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The Wolf of Wall Street was a hit when it was released in 2013. Moviegoers all over the world loved the story of excessive wealth and greed. But most people didn’t know that the movie was partially funded by a money-laundering scheme involving famous works of art. Malaysian Prime Minister, Najib Razak, had siphoned part of a $1 billion fortune from the Malaysian sovereign wealth fund into American assets, such as real estate and paintings by Basquiat, Rothko, and Van Gogh.
Further, and as noted, other traditional vehicles for laundering money have become less attractive, thereby driving those who need a mechanism to launder large sums into the arms of the art world.  As we repeatedly have blogged, one of the most time-honored and relatively convenient vehicles for laundering — real estate — is under intense scrutiny and now is subject in the U.S. to the Financial Crimes Enforcement Network (“FinCEN”)’s ongoing Geographic Targeting Orders (these require U.S. title insurance companies in many parts of the U.S. to identify the natural persons behind legal entities used in purchases of residential real estate involving $300,000 or more and performed without a bank loan or similar form of external financing).
Edward Winkleman tells us that “transfer of title for digital art happens with an invoice. The collector generally receives a certificate of authenticity, which is required if they ever want to resell or donate the work to a museum. The artwork could indeed be delivered digitally, and payment could indeed be received digitally, but the bank records will show the transaction.”
But the partisan tensions bubbled over again Friday, with a skirmish over a report apparently produced by a splinter faction of Republican members of the House Intelligence Committee led by Nunes. The GOP majority voted Thursday night to share the report with colleagues, but not to release it to the general public. By Friday morning, however, Republican members of Congress were demanding the memo be made public—with their calls being amplified by Russian-linked Twitter accounts.
In this light Trump’s sprawling empire with deep ties to corrupt Russians looks less like a thriving real estate business, but something a bit more nefarious. Deniability was so built into the way he operated that his lawyers didn’t want him signing his own financial disclosures. The Donald’s Sergeant Schultz cavalier approach to business and political conflicts of interest mirror Russian oligarchs. In 2015, as Trump began to eat up air time on American political talk shows in the same way that a starving man eats his first meal in days, Putin may have sensed an opportunity…
On April 17, 2019, the United States Attorney’s Office for the Southern District of Florida (the “Government”) announced its non-prosecution agreement (available here) entered into with a Miami-based gold refinery, Republic Metals Corp. (“RMC”), related to the refinery’s failure to maintain a robust anti-money laundering (“AML”) program. RMC is the second American refinery whose AML program has been identified as deficient by the Government as part of its ongoing probe into gold imports from South American countries such as Peru, Bolivia, and Ecuador (dubbed “Operation Arch Stanton”). The Government’s decision to decline prosecution against RMC stands in stark contrast to its prosecution last year of another refinery, Texas-based Elemetal LLC (“Elemetal”), arising from the same probe.…
It is hard to imagine a business more custom-made for money laundering, with million-dollar sales conducted in secrecy and with virtually no oversight. What this means in practical terms is that “you can have a transaction where the seller is listed as ‘private collection’ and the buyer is listed as ‘private collection,’ ” said Sharon Cohen Levin, chief of the asset forfeiture unit of the United States attorney’s office in Manhattan. “In any other business, no one would be able to get away with this.”
The Italian and other governments are becoming far more aggressive in seeking the repatriation of looted antiquities. Italy in particular waged a long legal battle against Getty curator of antiquities, Marion True, for acquiring illicitly exported pieces, although the case finally exhausted the statute of limitations. And in recent years numerous American museums – including the Metropolitan Museum of Art in New York, Boston’s Museum of Fine Art and the Getty in Los Angeles – have been forced to return looted antiquities to their host countries. These include the famed Etruscan Euphronios krater (wine bowl) dating from 515 BC and which was bought by the Met in 1972 for $1.2m. It turned out that this had also been handled by Medici, and the museum gave it back to Italy in 2006. Just this month, the Getty said it was returning a 12th-century Byzantine illuminated New Testament to the Greek Dionysiou monastery – from which it had disappeared more than 50 years ago.
Philip Byler, Broadening’s lawyer in New York, said that the inaccurate invoices were merely a shortsighted attempt by the art dealer that Broadening hired to save importation fees. “It was not done with the intention of smuggling,” he said. He also challenged the Brazilian authorities’ claim, saying that “Hannibal” was legally purchased from a company owned by Mr. Ferreira’s wife.
So far, the release of transcripts of Fusion GPS founder Glenn Simpson’s interviews with the House Intelligence and Senate Judiciary committees have provided rich detail to obsessives but few major headlines for the average reader. The interviews give some more clarity on how Fusion came to investigate Donald Trump; who was paying the company; and how it gathered information, but they offer much help in assessing the Trump dossier.
When you sell your home the paperwork details the sale, including your name, and the title search lists the names of the people who owned the property before you. But when someone sells an artwork at auction — even something worth $100 million, much more than your house — the identity is typically concealed.  […] In finance, Treasury officials last year began asking banks to identify customers who set up accounts in names of shell companies. In real estate, they introduced a pilot program that requires the full identification of people who buy expensive properties in New York and Miami using cash and shell companies.
Happy with my work, the next time he took me to Armenia. He was smuggling of course, and when we got there we had drinks with the chief of police. There was a big organization bringing in lots of pieces from Moscow and Leningrad. The Russians and the Armenians were like mafia clans. They were very well-organized and working together. From there we took a bunch of art and flew to Beirut-the customs there were in on the game. We paid them off. That was basically the first time I smuggled on a large scale.
Francis Morland was one of Britain’s most talented young artists, a contemporary of David Hockney and Peter Blake and a leading member of the 1960s “New Generation” movement. At the same time he lived an even more remarkable secret life as the biggest drug trafficker in the UK. He stuffed his abstract sculptures full of Lebanese cannabis to ship to the lucrative American market, moved yachtloads of Moroccan hashish to Europe, and years before Howard Marks, became the country’s first recognised drug baron.
Still swirling around the market are persistent rumours that there is even more to the treasure than the known 14 pieces. Archaeologists claim that such finds always include spoons and coins, which were missing when the pieces started coming onto the market. Many believe they are still languishing in Swiss bank vaults, with the owner(s) waiting for the provenance issues to be cleared up entirely. It is to be ardently hoped that one day the whole hoard, in all its magnificence, will be returned to Hungary to be displayed together once again.
And in response to Beijing’s strict capital controls which make it illegal for an individual move more than $50,000 out of China per year, wealthy folks from China are turning increasingly to smuggling art out of the country instead. "Items can be bought and sold relatively anonymously, and even when a transaction occurs, complex ownership schemes -- many with a degree of secrecy attached -- are widespread," Paul Tehan of TrackArt, a Hong Kong-based art risk consultancy, told CNN. According to Tehan, senior managers of an art shipping company based in China were arrested for allegedly forging the value of imported art in order to help buyers avoid paying millions in duties.
"It's easy for [Bouvier and Rappo] to paint me as the stereotypical Russian oligarch," he says. But if he were so interested in hiding his assets from Elena, he says, why would he announce to the world that he had been the victim of a multibillion-dollar scam, in the process letting it be known how much his trusts had overpaid for each of his artworks?
To sum up, the Times muddles the very different issues of ensuring the integrity of works of art—the authenticity question—which is real and requires an entity that can work with owners who want to maintain their anonymity for legitimate reasons with the issue of beneficial ownership—which is less pressing with art because it is relatively rare and covered by the parallel system of KYC run by the banks the auction houses rely upon to vouch for their clients’ ability to afford the works they want to buy.
Rapid and dramatic rises—and collapses—in price are bad things for money laundering whose sole purpose is to find a relatively stable vehicle to mask the source of funds. Money launderers are not looking to make a profit on their purchases let alone a killing. In fact, a money launderer is willing to take a loss on the vehicle that hides the illicit source of the funds because that is the price of washing the money. If a money launderer buys something with dirty money that has the potential to be unsalable for clean money, it doesn’t work. Art, even some of the world’s best art, is often temporarily unsalable for a variety of real and legitimate reasons.
In fact Trump named Wilbur Ross, the former vice-chairman of the Bank of Cyprus, as his commerce secretary. That bank was involved in deals involving Putin’s inner circle in 2015, and incidentally, Rybolovlev had a 9.9% stake in the bank until 2013, after which he divested for undisclosed reasons. It’s very possible that Ross actually has no role in any of this as former employees say he actually drove Russian oligarchs from the bank over his tenure, and the offshores were only used for a failed bid to build a casino.

In this light Trump’s sprawling empire with deep ties to corrupt Russians looks less like a thriving real estate business, but something a bit more nefarious. Deniability was so built into the way he operated that his lawyers didn’t want him signing his own financial disclosures. The Donald’s Sergeant Schultz cavalier approach to business and political conflicts of interest mirror Russian oligarchs. In 2015, as Trump began to eat up air time on American political talk shows in the same way that a starving man eats his first meal in days, Putin may have sensed an opportunity…


Keep in mind that Kislyak is the same Russian ambassador who routinely met with numerous members of Trump’s campaign throughout 2016, discussing sanctions, Syria, and Crimea. If Trump really didn’t know what was going on, why is his son-in-law meeting with a bank that has spent years trying to avoid sanctions for laundering money for Putin’s inner circle and controlled by the Russian President himself? If we believe he was that oblivious, Trump’s ignorance of his own business operations would beggar belief.
Happy with my work, the next time he took me to Armenia. He was smuggling of course, and when we got there we had drinks with the chief of police. There was a big organization bringing in lots of pieces from Moscow and Leningrad. The Russians and the Armenians were like mafia clans. They were very well-organized and working together. From there we took a bunch of art and flew to Beirut-the customs there were in on the game. We paid them off. That was basically the first time I smuggled on a large scale.
"To put the mother of your two children in prison just not to give her money—what kind of person is that?" Rappo says. "This is the style of Mr. Rybolovlev, and that's exactly what happened to us. He wants to humiliate people and put such stress on them that they give up." (Rybolovlev brushes all this off and says Elena cannot stand to hear Tania Rappo's name.) I put it to Rappo: Why would Rybolovlev target her and Bouvier if not for the money he says they owe him?
The Wolf of Wall Street was a hit when it was released in 2013. Moviegoers all over the world loved the story of excessive wealth and greed. But most people didn’t know that the movie was partially funded by a money-laundering scheme involving famous works of art. Malaysian Prime Minister, Najib Razak, had siphoned part of a $1 billion fortune from the Malaysian sovereign wealth fund into American assets, such as real estate and paintings by Basquiat, Rothko, and Van Gogh.
Mr. Ellis serves as Director of Business Development and Marketing of AML RightSource. He has over 15 years of experience in business development, marketing, and professional consulting within the healthcare and financial services industries. Mr. Ellis earned his undergraduate degree from Bowling Green State University and obtained his juris doctor from Cleveland State University – Cleveland-Marshall College of Law.
Though relations between the Republican and Democratic members of the intelligence committee remain contentious, they seem to have improved since Chairman Devin Nunes stepped aside from the investigation amidst a bizarre escapade, in which the White House appeared to be feeding Nunes claims of ethical lapses by the Obama administration in handling intelligence information.
Recently, some countries in Europe, including Luxembourg and Switzerland, have passed laws to clamp down on money laundering in the art market. Starting in 2016, Switzerland will cap cash transactions at 100,000 Swiss francs ($135,000). Payments above that cash limit will have to be made by credit card, creating a paper trail, or the seller will have to carry out due diligence to ensure the legal origins of the funds.
He needed to be bailed out by his father in the 1970s, and then again in the 1980s to stave off bankruptcy. He ended up bankrupting multiple companies anyway and trying to hold banks hostage to forgive many of his debts after the Taj Mahal and Plaza Hotel were in dire straits. In 1995, his one year losses exceeded $916 million. Many of his businesses crashed and burned, and according to his ghost writer for The Art of the Deal, much of his business savvy was little more than bluster.
The United States similarly requires all cash transactions of $10,000 or more to be reported. Still, laundering involving art tends to be handled case by case. Federal prosecutors, who usually discover art-related laundering through suspicious banking activity or illegal transport across borders, have worked closely with other countries and aggressively used their powers under civil law to confiscate art that they can establish is linked to a crime, even in the absence of a criminal conviction.
Like most laundering cases involving art in the United States, this one was uncovered when the work was illegally transported into the country. In 2004 Mr. Ferreira’s financial empire, built partly on embezzled funds, collapsed, leaving $1 billion in debts. A court in São Paulo sentenced him in 2006 to 21 years in prison for bank fraud, tax evasion and money laundering, a conviction he is appealing. Before his arrest, however, more than $30 million of art owned by Mr. Ferreira and his wife, Márcia, was smuggled out of Brazil, Judge De Sanctis said.
Finally, under Guideline 6, the AML Guidelines provides that art businesses must maintain adequate records of their due diligence efforts. Perhaps stating the obvious, but perhaps also implicitly acknowledging the existence of practices by certain dealers, the AML Guidelines observe that “[a]ll documents issued by an Art Business in connection with a transaction (e.g. valuations, sale and purchase agreements, invoices, shipping documents, import / export declarations etc.) should be true, accurate and contemporaneous and represent the honestly held professional opinions of the Art Business.” Likewise, dealers “should refuse all requests from clients to alter, back date, falsify or otherwise provide incomplete or misleading documentation or information relating to a transaction. If there are legitimate reasons for altering a document (e.g. invoicing error etc.) the circumstances and justification should be fully documented and retained on file for future reference and audit.”
In March 2014, Bonhams withdrew a 2,000-year old Assyrian stele estimated at £600,000-£800,000  ($1m-$1.3m) and which was slated for auction on 3 April. The broken stone slab depicting a praying king – and containing a curse in cuneiform which would fall on anyone removing it from its site – was suspected of being looted from eastern Syria at an unknown date. The top half of the slab has been in the British Museum since the late 19th Century. Bonhams says that its piece was withdrawn for “further study”.

The Russian investigation into Laundromat has been cursory. One investigator admitted his probe into RZB had stalled. Two FSB agents visited their counterparts in Moldova and collected documents. There are suspicions the FSB’s real goal was merely to find out how much investigators knew. In March, Moldova complained that in recent months Russian agents had been harassing Moldovan diplomats arriving in Russia.
Michel: Well, by the time I was 15 I had been kicked out of seven schools. I must have been ADHD or whatever, because I fucking hated school and was always looking to start something for myself. So I began importing cheap hippie coats from Istanbul. They were basically sheepskins turned inside out with some sleeves on them. I began selling them in this hashish bar in Holland. They sold like fucking hotcakes. So I was going up and down between Istanbul and Holland quite a lot. Business was going well, and I was eventually approached in Istanbul by a man named E.
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The 2,200 photographs by masters like Alfred Stieglitz, Edward Weston and Edward Steichen — more than could fit into an 18-wheeler — were paid for, court papers say, with some of the $78 million that the authorities say Mr. Rivkin got from defrauding oil companies like Shell, Exxon, and Mobil. Mr. Rivkin, who has not been charged with any crimes, was last thought to be in Spain and had arranged to have the photos shipped there.
Say you’re an oligarch in a country that loathes them but is powerless to do anything about their existence because the highest levels of government profit off their businesses, legal and not. While you might think you have it made, your position is actually quite precarious. Pull on your leash too much and start commenting on politics, and you might just find yourself in jail for tax evasion and embezzlement, or sent into exile according to the template that shut down a critical news channel first, and stealthily re-nationalized an oil empire soon after that.
Her tale begins, naturally, with a call at four in the morning from Elena in 2008. "Crying like you cannot imagine, she said, 'Can you please come?' I say, 'Is somebody dead?' She says, 'No, but please come.' So at four I wake up, I get my car, I go to the hotel." There Elena tells her that by accident she came across documents on Dmitry's computer containing the passport information of various guests visiting the Rybolovlev yacht, including many "girls" and Dmitry's mistress at the time. This, Rappo says, was the event that triggered the divorce—Elena filed within weeks. (Inciden- tally, aside from advising Elena to consult a lawyer, Rappo denies hastening the breakup. "I tried for about two years to put them together," she says. It was Dmitry who made reconciliation impossible, she claims: "From the very beginning he said, 'Tell her she will have nothing.' ")
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E was established in the international art market, as well as the black market at the time. He must have seen some potential in me. Obviously you had to take risks in the art smuggling world, and he probably saw me as somebody who would take them, which was indeed true. I had a Dutch passport as well, which I'm sure didn't hurt. So E wanted me to take these stolen antique byzantine oil lamps and crucifixes back with me to Holland. I did, and sold them for top dollar to private collectors in Europe.
In the end, maybe this guide was never intended for amoral businessmen in the first place (unless we’ve sorely misjudged our readership!) Maybe this it's more useful to the emerging artists who look for validation (read: dollar signs) in a competitive market. Maybe the artist’s secret to success is appealing to the corrupt and becoming an accomplice to white collar crime (but hopefully not). Are economic criminals the driving force of the art economy? Probably not, but what we do know for certain is that art isn’t only valuable as the evidence of creative genius. It is, to many, a vault.
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