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.
But the partisan tensions bubbled over again Friday, with a skirmish over a report apparently produced by a splinter faction of Republican members of the House Intelligence Committee led by Nunes. The GOP majority voted Thursday night to share the report with colleagues, but not to release it to the general public. By Friday morning, however, Republican members of Congress were demanding the memo be made public—with their calls being amplified by Russian-linked Twitter accounts.
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).
However, probably the most dramatic case of looted antiquities concerns the notorious £100m ($167m) Sevso treasure, a magnificent cache of late Roman silver dating from the fourth or fifth Century AD and comprising inlaid platters, ewers and bowls, which was unearthed in the 1970s, almost certainly in Hungary. The finder, a Hungarian soldier, was later found hanged in a cellar, and two of his friends died in unexplained circumstances. The silver – contained in a giant copper cauldron which he had buried in the cellar – had disappeared.
“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.”
The Chinese art market, where regulation is lax, is thought to be particularly prone to money laundering. "The [Chinese] art market has become more and more abnormal," Wang Shouzhi, dean of the Cheung Kong School of Art and Design at Shantou University, told the South China Morning Post in April. "It is saturated with business tricks, fake works and fake prices. … It has become a tool for corruption and money laundering."
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.
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Rapid and dramatic rises—and collapses—in price are bad things for money laundering whose sole purpose is to find a relatively stable vehicle to mask the source of funds. Money launderers are not looking to make a profit on their purchases let alone a killing. In fact, a money launderer is willing to take a loss on the vehicle that hides the illicit source of the funds because that is the price of washing the money. If a money launderer buys something with dirty money that has the potential to be unsalable for clean money, it doesn’t work. Art, even some of the world’s best art, is often temporarily unsalable for a variety of real and legitimate reasons.
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.
“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.
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.
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.
Rybolovlev, meanwhile, was only getting richer. In 2007 Uralkali floated on the London Stock Exchange and became the most successful Russian IPO ever. Less than a year later the Putin regime—which is notoriously antagonistic toward Russian oligarchs living abroad, particularly ones whose fortunes derive from buying post-Soviet assets on the cheap—summoned him to a meeting in Moscow,
Rybolovlev ultimately invited me to La Belle Epoque because he has a story to tell, or rather explain. For the last year he has been at the center of the most astonishing scandal in the art world in years, an alleged billion-dollar fraud that has dealers, artists, and collectors sweating. At stake may be not just the money of an angry and very powerful man intent on recouping his losses but the thing the art world values more than anything: the freedom to operate in darkness.
Having turned the craft of international art smuggling into an art in its own right, Michel Van Rijn was once wanted by authorities all over the world for sneaking valuable pieces of art across sea and land. With millions in the bank, Michel lived the life of a playboy. He owned private planes, enjoyed a harem of beautiful women, and did business with some of the world's most dangerous criminals-many of whom were members of various governments (and probably still are).
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.”