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.

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.”
Around 2003 the Rybolovlevs decided to build an art collection—"the best in the world," Dmitry has been quoted as saying. They had recently moved into a house with light fixtures for art displays, and with the help of Rappo they were making inroads among a Western European elite that spent its considerable wealth on art. Rybolovlev soon settled on his first acquisition: Le Grand Cirque, one of Marc Chagall's many beloved circus paintings. (The previous owner of the house, who had left the fixtures, owned a Chagall.) He consulted several dealers, and the best price was $8 million, according to Rappo. However, she came up with a way to eliminate the dealers and buy directly from Le Grand Cirque's owner, lowering the price by more than $2 million—and, pivotally, bringing Rybolovlev into contact with Yves Bouvier.
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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.
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.
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.
In 2008, Elena Rybolovleva, Dmitry's wife of 24 years, whom he met on the first day at medical college back in Russia, filed for divorce, citing adultery on an industrial scale, including parties aboard yachts at which Dmitry shared "young conquests with his friends and other oligarchs." ("He was not a model husband," a spokesman for Dmitry later told the New York Times. "Mr. Rybolovlev never denied the infidelities, but the wife knew about it for many years and passively accepted it.") In the wake of what would become an exceptionally acrimonious divorce battle (which included Elena's being arrested in Cyprus for allegedly stealing a $28 million diamond ring she later proved her ex- husband had given her while they were still married), Dmitry began seeing art as an investment for his daughters' futures, he says. He subsequently started moving the collection into vaults (trophy works by Matisse, Klimt, Rodin, and Magritte by now had joined the stockpile). The art was owned by trusts, which, Elena complained, were designed to thwart her access to the couple's fortune in divorce court. The divorce (which, Dmitry confided exclusively to T&C, was finally settled in October for an undisclosed amount) was at one time famous for being the most expensive in the world, after a Geneva judge awarded Elena half of her ex-husband's fortune, some $4 billion.
Rybolovlev says he did not know what was going to happen to Rappo or Bouvier. "I didn't know the police would arrest them then," he says in answer to their accusations of a sting at Rybolovlev's apartment. The police had asked him to act normal, he claims, but "I needed vodka to get through it." Rappo, he says, was her usual, effervescent self, chattering about the beauty of the Rothko and pressuring Rybolovlev to buy it.
Both Bouvier and Rappo would deny the charges, hire lawyers, and spend the following months telling their stories to the media. Bouvier's defense was simple: Yes, he had charged astronomical markups to his client, but, as he told Vanity Fair, "I did not act as intermediary but as the owner [of the art]. I had a right to a profit; it's the law of busi- ness." (Bouvier refused to answer questions for this article.)
“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.”
In 2008, Elena Rybolovleva, Dmitry's wife of 24 years, whom he met on the first day at medical college back in Russia, filed for divorce, citing adultery on an industrial scale, including parties aboard yachts at which Dmitry shared "young conquests with his friends and other oligarchs." ("He was not a model husband," a spokesman for Dmitry later told the New York Times. "Mr. Rybolovlev never denied the infidelities, but the wife knew about it for many years and passively accepted it.") In the wake of what would become an exceptionally acrimonious divorce battle (which included Elena's being arrested in Cyprus for allegedly stealing a $28 million diamond ring she later proved her ex- husband had given her while they were still married), Dmitry began seeing art as an investment for his daughters' futures, he says. He subsequently started moving the collection into vaults (trophy works by Matisse, Klimt, Rodin, and Magritte by now had joined the stockpile). The art was owned by trusts, which, Elena complained, were designed to thwart her access to the couple's fortune in divorce court. The divorce (which, Dmitry confided exclusively to T&C, was finally settled in October for an undisclosed amount) was at one time famous for being the most expensive in the world, after a Geneva judge awarded Elena half of her ex-husband's fortune, some $4 billion.
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).
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