In a kind of junior Bernie Madoff Ponzi scheme of the art world, Lawrence B. Salander, 59, was arrested at 7:45 a.m. today at his 66-acre Millbrook, New York, estate and served, along with Salander-O’Reilly Galleries, a 100-count indictment for stealing $88 million from 26 victims, including investors, art owners, and a bank.

Victims ranged from Renaissance Art Investors, which acquired 328 Old Masters from Salander and then consigned the works back to him to sell, resulting in a $42 million loss; to Earl Davis, the son and heir of painter Stuart Davis, in the hole for $6.7 million.

One high-profile victim was tennis star and art collector John McEnroe, who lost $2 million over an investment in two Arshile Gorky paintings, Pirate I and Pirate II, which Salander had already sold to another duped investor. (ARTINFO has learned that one of the Gorky paintings, Pirate I, was loaned by McEnroe to David Anfams "Abstract Expressionism — A World Elsewhere" exhibition at Haunch of Venison in New York last fall, and the suspect picture was removed by authorities as a result of the criminal investigation.)

Presiding over a crowded press conference at One Hogan Plaza, Manhattan District Attorney Robert M. Morgenthau quipped that Mr. Salander “was a very good salesman.”

“This guy ought to be selling toxic loans for the government,” he said.

“Salander stole from his victims in two primary ways,” according to the D.A.’s press release. “He sold artwork not owned by him and kept the money; and lured investment money in fraudulent investment opportunities.”

One extraordinary sequence involved Brown Still-Life, a Stuart Davis painting owned 100 percent by Earl Davis and consigned to the gallery. In July 1994, a 50 percent stake was sold to Gerald Peters Gallery. In May 2005, Bruce Springsteen manager Jon Landau bought another 50 percent stake in the painting. Then, later that same month, Salander sold another 50 percent share to collector Elaine Rosenberg. And three months later, in August 2005, he sold the entire painting, to San Francisco/Santa Fe gallery Owings-Dewey Fine Art.

Asked by a reporter to go over that complex chronology, Morgenthau replied, “That’s why it took the grand jury six months to indict him.”

The storied Manhattan D.A. noted that the same grand jury had voted to stay on for another six months to investigate other aspects of the criminal case involving as-yet-unnamed associates who helped Salander execute his elaborate schemes.

Salander was arraigned in Manhattan Criminal Court this afternoon. If convicted of any of the felony charges, he could face a prison term ranging from as little as 1 1/3 to 4 years all the way up to 8 1/2 to 25 years.

At the arraignment, Salander pleaded not guilty to all of the charges, and his bail was set at $1 million. It isn’t known whether the bankrupt dealer, whose assets have been frozen in a separate bankruptcy proceeding, will be able to come up with the funds.