So, with the help of a girlfriend who speaks better English, the potentate asked Heller, "What price did you sell it for?" The answer: $93 million, $25 million less than Rybolovlev's trusts had paid for it. Chuckling, Rybolovlev tells me his fellow diners at the Eden Rock "thought I was having a stroke." Less cheerfully he says it was the worst New Year's Eve of his life. Within minutes he was on the phone to Bersheda. For years, according to Rybolovlev, he believed he had been paying the middleman who had sold him the Modigliani (above)—as well as 37 other museum-worthy paintings—a commission of 2 percent (in other words, about $2 million for the Modigliani, not $25 million). He was now realizing every collector's worst fear: He had been fleeced, and the question was, for how long and how much?
Of course, beyond AML-related process concerns, any art dealer — just like any business person — always must remember that just about any financial transaction that involves proceeds known to have originated from illegal activity represents a criminal money laundering offense.  Stated otherwise, even if the BSA is not expanded to include dealers in art and antiquities, those in the U.S. art industry still need to bear in mind, in extreme examples, the omnipresent federal criminal code.  Sometimes, the provenance of the funds can be more critical than the provenance of the art.

The data also shows payments to talent agencies, in London and California. The Laundromat was used to book artists on tours of Russia. They include the Florida rock band the Red Jumpsuit Apparatus and Israeli singer-songwriter Yoav. Both played in Moscow and St Petersburg in the autumn of 2013. There is no suggestion the artists were aware of the scheme.

The theory is that both sides would have something to gain. For Russian oligarchs and mobsters, there’s a need to launder money. “Generally speaking, the patterns of activity that we thought might be suggestive of money laundering were, you know, fast turnover deals and deals where there seemed to have been efforts to disguise the identity of the buyer,” Simpson told the committee in November. Trump, meanwhile, was in need of liquidity, because many banks were unwilling to do business with him after a corporate bankruptcy, and Russian buyers could provide quick infusions of cash. In other cases, the Trump Organization has appeared to have gone out of its way to avoid doing due diligence on business partners.
Having turned the craft of international art smuggling into an art in its own right, Michel Van Rijn was once wanted by authorities all over the world for sneaking valuable pieces of art across sea and land. With millions in the bank, Michel lived the life of a playboy. He owned private planes, enjoyed a harem of beautiful women, and did business with some of the world's most dangerous criminals-many of whom were members of various governments (and probably still are).
In the tight-knit world of art dealers and mega-buyers, where insider information is the name of the game, Bouvier's case could be prove to be a game changer, as it potentially pits collectors against brokers, putting inherent conflicts of interest in the spotlight. At the same time, Rybolovlev is playing a high-stakes game, as a sophisticated collector and global businessman of his stature is not one who doesn't understand the risks he's taking. His lawyer claims other "victims" of Mr. Bouvier have already approached them, while the embattled King of the free ports believes he will clear his name in a Monaco court. Whatever happens the impact could be permanent.
To be greeted by a Russian-speaking security team at La Belle Epoque, Rybolovlev's Monaco residence (reportedly the most expensive apartment in the world, worth $323 million), is not a surprise, then. The three-story penthouse also happens to be the scene of Monaco's most infamous murder, that of the Lebanese-Brazilian banker Edmond Safra, who was killed in a botched arson attempt by one of his caretakers in 1999. British developers Nick and Christian Candy subsequently renovated the manse to resemble a modern Versailles. My heels click-clack on the marble floors as a pleasant but pale aide-de-camp ushers me into the living room, where Rybolovlev's young lawyer, Tetiana Bersheda, tall and thin, with diamonds around her neck and wrist, soon comes to fetch me.
← The crate went through customs with a valuation of $100, though it contained Basquiat’s 1982 painting Hannibal (commodities valued under $200 aren’t required to be declared at customs.) The painting had been bought and shipped by Brazilian Banker Edemar cid Ferreira in an elaborate scheme to launder over $50 million that was illegally obtained when Ferreira’s bank, Banco Santos, went bankrupt.

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Rybolovlev now says he didn't want his marriage to end—nor, he felt, did Elena. He believes it could have been saved, but Rappo, whom Elena was close to, "pushed her"—his words—not to reconcile, because, he says, Rappo (and Bouvier, with whom he believes Rappo had formed a secret partnership) wanted "the story of my divorce" to cover what he calls Rappo and Bouvier's unfolding scheme. That alleged plot, which Rappo and Bouvier deny, involved defrauding Rybolovlev—hiding from him the enormous markups on the masterpieces he was acquiring through them—in order to finance an ambitious expansion of Bouvier's free port empire. And Rybolovlev, even if he found out, would have no choice but to go along.
Price flexibility in the art world is just one of the many advantages for a certain subset of the criminals — money launderers. Other advantages include portability, lack of a paper trail, anonymity, and no regulations. Artwork is lightweight compared to other valuables, like gold and cash. Artwork is bought and sold with minimal paperwork, unlike real estate. Artwork purchases can be anonymous, unlike everything else.
If you think that it would be a major oversight to allow people to create plausible deniability just by setting up enough legal entities with limited liability between themselves and their partners, you would be correct. It’s actually illegal under the FCPA, or the Foreign Corrupt Practices Act, which requires basic due diligence prior to making any deals with foreign citizens or in other nations. Domestically, RICO (Racketeer Influenced and Corrupt Organizations Act) goes after opaque arrangements that hide crimes like tax evasion and money laundering to create plausible deniability.
Meanwhile, Trump was exploring a foray into reality TV about a St. Petersburg-based MMA fighter and his son, Donald Trump Jr., told the media that “Russians make up a disproportionate amount of Trump assets,” a claim his brother Eric would take even further in 2014 when he said that Trump has “all the money [he] needs from Russia” and cited golf-loving oligarchs investing over $100 million in the family business. Eric would later deny he ever said any such thing, playing into his father’s campaign against “the lying media and its fake news” when this story was dug up earlier this year by journalists.
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.
According to former art consultant Beth Fiore, people don’t normally buy art with cash in the US; “Cash payments for art happen in Russia [and the] Middle East” more often. So if you’re keeping your fortune under your mattress and don’t live in either of those places, you’ll need to get your money into a bank account without alerting the authorities. One way to do that is by smurfing. Despite the mental image of a blue cartoon character riding a surfboard that you may have conjured, smurfing means depositing money into a bank account or several bank accounts by breaking it up in to many small amounts that are deposited at different times, by different people. US banks must report any deposits over $10,000 to the IRS, so in order to stay sneaky, you’ll need to make a series of deposits that are less than that amount. You can hire “smurfs” to help you, who are often ordinary people willing to make an extra buck by opening up a joint bank account in their name, that you or your company has access to, and depositing money into it every day.
Schiff accused Republicans who have circulated the memo of carrying water for the White House. “It’s a bit of a hodgepodge of false statements and misleading representations,” he said, and argued that the report sought to mislead the public, relying on the expectation that the classified information that underpins and contextualizes it would never be made public.
Besides that, there are other ways which an expensive art piece may be used to launder money. The underlying principle is this: there is no "standard answer" on how to launder money. Money laundering is more like an art than a science. As long as the whole process looks logical, reasonable and realistic, it is up to your creativity how you want to launder money with it!

We empirically analyze the illicit trade in cultural property and antiques, taking advantage of different reporting incentives between source and destination countries. We thus generate a measure of illicit trafficking in these goods based on the difference between imports recorded in United States' customs data and the (purportedly identical) trade as recorded by customs authorities in exporting countries. We find that this reporting gap is highly correlated with the corruption level of the exporting country as measured by commonly used survey-based indicies, and that this correlation is stronger for artifact-rich countries. As a placebo test, we do not observe any such pattern for U.S. imports of toys from these same exporters. We report similar results for four other Western country markets. Our analysis provides a useful framework for studying trade in illicit goods. Further, our results provide empirical confirmation that survey-based corruption indicies are informative, as they are correlated with an objective measure of illicit activity.


Over the last decade, economic forces on a global scale have overrun the art world—visibly to all, in the case of the gargantuan bids casually tossed out at the evening sales, but all but imperceptibly (except to a tiny and in-the-know elite) in other areas—and no one has been more at the center of it, or better epitomized its drive for concealment, than the canny Bouvier. In Switzerland a business owned by Bouvier's family, Natural Le Coultre, is one of the country's oldest transporters of goods, formerly of all kinds but since the 2000s of fine art exclusively. The shift in strategy was not coincidental. As the Economist and others have pointed out, "collectibles [such as art] have outperformed stocks over the past decade," aided in part by the world's string of financial crises. In fact, for some ultra-wealthy individuals art has become the asset of choice, for not only does a Modigliani nude hold or increase its value, it is an easy asset to move or hide.

"[If ] he would have asked me," she says, "I would have told him." The question echoing around the art world is how one of the world's richest, toughest investors—whose trusts own the penthouse at 15 Central Park West (bought for $88 million in 2012 and occupied by his daughter Ekaterina, a college student at the time); two entire Greek islands (Sparti and Skorpios, famous for hosting Jacqueline Kennedy's wedding to Aristotle Onassis); the Maison de l'Amitié (a Palm Beach mansion bought from Donald Trump for $95 million, which Rybolovlev reportedly intends to demolish due to mold problems); a $20 million property on Kauai bought from Will Smith; a $100 million yacht; homes in Gstaad, Geneva, Paris, and Monaco; and AS Monaco, the soccer team—could make himself so vulnerable. Was he, like many new billionaires, in such a hurry to build a glittering collection that he failed to "learn art," as experienced patrons know one must to avoid overpaying? The art market is often described as insider trading conducted by a small but sophisticated network of "experts" who prey upon the naïveté of the nouveau riche. Did Rybolovlev, a famously shrewd and strategic investor, underestimate its ability to confound and deceive? Until now he hadn't talked.
Rybolovlev ultimately invited me to La Belle Epoque because he has a story to tell, or rather explain. For the last year he has been at the center of the most astonishing scandal in the art world in years, an alleged billion-dollar fraud that has dealers, artists, and collectors sweating. At stake may be not just the money of an angry and very powerful man intent on recouping his losses but the thing the art world values more than anything: the freedom to operate in darkness.
“Before we looked into the allegations that Trump campaign people were surreptitiously meeting with the Russians it was only an allegation, but it proved to be all too true,” Schiff said. “Before we looked into allegations that Mike Flynn was having secret communications with the Russians and that the Trump transition might be seeking to undermine the sanctions imposed on Russia over its interference to help the Trump campaign, that was only an allegation, but that proved to be true. There's simply no way to either verify or be able to dismiss these serious allegations without looking into them.”
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“Before we looked into the allegations that Trump campaign people were surreptitiously meeting with the Russians it was only an allegation, but it proved to be all too true,” Schiff said. “Before we looked into allegations that Mike Flynn was having secret communications with the Russians and that the Trump transition might be seeking to undermine the sanctions imposed on Russia over its interference to help the Trump campaign, that was only an allegation, but that proved to be true. There's simply no way to either verify or be able to dismiss these serious allegations without looking into them.”
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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.”

Having turned the craft of international art smuggling into an art in its own right, Michel Van Rijn was once wanted by authorities all over the world for sneaking valuable pieces of art across sea and land. With millions in the bank, Michel lived the life of a playboy. He owned private planes, enjoyed a harem of beautiful women, and did business with some of the world's most dangerous criminals-many of whom were members of various governments (and probably still are).

Rybolovlev now says he didn't want his marriage to end—nor, he felt, did Elena. He believes it could have been saved, but Rappo, whom Elena was close to, "pushed her"—his words—not to reconcile, because, he says, Rappo (and Bouvier, with whom he believes Rappo had formed a secret partnership) wanted "the story of my divorce" to cover what he calls Rappo and Bouvier's unfolding scheme. That alleged plot, which Rappo and Bouvier deny, involved defrauding Rybolovlev—hiding from him the enormous markups on the masterpieces he was acquiring through them—in order to finance an ambitious expansion of Bouvier's free port empire. And Rybolovlev, even if he found out, would have no choice but to go along.
Stories of art and money laundering tend to be media friendly, and often involve the wealthy behaving poorly.  In one notorious case, the Department of Justice (“DOJ”) seized, via a civil forfeiture action, Jean Michel Basquiat’s 1981 painting, Hannibal. This work — later returned to Brazil by the DOJ — had been smuggled into the U.S. by Edemar Cid Ferreira, a former Brazilian banker who was convicted of money laundering and other offenses, and who allegedly converted some of his laundered proceeds into a significant art collection.  According to the DOJ, although Hannibal had been appraised at a value of $8 million, it had been smuggled by Ferreira into the U.S. from Brazil, via the Netherlands, with false shipping invoices stating that the contents of the shipment were worth $100.  Other stories provide less genteel tales of drug cartels, terrorist organizations and other criminal syndicates financing themselves through systemic looting and the illicit antiquities trade.
Having turned the craft of international art smuggling into an art in its own right, Michel Van Rijn was once wanted by authorities all over the world for sneaking valuable pieces of art across sea and land. With millions in the bank, Michel lived the life of a playboy. He owned private planes, enjoyed a harem of beautiful women, and did business with some of the world's most dangerous criminals-many of whom were members of various governments (and probably still are).
The wealthy figured this out in a big way back in the 1980s, giving rise to ‘art stars’ valued in the millions. And with the increasing popularity and geographical scope of biennials and art fairs in the 1990s, rich people all over the world now have access to seas of multi-million dollar investments that can be rolled up and stored just about anywhere.
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