“The tax laws in art make it basically legal to not pay taxes on art. If you’re a serious art buyer, you just get a good tax accountant,” former New York-based art consultant Beth Fiore tells Hopes&Fears. “If you show newly purchased works in certain museums then you never have to pay taxes on it.” Edward Winkleman of Winkleman Gallery maintains that his gallery keeps fastidious records of all transactions and pays taxes even on cash sales. But he admits that, “the state generally wouldn't question what is reported.” He also tells us that individual sales don’t need to be reported, only the totals for each quarter. Hypothetically, someone could buy millions of dollars worth of art without the IRS knowing, and then later sell those works for a “legitimate” profit that looks clean on taxes.
The oligarch is dismissing the whole thing as procedural, Bersheda tells me, but Frank Michel, the lawyer who filed charges on behalf of Tania Rappo (close friend-turned-enemy of Rybolovlev) of tampering with police evidence and invasion of privacy tells me it's serious. "Rybolovlev will be charged," Michel says, "and then there will be a trial involving one of the most powerful men here. Monaco has never seen the like."
Borisovich says London’s Russian oligarchs should not be mistaken for conventional, self-made businessmen. “Their riches come from transactions with the Russian government. They either sold something for a fortune to the state of Russia or they bought something for pennies in some sort of privatisation from the state of Russia. Some of them managed to do both, to buy for pennies and sell for fortunes. Some of them never did any of that and they just worked all their life as government officials and somehow in the process became immensely rich,” he says.

Of all the questions surrounding Trump and Russia, the question of whether the Kremlin could have laundered money through the Trump Organization in order to blackmail Trump has not often held the spotlight, obscured behind more direct connections, like discussions between Russian officials and Trump campaign officials like Donald Trump Jr. or George Papadapoulos, or more lurid ones from the Trump dossier.
Scott has lectured and presented extensively regarding cybersecurity and corporate espionage at numerous conferences around the globe. He has recently overseen the development of several cell phone detection tools used to enforce a “no cell phone policy” in correctional, law enforcement, and secured government facilities. He is regularly interviewed for leading national publications, and major network television stations including Fox, Bloomberg, Good Morning America, CNN, CCTV, CNBC, & MSNBC. He is the author of "Hacked Again" and writes, "In a modern digital world no one is safe from being hacked, not even a renown cybersecurity expert."
Recently, some countries in Europe, including Luxembourg and Switzerland, have passed laws to clamp down on money laundering in the art market. Starting in 2016, Switzerland will cap cash transactions at 100,000 Swiss francs ($135,000). Payments above that cash limit will have to be made by credit card, creating a paper trail, or the seller will have to carry out due diligence to ensure the legal origins of the funds.
Of course, beyond AML-related process concerns, any art dealer — just like any business person — always must remember that just about any financial transaction that involves proceeds known to have originated from illegal activity represents a criminal money laundering offense.  Stated otherwise, even if the BSA is not expanded to include dealers in art and antiquities, those in the U.S. art industry still need to bear in mind, in extreme examples, the omnipresent federal criminal code.  Sometimes, the provenance of the funds can be more critical than the provenance of the art.
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.
The King free ports, as the Swiss media have dubbed him, Bouvier was embroiled in a similar legal scandal in 2008, when he was connected to a group that tricked an aging collector into selling a piece by Russian-born French artist Chaim Soutine that was then flipped to the National Gallery of Art in Washington, DC. A suite filed by the heirs of Canadian Lorette Jolles Shefner claims she was misled into selling Piece of Beef for $1 million in the Spring of 2004 by two art experts who, a few months later, sold it to the National Gallery for nearly twice the price. Bouvier was "acting in concert [with the experts] to disguise the true ownership" of works of art as part of the fraudulent scheme, court documents revealed.

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.
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.
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The Russian investigation into Laundromat has been cursory. One investigator admitted his probe into RZB had stalled. Two FSB agents visited their counterparts in Moldova and collected documents. There are suspicions the FSB’s real goal was merely to find out how much investigators knew. In March, Moldova complained that in recent months Russian agents had been harassing Moldovan diplomats arriving in Russia.
The anecdote about Steve Cohen’s Modigliani comes straight out of the criminal complaint received on January 12, 2015 by Monaco’s Palais de Justice, and was confirmed by source close to the matter. While Bouvier may not be a household name in the U.S., the accusations and ensuing arrest reverberated across the European art market, where Bouvier runs a set of luxury warehouses across Geneva, Luxembourg, and Singapore where the world’s billionaires store their art, along with jewels, fine wines, and other luxury goods legally in tax-free zones.

The anonymity of buyers is also a huge advantage for criminals. Who hasn’t seen the images of an art auction for a famous painting at Christie’s or Sotheby’s, where brokers are on the phone with mysterious clients? Art market operators generally refuse to disclose the identities of their clients under the guise of “protecting the integrity of the transactions.”
where Rybolovlev was informed that the Kremlin was reopening a potentially bankrupting investigation into the collapse of a mine belonging to Uralkali. Understanding the government's interest in his company and that his days of owning it were numbered, Rybolovlev cashed out, leaving his estimated net worth somewhere between $8 billion and $13 billion. He then focused on trolling the world for other investments. In 2010 he moved to Monaco, his trusts buying La Belle Epoque. His trusts also bought a majority stake in the AS Monaco soccer team in 2011. And in 2012 a broker recommended by Rappo sold his trusts the penthouse at 15 Central Park West. Rybolovlev says that Rappo called him as the deal was closing. "I've been offered a commission of $100,000," she told him. "Would you mind if I accepted?"

If the BSA is extended to apply to dealers in art and antinquities, FinCEN can expect a robust notice and comment period for the implementing regulations.  Further, when proposing such regulations, FinCEN might draw upon some existing AML guidelines for the art trade, including those from two not-for-profit groups — one independent, the other supported by industry.  We explore those guidelines in the rest of this post.
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