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.
The Salisbury attack has reopened questions about more than a dozen suspicious deaths of Russians in London in recent years, many of them linked to organised crime. Even before the attack on the Skripals, the relationship between Russian money in London and international crime came under renewed attention with the success of the BBC television series McMafia.
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.”
On April 17, 2019, the United States Attorney’s Office for the Southern District of Florida (the “Government”) announced its non-prosecution agreement (available here) entered into with a Miami-based gold refinery, Republic Metals Corp. (“RMC”), related to the refinery’s failure to maintain a robust anti-money laundering (“AML”) program. RMC is the second American refinery whose AML program has been identified as deficient by the Government as part of its ongoing probe into gold imports from South American countries such as Peru, Bolivia, and Ecuador (dubbed “Operation Arch Stanton”). The Government’s decision to decline prosecution against RMC stands in stark contrast to its prosecution last year of another refinery, Texas-based Elemetal LLC (“Elemetal”), arising from the same probe.…
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.
He soon joined Ekaterina and Elena in Geneva. However, in their new home, despite their vast wealth, the Rybolovlevs were isolated. Although Elena eventually learned to speak fluent French, her husband "was always distracted by business. I couldn't clear my mind," he says. One of the first friends they made was Tania Rappo, the wife of their dentist, who happened to mention that his wife spoke Russian. (Rappo comes from Bulgaria, where the language is spoken by about a third of the population.)
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.
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
3. Ferromagnetic detectors are becoming a favorite in the contraband smuggling and detection field. The cell phone does not need to be turned on for the detection to happen. The detector picks up the electromagnetic field generated by any mobile phone – even OFF and with the battery removed. The downside is the range is short and sometimes less than a foot.
Happy with my work, the next time he took me to Armenia. He was smuggling of course, and when we got there we had drinks with the chief of police. There was a big organization bringing in lots of pieces from Moscow and Leningrad. The Russians and the Armenians were like mafia clans. They were very well-organized and working together. From there we took a bunch of art and flew to Beirut-the customs there were in on the game. We paid them off. That was basically the first time I smuggled on a large scale.
Look, I've been shot at on three separate occasions, I've had guns on my head, I've had police chasing me... To survive I have been a chameleon. As you know, I speak many languages. Also, I'm not attached to anything. It's like living near a fault line-if you hear a noise, pack your things and get the fuck out of there. Don't become too accustomed to anything. I can sleep like a baby on a little field bed.
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.