According to Bersheda, the criminal complaint she filed last year was against Bouvier only. Rybolovlev was already hurt and angry, but the serious pain came, he says, when he heard that investigators had found commissions from Bouvier in Rappo's bank accounts going back to 2004. Rappo knew Rybolovlev to be reserved and wary, he says. He let his guard down around Bouvier because he trusted her. At that point he began to see Rappo, not Bouvier, at the center of the spider's web. Their falling out has led him to ask what he calls "difficult philosophical questions." Had it not been for the dentist's wife he would never have gotten involved with Bouvier.
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.”
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.
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.
The room is oval and intimate. He sits in an armchair, back to flung-open French doors, the yacht-filled harbor of La Condamine beyond. Curiously, since Rybolovlev is the owner of one of the world's most valuable art collections, not a single work of art is on view. However, books, mainly on business and soccer, line the shelves. When I point out one by Donald Trump, he laughs. "I've never read it," he says. "It was put there by the Candy brothers." I sit on the sofa close to Bersheda, who is going to translate. Rybolovlev's trust in the glamorous, brainy 31-year-old lawyer is obvious. They met six years ago in Geneva, where she worked for a law firm that he had retained. He asked her to work for him and she refused, but subsequently she set up her own firm, of which he is now a major client. She and I met last summer at Art Basel, where she gauged whether he should talk to me.
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.

The following year, in 2013, an even more high-profile laundering case surfaced when a Jean-Michel Basquiat painting worth $8 million was found in a crate at Kennedy Airport on its way from London. 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. In 2004, Ferreira went $1 billion in debt after his financial empire, much of which was built on embezzled funds, collapsed. During his reign over Banco Santos, he had bought 12,000 pieces of art. In 2006, Ferreira was sentenced to 21 years in prison for bank fraud, tax evasion, and money laundering. But before his arrest, $30 million of his art collection was smuggled out of Brazil. The scheme was uncovered when Hannibal was found at JFK. According to court papers, the painting was originally bought for $1 million in 2004 by a Panamanian company called Broadening-Info Enterprises, which was later discovered to be owned by Ferreira’s wife, Márcia.


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.…
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.
He hasn't given many interviews over the past six years, but I managed to track him down for a chat. After learning I did a bit of unlicensed boxing before becoming a journalist, Michel took a liking to me, as he is a fighter himself. He once had so many contracts on his head that Scotland Yard detectives allegedly placed bets on how long he had left to live before he was murdered by a hitman.

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.
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.
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Oh fuck yes! Look, I'm not a conspiracy theorist, but the art market is a billion-dollar industry. If it [smuggling] is not tolerated on certain levels, the banks would never reach their peaks. I had people on my payroll at customs... it was barely even necessary to smuggle because you could bring it in almost officially so long as you pay a little bit to the right people.

Well, I'd been on the run and was eventually arrested at my villa in Marbella.I knew one of the Italian godfathers of the mafia who also has a villa there. We are great friends. So within ten minutes of being arrested, his counsellor was in my cell. He said, "Felice cannot come but he sent you his kind regards," so then I was sent to Madrid where I dined with a very important member of the police. He arranged for me to go to prison there instead of being extradited to France where they were really after me. I had the best time of my life in jail [in Madrid]. I had the guarantee I was coming out in a year and I bought a cell phone from one of the ETA boys in there. It was like that movie Goodfellas. I had my own kitchen, my own shower, and every day I could bribe one of the guards to go to the market-it was fantastic.


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.
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 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.
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.”
It is hard to imagine a business more custom-made for money laundering, with million-dollar sales conducted in secrecy and with virtually no oversight. What this means in practical terms is that “you can have a transaction where the seller is listed as ‘private collection’ and the buyer is listed as ‘private collection,’ ” said Sharon Cohen Levin, chief of the asset forfeiture unit of the United States attorney’s office in Manhattan. “In any other business, no one would be able to get away with this.”
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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.
You always have to be a step ahead of them. Most of them you could pay off, but some you couldn't. I was cocky. I would show off in their faces sometimes. It was stupidity, but I saw the news of my smuggling in the papers and I liked it, it showed them I could still do it even though they were after me. Also I'd travel on fake passports and change my appearance. Instead of blue eyes I'd change them to brown with contacts, I'd dye my hair blonde... all those corny tricks. At that time they worked.
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.
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.
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.
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