Dietmar Machold, Jet-Setting Violin Dealer, Convicted of Embezzlement
Dealer Played Role in New Jersey Symphony Deal
Friday, November 09, 2012 - 02:25 PM
Dietmar Machold, once the world’s most successful dealer of rare violins, violas and cellos, was found guilty of embezzlement and fraud Friday. A judge in Vienna has sentenced him to six years in prison, according to the German news reports.
The Bremen-born Machold, 63, built a family business into a global empire, with branches in New York, Vienna, Zurich and Chicago, and clients that included wealthy collectors and elite musicians.
"I am a failure. I have lost everything," Machold said in a Vienna court as he was sentenced.
According to the Viennese investigation, Machold had grossly inflated the value of rare violins that clients entrusted him for sale, which he used as collateral for loans or sold and embezzled the proceeds. In one case, he valued a cello at $300,000, even though it was worth a few thousand dollars. Other instruments he dealt with have disappeared altogether.
Investigators also believe that Machold falsified reports in order to sell worthless instruments at high prices. This portion of the case awaits a separate judgement, as a co-defendant is ill.
Machold, who holds dual citizenship in Austria and his native Germany, was arrested in March 2011 in the resort town of Zermatt, Switzerland. He was known for his jet-setter lifestyle, living a 14th-century Austrian castle and owning a vast collection of classic cars.
The dealer previously played a central role in the New Jersey Symphony’s ill-fated purchase of a set of "Golden Age" instruments in 2003. The value of the 30 string instruments was found to have been grossly inflated and doubts surfaced about the authenticity of several of the instruments in the collection. The purchase nearly bankrupted the orchestra.
When the fraud trial began in September, Machold partially admitted guilt, but denied allegations of fraud. The dealer’s ex-wife and mother and law were sentenced to one year probation for playing a supporting role. He could now appeal the judge’s decision.