At the same time, Trump partnered with a real estate developer called Bayrock, founded by Soviet-born Tevfik Ariv who set up office in Trump Tower. In 1999, Russian-born former gangster implicated in a Wall Street pump-and-dump scheme and money laundering, Felix Sater, joined Bayrock and would become a top Trump adviser. Sater claimed they would talk often, with him pitching ideas on a regular basis. By 2005, the duo is trying yet again to build a hotel in Moscow to no avail.
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.
Initially, the oligarchs used intelligence officers as their personal security guards but Vladimir Putin flipped the system when he came to power in 2000, so that the intelligence services now controlled the oligarchs. The men who had made their fortunes through the privatisation of Russia’s infrastructure and natural resources now faced a choice – to share their cash with Putin’s circle or face the consequences.
The Italian and other governments are becoming far more aggressive in seeking the repatriation of looted antiquities. Italy in particular waged a long legal battle against Getty curator of antiquities, Marion True, for acquiring illicitly exported pieces, although the case finally exhausted the statute of limitations. And in recent years numerous American museums – including the Metropolitan Museum of Art in New York, Boston’s Museum of Fine Art and the Getty in Los Angeles – have been forced to return looted antiquities to their host countries. These include the famed Etruscan Euphronios krater (wine bowl) dating from 515 BC and which was bought by the Met in 1972 for $1.2m. It turned out that this had also been handled by Medici, and the museum gave it back to Italy in 2006. Just this month, the Getty said it was returning a 12th-century Byzantine illuminated New Testament to the Greek Dionysiou monastery – from which it had disappeared more than 50 years ago.
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'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.
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:
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.
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.
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.
↑ Mario Clouds Not Bootleg V1.1 is a variation on Super Mario Clouds by Cory Arcangel. It was made available on the site NetVVorth as part of a collection of "forged" works by iconic digital artists. (Arcangel also offers instructions on his website that allow anyone to create a bootleg version of the piece.) It is still credited to "Cory Arcangel" in an attempt to highlight the ease of forging digital work.
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.
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.)
While the US art market remains relatively unregulated, organizations across the globe are taking steps to hold dealers accountable for reporting illegal activity. In February of 2013, the European Commission passed ordinances that require European galleries to report sales above 7,500 euros paid in cash, as well as file suspicious-transaction reports. And in the beginning of this year, a forum was held at the World Economic Forum in Davos, Switzerland in which economist Nouriel Roubini, among others, spoke on the art market’s susceptibility to laundering and other economic crimes like tax avoidance and evasion. “Anybody can walk into a gallery and spend half a million dollars and nobody is going to ask any questions," said Roubini according to Swiss Info.
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.' ")
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.