Rybolovlev has turned up the legal pressure on Bouvier. Beyond getting him arrested in Monaco, the oligarch’s legal team, headed by Tetiana Bersheda, got Singapore’s High Court to impose a $500 million freeze on Bouvier's assets, his MEI Invest Limited, and supposed accomplice Tania Rappo. In Geneva, public prosecutor Jean-Bernanrd Schmid conducted a search in Natural Le Coultre’s headquarters and a gallery looking for documents related to the Modigliani and Da Vinci transactions. Rybolovlev is operating through the two holding companies that own the art collection, Accent Delight International and Xitrans Finance.
Their money leaves Russia to be laundered, usually through Cyprus and then on to the British Virgin Islands, where offshore companies are set up, often owned by offshore trusts based in places such as Gibraltar. Thoroughly washed, it arrives in London to be invested in the property market, with Russians often prepared to pay well above the odds for a prestigious property.
Art Businesses should also consider the form of the transaction, such as whether the transaction is taking place through intermediaries, face to face, entirely via the Internet, over the phone, or by any other similar non face to face means. In some circumstances, depending on the nature, value and/or geographic location of the transaction, enhanced due diligence may be appropriate.

The debate about anonymity in the art world has intensified over the past year, fed in part by the release of the so-called Panama Papers, which detailed the use of corporate veils to conceal ownership, dodge taxes and enable crime, its authors say. Now various expert groups, like the Basel Institute, are coming forward with ways for dealers and auction houses to curb secrecy and combat money laundering. In a significant change, Christie’s said last week it has strengthened its policy in recent months and now requires agents looking to sell a work through the auction house to tell it the name of the owner they represent.

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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.)
The bank bought an $850 million stake in a Ukrainian steel mill through a mystery middleman, then sold it to Russian-Canadian investor Alexander Shaider. This investor who would then fund Trump International Hotel and Tower in Toronto, and pay the consulting and licensing fees to label it a Trump property and bring it under The Donald’s umbrella in the public eye. In fact, this is how Trump’s name ended up on so many buildings. It’s licensed while its true owners are out of sight, and out of mind.

I'm not going to bullshit you. Single shipments from Russia were between one and three million, which in the 60s was a lot of money. And these were regular trips-twice a month. It was raining money so I made my base in Beirut. Moneywise Beirut was a free banking market, so you could exchange a million dollars completely open on the square and no one would ask any questions. Of course you had to play the cat and mouse game with Interpol.


There is no comparable entity in the art market. But were the same type of program instituted in the art market, it would only require that the auction house, dealer or lawyer know the beneficial owner and be able to reveal that information to federal authorities. It would not require the other side of the transaction to learn the seller (or buyer’s) identity.
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.
Of course, certain countries already impose AML regulations on the art world. The European Union Commission issued its 5th Anti-Money Laundering Directive in June 2018, which must be implemented by Member States by January 2020, and which in part expands its coverage of “obliged entities” to persons trading in art, acting as intermediaries in the trade of art, or storing art in freeports, if the value of the transaction or a group of linked transactions equals €10,000 or more. In the United States, although the BSA already applies to dealers in precious metals, stones and jewels, and thereby requires them to file Suspicious Activity Reports and comply with other AML obligations, no such rules currently apply to U.S. dealers in art.
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.
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.”
"Mr. R would like to meet you in his office," Bersheda says. "It's cozier." We walk down the hall and confront a wooden door without handles. I pause. It slides apart as if we're in a James Bond movie, and behind it stands Rybolovlev with an unexpectedly warm smile. He's slim and dressed in a crisp blue-and-white-striped shirt, charcoal pants, and black velvet slippers—a signature Russian touch. "Thank you for coming," he says. He looks younger than in photographs, and softer, perhaps because he's not wearing his usual rectangular metal-rimmed spectacles.
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.
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.
Bouvier is accused of fraud and complicity with money laundering along with an accomplice, Tania Rappo, and a third person who hasn’t been immediately identified according to Monaco General Prosecutor Jean-Pierre Dreno, who didn’t respond to Forbes’ requests for comment. The embattled Swiss is out on bail, set at €10 million and to be paid in three installments, and is ready for war.
There are no accepted estimates on the amounts of money laundered through the art market, although the general belief is that it is enormous and expanding as regulations on other asset classes, from real estate to foreign exchange, tighten up everywhere. The International Monetary Fund estimated that "the amount available for laundering through the financial system" was worth 2.7 per cent of global gross domestic product in 2009 or $1.6-trillion (U.S.).
where Rybolovlev was informed that the Kremlin was reopening a potentially bankrupting investigation into the collapse of a mine belonging to Uralkali. Understanding the government's interest in his company and that his days of owning it were numbered, Rybolovlev cashed out, leaving his estimated net worth somewhere between $8 billion and $13 billion. He then focused on trolling the world for other investments. In 2010 he moved to Monaco, his trusts buying La Belle Epoque. His trusts also bought a majority stake in the AS Monaco soccer team in 2011. And in 2012 a broker recommended by Rappo sold his trusts the penthouse at 15 Central Park West. Rybolovlev says that Rappo called him as the deal was closing. "I've been offered a commission of $100,000," she told him. "Would you mind if I accepted?"
Let’s get back to the real estate pilot program that lies at the heart of the Times’s confusion. That federal program, which may or may not be continued, relies upon mortgage title insurance companies to report to authorities the ultimate beneficial owner of any vehicle used to buy or sell very valuable real estate. It does not require the seller to reveal the beneficial owner to the buyer or vice versa.
But while Simpson saw disturbing patterns, he was unable to nail anything down, because he couldn’t get the relevant records from banks and other financial institutions. Schiff posed an interesting question: Simpson didn’t have subpoena power, but the committee did. Who should it subpoena if it wanted to learn more? Simpson laid out a roadmap for Schiff:
"We had a sincere friendship," Rybolovlev says. The two families vacationed together, with the Rybolovlevs often treating the Rappos to trips on private airplanes and their yacht. When Elena gave birth to a second daughter, Tania was asked to be godmother. Meanwhile the Rappos escorted the Rybolovlevs as they began making the rounds, helping them get into an exclusive golf club and chaperoning them to society events. As the Rybolovlevs expanded their real estate empire internationally, Tania Rappo also introduced Rybolovlev to real estate brokers abroad (at his request, she says).
Schiff, however, has long been interested in the idea. “The allegation that concerns me most is ... the issue of money laundering, and not money laundering alone by Mr. Manafort but whether the Russians also laundered money through the Trump Organization,” he told me in October. “I mention that because when most people think of kompromat, they think of the salacious video. But if the Russians were laundering money... that would be a very powerful lever the Russians would have over the president of the United States.”
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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.
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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.)


"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?
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.
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.)

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.' ")
Around the same time, a lawsuit against Sater and Bayrock is gaining steam, accusing the two key Trump partners in evading taxes on $250 million through various real estate projects the trio would work on. Officially, Sater is no longer an advisor to Trump and says the two just sporadically kept in touch, although in 2016 he would max out contributions to Trump’s presidential campaign and praise him in American and Russian media.

The AML Standards for Art Market Operators (“AML Standards”) are set forth by the Basel Institute on Governance, an independent not-for-profit organization.  Not surprisingly, the AML Standards adopt a “risk based” approach to establishing measures to mitigate money laundering risks, and further note that “[s]mall businesses may not have the resources to address money-laundering risks in the same way that large auction houses or major dealers and galleries will have, and may have a different risk exposure.”  The AML Standards are intended to apply to everone trading in art objects, and intermediaries between buyers and sellers.  They also suggest that service industries supprting the trade in art objects that are already subject to AML laws, like financial institutions, should identify their clients and customers in the art trade “as higher risk as long as there are no internationally applicable standards.”
Anonymity was certainly a factor in the success of the scam that took down the estimable Knoedler gallery in New York after 165 years in business. Some $80 million was turned over by collectors to purchase unknown, albeit fake, “masterpieces” that were brought to market by a Long Island art dealer and her boyfriend. They said all the work had come from a mystery collector who became known as Mr. X. In fact, they were being created by a forger in his Queens garage.
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.
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.
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.

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.
The story came to a partial resolution last month, when the Hungarian government announced that it had acquired seven of the 14 pieces from the heirs of Peter Wilson for  €15m (£12.4m). As for the Northampton part of the cache, its fate remains mysterious: Lord Northampton divorced his fifth wife in 2012 with a secret settlement said to be worth £17m: it is not known if she received part of the hoard in the deal.
This painting, known as “Hannibal” after a word scribbled on its surface, was brought into the United States in 2007 as part of a Brazilian embezzler’s elaborate effort to launder money, the authorities say. It was later seized at a Manhattan warehouse by federal investigators who are now preparing to return it to Brazil at the behest of law enforcement officials there.
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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.

Briefly: On New Year's Eve 2014, Rybolovlev found himself at the Eden Rock St. Bart's eating with Sandy Heller, a New York art consultant who advises many hedge fund managers. Somewhat obliquely Heller said, "It looks like you bought the Modigliani [we sold]." He was referring to Reclining Nude with Blue Cushion, one of the artist's most famous canvases, painted in 1917. The painting had belonged to Steven A. Cohen, the founder of SAC Capital Advisors and also one of the richest men in the world.
Around the same time, a lawsuit against Sater and Bayrock is gaining steam, accusing the two key Trump partners in evading taxes on $250 million through various real estate projects the trio would work on. Officially, Sater is no longer an advisor to Trump and says the two just sporadically kept in touch, although in 2016 he would max out contributions to Trump’s presidential campaign and praise him in American and Russian media.

But his suspicion was not triggered until Bouvier came to Rybolovlev in 2013 and 2014 to shop two paintings, first Salvator Mundi, a recently discovered Leonardo for which he wanted $127 million, and then No. 6 (Violet, Green and Red), a prized Rothko for which he requested $140 million. Rybolovlev told Bouvier that the family trusts would pay for the Rothko only in installments while Bouvier sold other works, including a Modigliani sculpture Rybolovlev had owned since 2012. Bouvier seemed to have trouble finding a buyer for the Modigliani—or "anything!" Rybolovlev says.


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.)

Around the same time, a lawsuit against Sater and Bayrock is gaining steam, accusing the two key Trump partners in evading taxes on $250 million through various real estate projects the trio would work on. Officially, Sater is no longer an advisor to Trump and says the two just sporadically kept in touch, although in 2016 he would max out contributions to Trump’s presidential campaign and praise him in American and Russian media.


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.

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”.
These funds, as they’re called in Russia, are operated by LLCs that transfer assets, take out loans, and can make a single large organization doing all sorts of questionable deals and making eyebrow-raising purchases when viewed as a single entity, into a web of seemingly unrelated organizations with very different agendas. With enough records to have to sift through, they can hide their affiliations for years, often in plain sight, just because the web is too tangled to really unravel without a very good reason to spend months parsing paperwork.
Bonhams and Christie’s were also forced to pull smaller objects from their March sales this year, after they were alleged to have passed through the hands of two notorious antiquities smugglers, Giacomo Medici and Gianfranco Becchina. Both had been convicted of trafficking in looted objects, for which Medici was sentenced to 10 years in prison and paid a 10m euro fine – the largest ever imposed for such a crime by Italian prosecutors. Polaroid photos of an immense cache of objects in his Swiss warehouse apparently identified a second or first century BC jug offered for £4,000-£6,000 ($6,700-$10,000) at Christie’s, and a third century pottery pyxis (cosmetic pot) offered for £3,000-£5,000 ($5,000-$8,400) at Bonhams. Earlier this year, the US government seized a $4m (£2.4m) ancient Roman statue in a New York warehouse – it too had passed through Becchina’s hands.

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 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.
I'm trying to think of the creative way to do this. I mean, as you may know, you know, most of these transactions are cleared through New York. And the other sort of central place for information is SWIFT in Brussels. But I would go for the clearing banks in New York that cleared the transactions, you know. And there's—again, it's these sort of intermediary entities that have no real interest in protecting the information, and all you have to do is ask for it and they just sort of produced by rote. So we've done a lot of money laundering investigations where we go to the trust companies and the clearing entities. And so, you know, all dollar transactions are generally cleared through New York. So, you know, the main thing you have to do is identify the banks that were used.
Consistent with general AML principles, the AML Standards stress that beneficial ownership may be obscured behind multiple layers of intermediaries, such as shell companies or offshore companies involving trusts. The AML Standards further provide a list of possible red flags for identifying increased risks of money laundering presented by a client that:
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