“And this doesn’t just apply to the Russians. This is a general cultural thing whereby anyone with money is encouraged to come here. You can effectively buy residency. You’ve got non-dom status, which is very attractive, you’ve got the anonymous companies where beneficial ownership remains hidden, so to this day we have around 100,000 properties in this country whose owners are unknown.”
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He told Swiss publication Le Temps that Rybolovlev owes his company “tens of millions of euros,” while claiming that the oligarch set him up after failing to cough up the cash for Rothko’s No. 6 – Violet, Green, and Red. “[Rybolovlev] couldn’t pay the balance of the last painting he bought from my company, the most beautiful Rothko in the world.” Invited by the buyer to chat, Bouvier “fell into an ambush” as he was detained and handcuffed by eight police officers.
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.
Regardless of whether this provision ultimately is enacted, the underlying issue will persist.  This post discusses some of the general concerns that the art and antiquities world can be misused as a conduit for dirty money.  We then discuss the AML Standards for Art Market Operators proposed by the Basel Institute on Governance, and similar standards set forth by the Responsible Art Market, both of which attempt to set forth a framework for those in the business of trading art to mitigate their money laundering risks.

Most of these industries have checks. Real estate titles and deeds at least require a name. Mortgage brokers, stockbrokers, casinos, banks and Western Union must report suspicious financial activity to the federal Financial Crimes Enforcement Network. Banks must report all transactions of $10,000 or more. Altogether, the network logs more than 15 million currency transactions each year that can be used to track dirty money, said Steve Hudak, a spokesman for the agency. The art market lacks these safeguards. Roll up a canvas and it is easy to stash or move between countries; prices can be raised or lowered by millions of dollars in a heartbeat; and the names of buyers and sellers tend to be guarded zealously, leaving law enforcement to guess who was involved, where the money came from and whether the price was suspicious.


Price fluidity is one of the key advantages of using artwork for money laundering. Coupled with a lack of a regulatory body authorized to oversee the value of art, pricing art is effectively a free-for-all. For example, after 9/11, Americans yearned for nostalgia, including Norman Rockwell paintings. Some of his folksy paintings tripled in value — from $15 million in 2006 to $45 million seven years later.
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.
“The tax laws in art make it basically legal to not pay taxes on art. If you’re a serious art buyer, you just get a good tax accountant,” former New York-based art consultant Beth Fiore tells Hopes&Fears. “If you show newly purchased works in certain museums then you never have to pay taxes on it.” Edward Winkleman of Winkleman Gallery maintains that his gallery keeps fastidious records of all transactions and pays taxes even on cash sales. But he admits that, “the state generally wouldn't question what is reported.” He also tells us that individual sales don’t need to be reported, only the totals for each quarter. Hypothetically, someone could buy millions of dollars worth of art without the IRS knowing, and then later sell those works for a “legitimate” profit that looks clean on taxes.
Over the years Bouvier has shifted his core business from art transportation to building and operating vast, secretive high-tech fortresses used for storing not just artworks but cars, wine, coins, and furniture. Such repositories, known as free ports, have existed for centuries, but until quite recently their primary purpose was to hold raw materials in transit—a shipment of soybeans, say. They were found primarily in transit zones, such as airports and canals, and they usually enjoyed one of the benefits of existence at the jurisdictional margins: tax and duty freedom.
Russian oligarch Dmitry Rybolovlev had decided to send off a tough 2014 in New York City. The Monaco-based billionaire had been in the headlines for all the wrong reasons after a Swiss judge awarded his ex-wife Elena $4.5 billion in their seven-year divorce battle. An avid art collector, Rybolovlev decided to spend New Year’s Eve with Sandy Heller, Steve Cohen’s well-known art adviser. As they exchanged war stories, one particular tale made his jaw drop: it was about a beautiful Nude by Italian artist Amadeo Modigliani that Cohen sold for a juicy $93.5 million to a mystery buyer. What Heller didn’t know was that behind the veil of anonymity stood Rybolovlev, fuming internally on that December 31. Rybolovlev had paid his trusted friend and art broker Yves Bouvier $118 million for the piece, more than $22 million above what he just found out the market value should've been, including the fee. Not one to sit around, the oligarch went for the jugular, filing a criminal complaint in the Principality of Monaco for fraud and money laundering only nine days later. In what promises to be the biggest art scandal of 2015, Bouvier was ambushed by eight police officers who took him into custody this February, tricked by Rybolovlev himself as they were set to discuss payment terms for a masterpiece by Mark Rothko. He’s currently out on bail.
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.

In the interviews, Simpson is cagey about some of his business practices, and professes ignorance about the sources used by Christopher Steele, the former British intelligence officer who assembled the reports in the dossier. (Since lying to the committee would be a crime, it’s reasonable to assume his testimony is not deliberately false.) What’s most interesting is all the threads Simpsons mentions about possible Trump connections he’d reviewed with various Russians, with mobsters, and with others. For the most part, they’re just allegations: If Simpson has proof, it’s not disclosed in the transcripts. More often, they seem like tantalizing possibilities worth exploring more, but which Simpson was unable to nail down.

In the shady world of art, private transactions are amongst the most opaque, which is exactly what this case is about. Bouvier, who takes credit in having built Rybolovlev’s collection into “one of the finest in the world,” admits to having worked with the oligarch for ten years, having sold him forty “major works,” reportedly from artists including Picasso, Gauguin, Degas, and even a controversial Da Vinci. Specifically, Rybolovlev’s family trust (which controls his collection) claims Bouvier defrauded them by taking a broker’s commission of 2% while charging an illegal, and hyperbolic, markup, using offshore companies to disguise his interventions.
Secrecy has long been central to the art world. Anonymity protects privacy, adds mystique and cuts the taint of crass commerce from such transactions. But some experts are now saying this sort of discretion — one founded in a simpler time, when only a few wealthy collectors took part in the art market — is not only quaint but also reckless when art is traded like a commodity and increasingly suspected in money laundering.
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.

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.
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.
A month later the Monte Carlo police arrested one Yves Bouvier, 52, Rybolovlev's longtime procurer of masterpieces, as Bouvier rang the buzzer at La Belle Epoque. A Geneva businessman described by Vanity Fair's French edition as "Swiss to the core," a man who "shuns both the mundane and the extravagant," Bouvier was well known in art circles as an art transporter and as the owner of mysterious storage facilities known as free ports—not as an art dealer or broker. He had been summoned to Monaco ostensibly to complete a long-delayed deal for his Russian patron, but he wound up in a jail cell instead, facing allegations of fraud and money laundering and the possibility of a long prison sentence.
Tucked behind Kensington Palace and protected by armed police at checkpoints on either end is the street known as Billionaire’s Row, the most expensive in London and perhaps the world. A private road owned by the Crown Estates, traffic is light and slow here, and a prohibition on photography is enforced by the private security guards who watch over every other house.
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.

So the first thing that I would do would be to subpoena the brokers and the people, the other people that were involved in the transactions, and the title  companies and the other intermediaries that would have that kind of information. Then I would go to the banks next. But I actually think some of the intermediary entities in a lot of these transactions are going to be where a lot of the information is….
We went with the police and about 20 Nigerians into the gallery the day before the opening. There were all of these fucking posh people sipping champagne, and in we came to shut it down. You should've seen their fucking jaws! I made a statement: "Don't touch the heritage of these people!" And it's not that I was a white knight-not at all. But I began to come across certain things that I just couldn't step over.

But Scotland Yard were onto him, and he was arrested while awaiting delivery of large importation. He skipped bail and fled abroad, fitted out a wooden ketch, loaded it with a ton-and-a-half of cannabis resin and crossed the Atlantic, using a sextant and dead reckoning. He eventually sailed up the Hudson and unloaded to a New York distributor, only to be caught in chase through the streets of Manhattan and sentenced to six years in a penitentiary.
On April 2nd, the New Directions in Anti-Kleptocracy Forum, organized by the Harriman Institute at Columbia University, will identify emerging issue areas relating to kleptocracy. I am excited to be serving as a co-panelist on the forum’s Art Market as a Node of Kleptocracy panel, which will discuss beneficial ownership and the luxury art market. Money Laundering Watch recently addressed the relationship between art and money laundering, a topic of growing interest.
The Toulouse-Lautrec work, “Au Lit: Le Baiser,” consigned for sale at Sotheby’s in London in 2015, depicts two women embracing on a bed. The Swiss dealer who brought the work to Sotheby’s, Yves Bouvier, signed the standard paperwork surrounding such a sale, which requires the consignor to indicate he or she either owns the painting or is authorized to sell it. After the sale, he was given the proceeds.
Most of the billions vanished into a twilight world of offshore companies. The scheme cleverly mingled fake transactions with real ones. Some of it was spent on luxury items: furs, diamonds, Swiss watches, German industrial equipment, fashionable children’s clothes, plus hotel suites in Alpine ski resorts used by Russian oligarchs. It also went to a pro-Kremlin thinktank in Poland.
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!

The billionaire, who is only 48, has in his lifetime faced down murder attempts, a year's imprisonment in Russia, a divorce ("the world's most expensive") so nasty it involved the arrest of his now ex-wife, and now is embroiled in the art scandal of the year, in which he claims he was duped for well over $1 billion by intermediaries he trusted. This is the case that's riding towards trial in Monte Carlo and in which he's been accused of evidence manipulation. (He denies this.)


In the United States federal money laundering statutes apply to nearly every major transaction through which illegal profits are disguised to look legal. Typically, dirty money is laundered through the purchase of, say, a penthouse apartment, or mixed in with the earnings of a legitimate business like a restaurant. When gambling winnings or drug proceeds come out the other end, they appear as a real estate asset or business profit. They look clean.
For the collector who sees his 1961 Petrus not as something to drink but as an asset to hoard and potentially sell, Bouvier offered an invaluable service. Items could not only be stored behind the free port's seven-ton doors, surrounded by laser trip wires and vibration detectors, they could be shown to other collectors there and traded or sold without moving an inch—and taxed only if they left the free port. Perhaps the most attractive aspect of all is that such transactions could take place beyond the prying eyes of a district attorney or a private investigator tracking down assets in a divorce battle. (As a result, many in the art world worry about a tendency for free ports to become "art cemeteries." The world's largest free port, at Geneva Airport, is said to hold as much art as the Louvre.)

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.


Regardless of whether this provision ultimately is enacted, the underlying issue will persist.  This post discusses some of the general concerns that the art and antiquities world can be misused as a conduit for dirty money.  We then discuss the AML Standards for Art Market Operators proposed by the Basel Institute on Governance, and similar standards set forth by the Responsible Art Market, both of which attempt to set forth a framework for those in the business of trading art to mitigate their money laundering risks.…

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Morland was heir to a Quaker dynasty that made a fortune turning sheepskins into coats, and lived a gilded youth: his father was a renowned physician and his mother was a key figure in the modern art world, friend of George Orwell and Henry Moore. At 6ft 3in tall, good looking and well connected, Morland skied for England, had a beautiful wife and children, a des-res in south-west London, a farmhouse in Malta and the world at his feet.


So the first thing that I would do would be to subpoena the brokers and the people, the other people that were involved in the transactions, and the title  companies and the other intermediaries that would have that kind of information. Then I would go to the banks next. But I actually think some of the intermediary entities in a lot of these transactions are going to be where a lot of the information is….
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The anecdote about Steve Cohen’s Modigliani comes straight out of the criminal complaint received on January 12, 2015 by Monaco’s Palais de Justice, and was confirmed by source close to the matter. While Bouvier may not be a household name in the U.S., the accusations and ensuing arrest reverberated across the European art market, where Bouvier runs a set of luxury warehouses across Geneva, Luxembourg, and Singapore where the world’s billionaires store their art, along with jewels, fine wines, and other luxury goods legally in tax-free zones.
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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