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.
Of all the questions surrounding Trump and Russia, the question of whether the Kremlin could have laundered money through the Trump Organization in order to blackmail Trump has not often held the spotlight, obscured behind more direct connections, like discussions between Russian officials and Trump campaign officials like Donald Trump Jr. or George Papadapoulos, or more lurid ones from the Trump dossier.
This panel will be part of a day-long forum at the University, co-hosted by Professor Alexander Cooley, Associate Professor Tonya Lee Putnam and Adjunct Professor Matthew Murray. The Forum aims to stimulate in-depth discussion among academics and professionals and generate systemic and innovative solutions to counter the rise of kleptocracy. Other panelists will explore law enforcement and expanding the Foreign Corrupt Practices Act, as well as the challenges of investigating and researching oligarchs. The event will feature leading U.S. experts and scholars from law enforcement, academia, journalism, and finance.

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.
Pieces started filtering onto the London art market in the 1980s and a British aristocrat, the Marquess of Northampton, formed a consortium to buy 14 of them, along with the late Peter Wilson, at the time chairman of Sotheby’s. Forged documents from Lebanon were produced to give a provenance to the treasure, and it was put up for sale in New York in 1990 at a price of $50m. However immediately three countries – Hungary, Croatia and Lebanon – claimed the cache as being from their territories. The works were hurriedly withdrawn from sale.
But what we’re seeing is a pattern of Trump in the midst of wealthy foreigners engaged in money laundering schemes that center around real estate, and not bothering to vet any of them before doing business. Furthermore, there’s also the fact that he proudly claims to be the owner of more than 500 companies with very complex finances, which is a massive red flag in this context.
"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?
Money obtained illegally—from fraud, embezzlement, bribery, etc.—needs a hiding place. A huge deposit into a bank account, with no clear indication of where that money came from, is a red flag for the IRS. So instead of depositing dirty money, or holding onto it as cash, disreputable people will often turn the money into something else (cars, mansions) or filter it through a business so it comes out the other side looking like the profits of a legitimate enterprise.
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Bouvier, of course, denies all accusations, claiming to have found out about the complaint as he was arrested. An art market insider explained to Forbes that it’s common for intermediaries to take their cut directly from the selling price, which in most cases isn’t illegal, unless certain conditions are violated. Forbes reached out to three different lawyers connected with Bouvier (David Bitton, Luc Brossollet, and Charles Lecuyer) but wasn’t able to get a response.

The Responsible Art Market, or RAM, is an industry-supported not-for-profit organization which describes itself as ‘”[r]aising awareness of risks faced by the art industry and providing practical guidance on establishing and implementing responsible practices to address those risks.”  On its website, RAM provides both an Art Transaction Due Diligence Toolkit, as well as Guidelines on Combatting Money Laundering and Terrorist Financing (“AML Guidelines”).  The AML Guidelines are similar to the protocols set forth by the Basel Institute, but provide slightly more concrete detail.  They set forth eight basic principles:
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).
I always faced my problems. You have to show some balls. Funnily enough, a lot of these hitmen, if they are cut from the right cloth, will come to you with a certain respect if you don't hide. When the Yugoslavian mafia were going to kidnap my father and brother for trying to set a sting operation against them, I had to come back to Amsterdam to face it. I said, "OK, come along. If you're going to kill me, kill me. If you want my money, go fuck yourself." That's the language they speak. I was standing with my bodyguards on the terrace in Amsterdam and this car flew past and they started shooting at me. A bullet went straight through my leg.
Until then Rybolovlev, who is known for a certain froideur, had always avoided discussing his art collection, which includes masterpieces by Picasso, Leonardo, Rothko, Gauguin, Matisse, and Rodin. But he had begun to wonder, he says, whether he had been overpaying the man in charge of his acquisitions, and he was beginning to feel a gnawing anxiety familiar to major collectors—namely, that he was not in the driver's seat of a collection purchased in his name. Art world middlemen—whether private dealers, art advisers, or people seeking a commission for setting up a deal—hold disproportionate power in this incestuous industry, which is largely unregulated and in which enormous deals frequently take place with little paperwork and behind closed doors. Often these middlemen know crucial elements of a deal that their billionaire patrons don't, such as the selling price of a
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.
In the movie-funding case, the scheme involved several participants, 10 countries, mislabeling transactions as “gifts” and “donations,” disguising the origins of the funds, and offshore shell companies. One letter stated that a transfer of $800 million from a Saudi prince to Razak was a “donation.” The head of the criminal operation used correspondent banks to transfer the funds in dollars.

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.


At first Rybolovlev collected slowly, buying a handful of works, including a Monet water lily painting, Gauguin's House of Hymns, three Picassos, and three Modiglianis. After 2009, however, the pace quickened. Rybolovlev was no longer interested in decorating his walls with museum pieces, he says, perhaps because the walls themselves were a subject of dispute.
Los Angeles-based editor of Politech, ex-Soviet computer lobotomist. Specializes in, but not limited to, science, AI, the web, conspiracy theories, and statistics. His work has been featured in or mentioned by How Stuff Works, BusinessWeek, Discovery News/Seeker, The Shift With Drex, Le Monde, SEED, Bad Astronomy, Science To The People, i09, and RawStory, among others.
Los Angeles-based editor of Politech, ex-Soviet computer lobotomist. Specializes in, but not limited to, science, AI, the web, conspiracy theories, and statistics. His work has been featured in or mentioned by How Stuff Works, BusinessWeek, Discovery News/Seeker, The Shift With Drex, Le Monde, SEED, Bad Astronomy, Science To The People, i09, and RawStory, among others.
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.

In one current money-laundering case, United States authorities have accused Malaysian officials and associates in a civil complaint of converting billions of dollars of embezzled public funds into investments like real estate and art. Masterworks by Basquiat, Rothko, Van Gogh and others were purchased, many at Christie’s, according to a complaint filed by federal prosecutors. Later, a Cayman Island company owned by one of the accused launderers took out a $107 million loan from Sotheby’s in 2014 using some of those artworks as collateral, authorities say.
“Russia had no institutional instruments for regulating this new commercial environment. The courts didn’t function. They didn’t know what dispute resolution in business actually was. And so everyone engaging in the new commerce had to employ their own security force in order to ensure the integrity of their business contracts. These guys were called privatised law enforcement agencies by sociologists but they are quite simply the Mafia,” he says.

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.


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.
Speaking on the sidelines of the Art Business Conference, Pierre Valentin, head of the art law practice at London law firm Constantine Cannon, said laundering illicit funds through the art market was seductive because purchases at auctions "can be anonymous and it's a moveable asset. You can put the art on a private plane and take it anywhere. Plus there is no registration system for art."

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.
This would all just be face-palm silliness on the Times’s part, a reflection of its editorial disconnect between the culture pages and the business staff, if the story didn’t also glide over the real point of what is going on here. The best protected transactions in the art market are those that pass through the auction houses because those firms do the KYC due diligence that squelch money laundering. Auction houses have compliance staff and are easily monitored by the law enforcement which doesn’t crack down on large private transactions that take place through lawyers or dealers.  The Times admits this when they point out that Jho Low passed KYC diligence before it was revealed that he was involved in the 1MDB transactions. After it was revealed, he is no longer able to access art markets through the auction houses.

Once purchased, the art can disappear from view for years, even decades. A lot of the art bought at auctions goes to freeports – ultra-secure warehouses for the collections of millionaires and billionaires, ranging from Picassos and gold to vintage Ferraris and fine wine. The freeports, which exist in Switzerland, Luxembourg and Singapore, offer a variety of tax advantages because the goods stored in them are technically in transit. The Economist magazine reported that the freeport near the Geneva airport alone is thought to hold $100-billion (U.S.) of art.
DMITRY RYBOLOVLEV SELDOM gives interviews. The 49-year-old Russian—one of the richest people in the world, with a net worth estimated at $8.8 billion—is notoriously private, and also notoriously security-conscious, perhaps because back in the 1990s, while building up Uralkali, one of the world's largest fertilizer companies, he survived a year in a Russian prison and several murder attempts.
And Sater was far from the only person with shady connections doing business with Trump. In 2008, oligarch and fertilizer magnate Dmitry Rybolovlev bought a Trump property for double what it was worth, which can be a classic money laundering technique meant to bake payments or bribes into what looks like a real estate deal. It seems hard to believe that Rybolovlev would think that a $41 million property more than doubled in value in less than a year.
"[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.
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.
“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.”
Borisovich says London’s Russian oligarchs should not be mistaken for conventional, self-made businessmen. “Their riches come from transactions with the Russian government. They either sold something for a fortune to the state of Russia or they bought something for pennies in some sort of privatisation from the state of Russia. Some of them managed to do both, to buy for pennies and sell for fortunes. Some of them never did any of that and they just worked all their life as government officials and somehow in the process became immensely rich,” he says.
Scott has lectured and presented extensively regarding cybersecurity and corporate espionage at numerous conferences around the globe. He has recently overseen the development of several cell phone detection tools used to enforce a “no cell phone policy” in correctional, law enforcement, and secured government facilities. He is regularly interviewed for leading national publications, and major network television stations including Fox, Bloomberg, Good Morning America, CNN, CCTV, CNBC, & MSNBC. He is the author of "Hacked Again" and writes, "In a modern digital world no one is safe from being hacked, not even a renown cybersecurity expert."
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.
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….
"I think I can be useful," Rappo says Bouvier told her. Rybolovlev "jumped," she says. "He was really very happy." According to her, the oligarch recognized that Bouvier had some of the best art in the world sitting in his Geneva warehouse. Rybolovlev, for his part, says he scarcely remembers his first meeting with Bouvier, and he took the meeting only because Rappo encouraged him to. He found Bouvier "a regular, likable man," different from the stereotypical smooth-talking art dealer. And because Rappo, whom he trusted "totally," had brought them together, Rybolovlev agreed to work with him for, the oligarch claims, a fee of 2 percent—which Bouvier denies, saying that amount was merely for transport and administrative costs.
The Responsible Art Market, or RAM, is an industry-supported not-for-profit organization which describes itself as ‘”[r]aising awareness of risks faced by the art industry and providing practical guidance on establishing and implementing responsible practices to address those risks.”  On its website, RAM provides both an Art Transaction Due Diligence Toolkit, as well as Guidelines on Combatting Money Laundering and Terrorist Financing (“AML Guidelines”).  The AML Guidelines are similar to the protocols set forth by the Basel Institute, but provide slightly more concrete detail.  They set forth eight basic principles:
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