New York’s biggest-ever art fraud investigation claimed another casualty yesterday, when three- decade art market veteran Leigh Morse was arrested for her role as Lawrence B. Salander’s right-hand woman.

Morse, 53, dressed in an ivory jacket and black slacks, was charged with stealing from and scheming to defraud clients of the now-defunct Salander-O’Reilly Galleries LLC. She pleaded not guilty and was released on a $75,000 bond secured by her Riverside Drive apartment.

“She signed her home over to me,” Ira Judelson, a New York bail bondsman, said in an interview.

Salander also turned himself in and was re-arrested, four months after he was charged with stealing $88 million from clients and investors and artists. The office of Manhattan District Attorney Robert Morgenthau announced three additional counts against him and he pleaded not guilty. He’s free on $1 million bail he previously posted.

Morgenthau’s deputies said they’ve collected evidence that Salander stole from or defrauded 28 victims of a total of more than $92 million. The prosecutors couldn’t recall a larger art fraud case.

Creditors have filed papers claiming they’re owed as much as $300 million by the gallery, which was based in a lavish Upper East Side mansion and filed for bankruptcy in November 2007.

“As always, there is more to this case than meets the eye,” Salander’s lawyer, Charles Ross, said.

Andrew Lankler, Morse’s lawyer, declined to comment.

Other Galleries

Morse was a dealer long before she joined Salander, now 60. She worked for other American painting galleries, including Coe- Kerr in the 1980s, according to a dealer who worked with her. After Coe-Kerr closed in the early 1990s, she joined Babcock Galleries.

“I thought she was a stellar person,” said John Driscoll, owner of Babcock. “When she worked here, she was bright and on the ball and gracious and totally professional.”

At Salander-O’Reilly, where she worked from 1995 until it closed in October 2007, Morse sold artworks from the estate of Abstract Expressionist painter Robert De Niro Sr., father of actor Robert De Niro, and didn’t inform the estate of sales or remit proceeds, Morgenthau said in a press conference yesterday.

In May 2007, Morse sold two De Niro paintings and arranged for the $77,000 purchase price to be wired to her personal bank account, Morgenthau said.

‘Earned Trust’

As gallery director, “she earned the trust of the estates that turned over possession of their inherited art for the Gallery to exhibit and sell,” according to the District Attorney’s office. “Rather than communicate the truthful information to the respective estates, Morse intentionally misled them or failed to disclose the true status of their works,” the office said in a release.

Salander owes Morse money in back commissions, said Micki Shulman, deputy bureau chief of Morgenthau’s frauds bureau.

After Salander-O’Reilly closed, Morse opened Leigh Morse Fine Arts on East 80th Street, in a building with other dealers. A show she presented in March featuring the figurative painter, Lennart Anderson, received a favorable review in the Wall Street Journal.

Yesterday, Morgenthau accused Salander of arranging the theft of more than $5 million from several artists’ estates, including sculptors Gaston Lachaise and Elie Nadelman and painter De Niro.

Lachaise was a French-born American sculptor who rose to fame in New York in the early 20th century in modernist circles. He died in 1935. Morgenthau said Salander sold over $2 million of Lachaise works without informing the Lachaise Foundation, which aims to preserve the artist’s legacy.

Bronze Nude

Works included a monumental outdoor bronze of a graceful nude called “Floating Figure” and a large standing female nude, “Elevation.” It has the artist’s trademark nipped waist and ample hips, and was modeled on his wife and muse.

“The moral of this case is, be careful who you consign your artwork to,” Morgenthau said in a press conference.

Morgenthau’s office said alleged victims won’t recover money as part of the criminal cases but may do so in the bankruptcy proceedings. Morgenthau said Salander sold the same works multiple times to pay debts and to fund a lavish lifestyle, which included living in an Upper East Side townhouse and taking trips by private plane to Washington, D.C., and Europe.

“He was a pretty good spender,” said Morgenthau, who turns 90 at the end of the month. “I don’t think there’s very much chance of a recovery.”

Salander recently started working at a new gallery in Millbrook, New York, where he lives. He has been running it with his father-in-law, Donald Dowden, Dowden testified in bankruptcy court. Salander in May declined to discuss who is financing the venture.

Morgenthau’s deputies said they don’t know how to stop his art dealing, short of convicting him.