If the allegations are true, the collapse of Salander-O’Reilly would be among the most massive art frauds in history. All told, more than $100 million in art, bank loans, and client investments appears to have vanished into thin air. The scandal has shaken the art world, raising troubling questions about the darker side of this secretive, totally unregulated market into which investors have poured billions of dollars in the past decade. Today, as a federal bankruptcy judge sorts through the tangled web of claims against Salander, and an investigation, begun in late October by the Manhattan district attorney, raises the possibility that Salander will face a criminal indictment, the question that mystifies is not just how Salander got himself into so much trouble, but why? What caused a man who had achieved so much to risk everything he had worked so hard to create, “to destroy,” as one of his artists says, “everything that he loved?”

That Larry Salander could have gotten into so much trouble over money is something that many of his closest friends would never have imagined, because money never seemed to be what drove him. His great passion, almost to the point of obsession, was not the business of art but art itself. A painter of some note, whose 1992 work Crucifixion is part of the Smithsonian’s collection, Salander had an almost childlike exuberance about art—“a tremendous enthusiasm,” says the New York dealer David Tunick—that people could sense just on meeting him. A big man, often dressed in his trademark T-shirts and baggy suits, Salander could be charming and gracious, like so many New York dealers, but he had an intensity and a bluntness, an unvarnished quality that set him apart. A man of strong emotions, he would speak about creativity and art in transcendent terms; the great masterpieces, he sometimes said, were the clearest proof that God existed. Salander loved art for its intrinsic beauty, its “aesthetic,” says Resika, as opposed to its place in art history or its price. This, many say, was reflected in the eclectic range of his gallery’s exhibitions. He would show contemporary American work one month, followed by an exhibition of Constable paintings and then Houdon sculptures.

What Salander would never allow in his gallery, however, was the art that is in so much demand today—the Pop art, conceptual work, avant-garde pieces, and celebrity productions whose prices have been driven to dizzying heights in the past several years by an army of new collectors. Damien Hirst, Jeff Koons, Jean-Michel Basquiat, Richard Prince—these were among the artists whose work Salander openly disdained. A classicist at heart, he regarded much of the new art as gimmicky and slick, as art created only for money. Such works, Salander felt, were “no longer about art,” says the sculptor Michael Steiner, “but about the people who buy art.”

In the past 20 years, since art-market prices first began to spike in the late 1980s, the kind of people who buy art has slowly evolved. While there have always been investors with extremely sophisticated taste who take the time to educate themselves about the art they buy, an increasingly large segment of investors has not bothered with connoisseurship and has simply bought art that was in vogue and likely to turn a profit. In the past six years, as the art market has exploded, this trend has become even more pronounced.