"Property (Seizure) Is Theft!"

The best-defense-is-a-good-offense department, gray market swindle division:

A woman charged with siphoning $80 million from charities has taken the initiative against the authorities, accusing prosecutors of theft after they seized artwork and luxury goods from her $35 million mansion in Manhattan.

Dina Wein-Reis, 44, is accused of persuading Fortune 500 executives to let her buy their companies' products at bargain prices so she could resell them at full price and use the proceeds to help charities. Prosecutors say that Wein-Reis sold the goods on the "gray market" but kept $80 million for her shell companies.

In total, Wein-Reis has $100 million in personal assets, with $6.5 million in cash, according to a document filed November 5 in federal court in Manhattan. She also owns seven homes, according to real estate records, including a mansion and an apartment on the Upper West Side of Manhattan; a home in Westhampton, New York; and a condominium in Florida.

Federal prosecutors in Indiana, where many of her companies are incorporated, indicted Wein-Reis and five others on fraud charges in late October 2008. Wein-Reis, who is free on a $10 million bond, has petitioned to be tried in New York.

Her real battle, though, is over her voluminous art collection, 27 bank accounts, and collections of jewelry and Montblanc pens. Prosecutors took possession of the property as part of their investigation; Wein-Reis's lawyer, John Meringolo, filed a motion late last month contending the assets were "improperly seized."

At stake are works by Robert Motherwell, Frank Stella, Egon Schiele, and Andy Warhol, as well as jewelry from Rolex, Tiffany, Cartier, and Chopard.

In court documents, Wein-Reis asserted prosecutors were empowered to seize only things paid for with ill-gotten gains. She contended that not all of the items were directly linked to her business dealings.

"Those pieces of art alone would be worth close to $30 million," Janet Myers, a private art dealer in New York said. "It's typical to have art collections seized if criminal activity is suspected. I've had clients, whom I'm not at liberty to name, who have either had threats of that happening or had it happen."

Meanwhile, more than 20 character witnesses have been summoned to her trial, according to court documents. Among those on the record defending Wein-Reis was Whitney Museum curator Barbara Haskell.

"I have always regarded Dina as a person who cared about others," Haskell wrote in a letter to New York federal District Judge Shira Scheindlin. "She certainly has cared about me. I am prepared to stand as a character witness should it be helpful to her."

In his own letter to the judge, Wein-Reis's husband, David Reis, wrote that "Dina is a great woman.... She has helped the sick, needy and less fortunate."

Prosecutors -- and a number of Fortune 500 executives -- beg to differ.

Fifty companies have sued Wein-Reis and her codefendants, accusing them of fraud. The plaintiffs include Balance Bar, Bausch & Lomb, Campbell's, Bic, Eastman Kodak, Gillette, Kraft, Nestle, Sara Lee, and Unilever.

In a letter Roche Diagnostics Corp. filed in the case, the Indianapolis-based company asserted that "firms owned by Wein-Reis fraudulently arranged to buy nearly $12 million worth of diabetes care products at a steep discount."

Wein-Reis allegedly tried to resell the products to retail stores. One, Walgreens, informed Roche of the botched sale. Roche sought $10 million in compensatory and $30 million in punitive damages; court documents say it settled privately for an undisclosed amount of money.

If convicted, Mrs. Wein-Reis could serve up to 17 years in jail.

by Joan R. Magee