotiator who understood the business.
His was a typical rich man’s dilemma: too secretive and mistrustful to talk about what he owned, with Peter he had the opportunity to interact with another expert, to show off his prizes and gain enjoyment and excitement from them.” Bein vividly recalls being “auditioned” by Segelman when Biddulph first introduced them in 1974. “There we were, sitting in his cluttered, poky fiat, violin cases stacked in every corner of the sitting room, while Gerald brought violins through from the bedroom, apparently from under the bed, expecting me to prove my expertise by calling out the maker's name on sight. He adored that!”
On hearing of Segelman’s death, Biddulph’s main concern was to comfort Vera. She had lived with Gerald since the age of 17, when he hired her as his bookkeeper. In earlier years they had enjoyed themselves at dance halls and nightclubs, travelled on the Queen Mary and visited Hollywood film studios. Although in public each addressed the other as “Mr Segelman” and “Miss Farnsworth”, and she continued to draw a salary as his secretary theirs was a long loving relationship. Now, Biddulph anticipated, there would also be business to discuss with her.
A year earlier, Gerald had gradually disclosed more information about his violins. At one meeting, he scribbled a partial list of his collection from memory and gave it to Biddulph, who, having seen only one or two instruments at anytime, was astonished that there were many more fine pieces. That day they also discussed the possibility of publishing a book of his collection, and of mounting an exhibition. “But Gerald wanted no publicity nor any mention of his name, so those schemes were dropped,” he says.
Uppermost in his mind were Gerald’s last words to him, 10 days earlier. “He called and asked me to come round immediately. Vera let me into the flat and I saw he was in great pain, with ulcerated legs. By now being almost stone deaf; he shouted at me, “Biddy, anno domini, anno domini! I am dying. Sit down. I want to tell you something. I want you to have those violins. You”ll know what to do with them. When I die, Vera’s going to call you.' He said he had a wall safe in the flat where many instruments were kept along with others in bank vaults. He gave me the locations and apologised for misleading me before, but it was for security reasons.”
The incomplete will
It was the last time they saw each other. In his will, Segelman left.£20,000 to two nephews and £200,000 to Vera, who inherited the tenancy of the Regents Park flat and its contents. The bulk of his estate — originally valued at about £8m — went to a charitable trust whose chief beneficiaries, until 2013, are various “poor and needy” members of the Segelman family. The residue then goes to several Jewish charities. Incredibly, the will did not mention his violins, which were eventually valued at £10m - £15m.
Although aware he collected instruments, neither Vera and Gerald’s lawyer, Jack White, nor Timothy White, his nephew who took over as the estate’s chief solicitor, executor and trustee, apparently had much inkling of the extent of the collection, which was unearthed in the days after Gerald’s death. Andreas Woywod, Biddulph’s chief restorer, who first retrieved and inspected the instruments, remembers the excitement of what he calls “the treasure hunt”. “When I crawled underneath the bed, I found about six double violin cases. There, to our amazement he kept a rare, beautifully decorated Strad. The sagging bedsprings had dented the case and damaged the instrument. It took over 450 hours of work to restore it fully.”
The lawyers decided that Biddulph should store the 50-odd violins and violas, and prepare an inventory and valuations for the estate. Timothy and Jack White made it clear they were relying on his expertise as to how best to go about selling the collection, since they were ignorant of the violin market. They and Biddulph discussed different possible terms under which he might act for the estate, eventually agreeing he should sell the instruments for a commission of 5% of the sale prices. Because of the size and quality of the collection, Biddulph advised against selling at auction. The received wisdom is that “flooding” the market with too many valuable pieces at one time deters serious collectors from bidding, and instruments fetch lower prices at auction than through private sales. This is because the small number of collectors and musicians who pay the top prices prefer the discretion, personal attention, expertise and guaranteed after-sales service of a top dealer.
Biddulph’s insurance valuations indicated the likely selling prices, but Timothy White stipulated that any firm offer should be confirmed as a fair market price by another independent expert. Biddulph suggested James Warren, from the Chicago firm of dealers Kenneth Warren & Son. By autumn 1992, Biddulph hail approached potential clients and overseas colleagues to “place” Segelman’s violins. In early December 1992, five fine violins and violas, including two Stradivari, were sold for a total of $2.7m to Howard Gottlieb, a Chicago collector and trustee of the Chicago Symphony Orchestra. The sale prices were confirmed as fair by James Warren. The money was deposited with the estate and Biddulph pressed ahead with finding further buyers. What actually happened to the rest of Segelman’s fiddles did not emerge until 1997.
If Timothy White hadn’t become bogged down in prolonged and messy legal battles over the estate, it might have struck him sooner that all was not well. Instead, in 1993, White’s intended prompt winding up of the estate gave way to a classic family feud, as Vera Farnsworth — supported by members of the Segelman family — unexpectedly claimed ownership of almost the entire instrument collection and issued a writ against the estate. After three years of legal tussles, during which her mental faculties began rapidly failing, Vera’s claim was dismissed by mutual agreement, shortly before her death in 1996. Only at that point did it dawn on White that since December 1992, Biddulph had not accounted further to the estate. How many more violins had been sold, he wondered, and to whom and for how much?
Mess
After tense meetings between White and Biddulph, the executors were still none the wiser. Even today, Biddulph’s account of events is largely impenetrable — and, from his rambling manner and the restless way he paces his tiny office, he seems to know it. “As you may have noticed, I have a problem concentrating, or explaining business matters clearly,” he apologises when we meet, frequently digressing, losing the thread and contradicting himself. “I admit, by 1996 everything was a mess, and I hadn’t a clue how to deal with it. I”ve never been strong on paperwork and accounts — mostly I carry the figures around in my head and I didn’t have to hand the documents Mr White asked for. It was so long ago, I’d forgotten the exact sums I sold things for. I’d prepared invoices for him, but then didn’t send them, because I had received no contract for carrying out refurbishments and repairs. White was refusing to pay me for them. I was genuinely unsure of the terms of our agreement — something I’d stated in a letter in 1993.”
Unbelievably, he didn’t even keep a stock book, which White demanded to see. Biddulph attributes the chaos to a series of events. He had moved home and business premises, and spent much of 1993 and 1994 putting on an exhibition of Guarneri del Gesu violins at the Metropolitan Museum in NewYork. It was also an emotionally traumatic time.”Both my parents had recently died and I had an acrimonious break-up with my longtime girlfriend. I developed panic attacks, and then a fear of flying, which lasted several years.”
Despite the wide-eyed, distrait manner, he indignantly denies any impropriety in his business dealings. The absence of written contracts between violin dealers and their clients — who may be other dealers — is, he says, normal in the trade. “Ask anyone, ask Charles Beare [Biddulph’s former boss]. Our business is all done on a handshake, especially when we buy or sell an instrument jointly, or sell to one another, which often happens. And we all account for transactions in different ways. What Mr White didn’t understand was that selling a violin isn’t like selling a car! So he began to suspect some sort of scam.”
Frozen Assets
Biddulph assured White he would work out his accounts dating back to 1993. In March1997, these accounts having failed to materialise, White obtained a High Court order seizing all Biddulph’s paperwork and financial records. His assets were frozen, and what remained of Segelman’s collection was impounded and stored at Sotheby’s, across the road from his premises. To the trustees” horror, Biddulph’s records revealed the existence of scores of other violins, a cello and hundreds of bows, some worth many thousands of pounds, that had turned up at Segelman’s homes, among them a flat in Vera Farnsworth’s name in Hove. None of these had been recorded on the original inventory; some had been kept or sold by Biddulph, in the genuine belief, he claimed, that they belonged either to Vera Farnsworth or to Philip Segelman, one of the two nephews named in Gerald’s will; he had accordingly forwarded them payments.
Biddulph’s paperwork was so chaotic that other violins proved untraceable. By now Biddulph must have realised he was in deep water: he paid the estate more than £450,000 as an interim settlement — which even his lawyers admitted “is almost certainly insufficient” — followed by a further £75,000. In 1999, Timothy White filed two law-suits, one against Biddulph and Philip and Leonard Segelman in Britain, another in the US against the Chicago firm Kenneth Warren, the collector Howard Gottlieb and America’s largest firm of violin dealers, Bein &Fushi. The principal accusation is that Biddulph and his Chicago associates defrauded the estate of millions of pounds.
White’s lawsuit alleged that Segelman’s violins were deliberately undervalued and then resold at top prices, the profits staying within the group. The British lawsuit accused Philip and Leonard Segehnan of receiving proceeds from the sale of violins that belonged to the estate. The trial began in the High Court on February 6 last year and was scheduled to run a month. It lasted a week. The first three days produced a staggering opening speech from Timothy White’s counsel, summarising byzantine dealings between a group of long-standing associates. Almost all Segelman’s violins, it was alleged, had been valued by Biddulph and James Warren at “substantially less than their true market worth”; the instruments were then bought for those sums by Howard Gottlieb or the dealers Bein &Fushi — and even by the “independent” valuer James Warren.
Bein & Fushi,
violins dealers from ChicagoBiddulph received thousands of pounds worth of commissions from subsequent deals that were not disclosed to the estate. Months later, instruments were resold at huge mark-ups, sometimes double the original sale price, the dealers again pocketing a share of the profits. So while in December 1992 Gottlieb paid $2.7m for five pieces, including Segelman’s 1717 Stradivari from the master’s “golden period” for $l.75m and a 1689 “Arditi” Stradivari for $704,000, Biddulph then immediately provided Gottlieb — who had paid him a $500,000 “consultancy fee” — with a $4.52m insurance valuation for those instruments.
The explanation wasn’t that there had been a dramatic upturn in the market. On the contrary. In a 1991 letter to a Swiss bank, in which he valued a 1717 Stradivari belonging to another collector at £2.2m, Biddulph mentioned that he expected Segelman’s similar instrument to come on to the market “at £2m, probably in 1992”. In the same letter, Biddulph also stated that Segelman’s decorated 1722 “Rode” Stradivari (pictured above) would soon be on the market “in excess of £2m”; yet the Rode was valued for the estate in 1992 at £850,000 in its unrestored condition, with Biddulph later claiming his extensive restoration work brought its value up to £1.85m.
Stunned court
The speed of these back-to-back transactions stunned the court. It was claimed that two violins, a Landolfini and a Pressenda — which the estate did not know existed until Biddulph’s documents were seized — were sold by Biddulph to Bein & Fushi in October 1992 at $100,000 and $150,000 respectively. A month later, the Pressenda went to a professor at New York’s Juilliard School for $250,000; four months later, the Landolfini was bought by a student of the first violinist with the Tokyo Quartet for double its original price. More spectacular was the mark-up on a rare viola by Giovanni Paulo Maggini, named the “Dumas” after its original owner. It was valued by Biddulph at £200,000 in 1992, even though he had in 1990 valued two lesser Maggini violas for another client at £300,000 and £400,000.
Although the estate agreed to sell the Dumas to Howard Gottlieb for £200,000, instead James Warren bought it for that price, together with a Guarnieri violin for £150,000, after Gottlieb allegedly discovered flaws in the instruments. Although Biddulph claims to have doubted the authenticity of the scroll on the Dumas — doubts confirmed by WE Hill’s recently published records — Warren had none, and promptly valued it at $71m, then consigned it to Bein & Fushi, who sold it as “perfect” three months later for £750,000.
The frequency of similar transactions pointed to a complex pattern of insider deals and profit-sharing schemes among the group, sometimes involving joint purchases. The dealers often acted as middlemen, paying each other hefty secret commissions — “buyer’s premiums” in trade jargon. In the High Court, Mr Justice Evans-Lombe described the Chicago-based dealers and Biddulph as “forming some sort of a ring”. Whether the group had taken advantage of Segelman during his lifetime remains uncertain.
When it came to money, canny old Segelman was no pushover. In a fax to a Japanese dealer in 1991, Biddulph recounts offering Segelman £375,000 for the Dumas viola and a Maggini violin: “He laughed and told me to go away and talk to my client. He always does that.” By the fourth day of the trial, Biddulph’s lawyers persuaded him to consent to an £8m judgment against him. He claimed that he faced bankruptcy so it was agreed that the judgment could be satisfied by instalments totalling £3m, while virtually all his assets were made security for that debt.
Days later, Vera Farnsworth’s estate agreed to repay an undisclosed sum, while Philip Segelman agreed to a £400,000 order against him. Leonard Segelman had settled just before the trial. Shortly afterwards, the case against Howard Gottlieb in the US was dropped after both sides, again, reached an undisclosed agreement. In March this year, the case against Bein & Fushi was also dismissed, with lawyers reaching an undisclosed agreement. Apart from exposing the dubious ethics of a world infinitely tinier, more incestuous and esoteric than the art market, what is significant about this and the pending US case is how deeply it has divided the experts. Is the top end of the trade dominated by what American dealer and experienced whistle-blower Fritz Reuter calls “a violin mafia”, where dishonest appraisals and a policy of not revealing the final sale price to the original owner of a violin are the norm? (Reuter’s website, www.fritz-reuter.com, details many alleged misdemeanours in the business over the decades.)
Corruption is nothing new
According to one expert, Professor Brian Harvey, co-author of the l997 book Violin Fraud, the case clearly demonstrates the existence of a “cartel” composed of a few all-powerful dealers. “They all operate hand in glove, share in the arrangements and regard themselves as experts whose word cannot be challenged. They often act as auction house advisers and buy at sales, so it is time these facts were exposed.” However, to Graham Wells, founder of Sotheby’s musical instruments department, such machiavellian dealings are nothing new. “The violin trade has always been corrupt,” he insists. “Compared with the rest of the art and collectors’ market, and even with other instruments, only violins, because of their rarity, history and immense value, attract this level of competition, with auction houses and the trade — and, of course, musicians who cannot afford these instruments — all suffering as a result.”
As one of the original defendants in the US action, Robert Bein’s response is essentially “a plague on both your houses”. Blaming both sides for “a hideously bungled mess”, he confesses incomprehension at the haphazard way in which the executors and Biddulph dealt with such an important estate. “How could either side dispose of these instruments without a cast iron contract laying out every single term? Peter did have a contractual obligation which was not fulfilled, but actually both sides failed in their responsibilities to the estate. As for my firm, we bought from Biddulph, not from the estate. My business is to make money, so OK, if there’s such a crime, I plead guilty to selling violins at a profit.”
Certainly this is not the first case of violin dealers coming up against the law. The notorious “Kanda Scandal” in 1982 erupted after investigators exposed a worldwide trade in forged certificates accompanying second-rate violins being passed off as fine instruments. Masterminded by Yuko Kanda, a Tokyo dealer who supplied top music schools with violins, those arrested and charged with forgery and fraud included an American dealer and a Japanese music professor who accepted bribes from Kanda for recommending him to colleagues and students. More recently, Keith Bearden, another American dealer and bow maker, was extradited from Tokyo, where he had fled from FBI agents. He was tried and convicted in 1997 of stealing more than $3m from the sales of violins belonging to scores of professional musicians.
Sentenced to two years’ imprisonment, he was ordered to repay $1.7m to more than 300 of his victims. Bearden’s admission in court that his was “the kind of practice that a lot of [this industry] does ... more and more are doing it”, and the fact that Yuko Kanda is still in business in Tokyo, having purchased many of Segelman’s bows from Peter Biddulph, seem to confirm the views of Sotheby’s Graham Wells and the author Brian Harvey as to the ingrained culture of corruption. It also reveals the extent to which the business looks after its own. Bearden, now out of prison, is working in New York for one of the world’s most powerful dealers, Dietmar Machold.
A telling feature of the Segelman case is how many eminent names cropped up, simply by association. While there is no suggestion that any of these people acted dishonestly, to the outsider their business practices can appear unconventional, to say the least. Documents show that even the esteemed Charles Beare bought several of the estate’s violins from Biddulph at, it was claimed in the High Court, “considerably less than true market worth”. Biddulph charged 10% commission.
Business as usual
Biddulph remains under continued scrutiny by the estate, but otherwise it is business as usual. He was forced to sell his West End premises, yet the new owner of the building allows him to continue operating from the basement. Aggrieved at having to endure “the commercial equivalent of being on death row”, he insists he acted in good faith, valuing Segelman’s violins realistically and achieving the best prices at that time. He believes he was entitled to charge his “buyer’s premium”, since the 5% commission fee insisted upon did not cover the costs of dealing with the collection, especially the extensive restoration work His argument — echoed by colleagues — is that no leading dealer would offer their expertise, including guarantees of authenticity, on such poor terms. It was only because he could not afford the legal costs of a prolonged case that he agreed to settle after four days, he claims, which meant that the executors’ failure to spell out his legal obligations never emerged in court.
“When I recently sold Yehudi Menuhin’s del Gesu for his estate at $6m, the Swiss executor stipulated no transaction was possible unless I brought the buyer to him. The terms were laid out in black and white in advance. He told me candidly he would never consider handing me a fiduciary duty in a situation such as this. I knew exactly where I stood.” Maybe. But altogether more telling is the fact that Menuhin’s executors had no illusions about the violin business. The case against Kenneth Warren & Sons is still pending. Meanwhile, the future of Segelman’s remaining collection, currently stored at Sotheby’s, is any- one’s guess. Some dealers fear scandal and publicity may have deterred potential buyers. Others talk of some sort of curse. Reports from Sotheby’s indicate the magnificent Rode Stradis deteriorating. Despite an offer of £3.5m, it remains unsold. Might this turn out to be Segelman’s last joke on the trade?
This article in its entirety is copyright © 2002 Alix Kirsta.
First published in the Guardian, 31 August 2002 (pictured, a Del Gesu)