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.
Tucked behind Kensington Palace and protected by armed police at checkpoints on either end is the street known as Billionaire’s Row, the most expensive in London and perhaps the world. A private road owned by the Crown Estates, traffic is light and slow here, and a prohibition on photography is enforced by the private security guards who watch over every other house.
In regards to the critical issue of the source of the funds, the AML Guidelines “encourage” art businesses “to decline payments from a third party who is not their client and buyer of record. If there are legitimate reasons why it is justified for the Art Business to accept payment from a third party, before doing so the Art Business should conduct enhanced due diligence on both their buyer of record and the third party payer[.]”  The AML Guidelines also articulate a “preference” for art businesses only “to accept payments from reputable banks in jurisdictions subject to AML regulation and supervision.  Such reputable banks and financial institutions are generally subject to a high degree of AML regulation. That said[,] Art Businesses should remain vigilent and not rely entirely on the fact that banks and financial institutions will have carried out the necessary checks and verification to be satisfied that the source of funds is clean.”
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.

Rybolovlev has turned up the legal pressure on Bouvier. Beyond getting him arrested in Monaco, the oligarch’s legal team, headed by Tetiana Bersheda, got Singapore’s High Court to impose a $500 million freeze on Bouvier's assets, his MEI Invest Limited, and supposed accomplice Tania Rappo. In Geneva, public prosecutor Jean-Bernanrd Schmid conducted a search in Natural Le Coultre’s headquarters and a gallery looking for documents related to the Modigliani and Da Vinci transactions. Rybolovlev is operating through the two holding companies that own the art collection, Accent Delight International and Xitrans Finance.

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.
When confronted, his company merely says that it’s not involved in any deals beyond licensing a brand name and image. In fact, his blinders about the identity of those backing Trump Towers Baku is a repeat of a 2010 deal in which a state-run Russian bank, which serves as a slush fund for Putin’s projects and is directly overseen by him was indirectly involved in a textbook case of money laundering.

Finally, under Guideline 6, the AML Guidelines provides that art businesses must maintain adequate records of their due diligence efforts. Perhaps stating the obvious, but perhaps also implicitly acknowledging the existence of practices by certain dealers, the AML Guidelines observe that “[a]ll documents issued by an Art Business in connection with a transaction (e.g. valuations, sale and purchase agreements, invoices, shipping documents, import / export declarations etc.) should be true, accurate and contemporaneous and represent the honestly held professional opinions of the Art Business.” Likewise, dealers “should refuse all requests from clients to alter, back date, falsify or otherwise provide incomplete or misleading documentation or information relating to a transaction. If there are legitimate reasons for altering a document (e.g. invoicing error etc.) the circumstances and justification should be fully documented and retained on file for future reference and audit.”
Rybolovlev says he heard through the grapevine that Rappo had gotten richer, acquiring apartments in Paris, London, and Monaco during the years he had known her. Her explanation, he says, was that she had come into a windfall thanks to her family's sale of real estate in Bulgaria. Rybolovlev also said she had given money to Bouvier to invest in the Singapore free port (which Rappo denies), and Bouvier had made her a fortune.
Sotheby’s declined to comment on whether it believed Mr. Bouvier to be the owner. But it says it knew him very well as a customer and that he had represented to them that he had the legal right to sell the property. As to its policy of learning the identity of ultimate owners, Sotheby’s said it takes a risk-based approach — sometimes requiring disclosure depending on the specific facts and circumstances of each situation.
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Former Russian presidential placeholder, and current prime minister, Dmitry Medvedev could teach a master class in how these advanced schemes work. Using non-profits and LLCs run by his friends from law school, he was able to secure three massive compounds in Russia, a pair of yachts, run a secret mega-farm, an exclusive vineyard, turn an 18th century palace in his hometown of St. Petersburg into ultra-luxury condos, acquire a pair of yachts, and buy a castle and wine-making operation in Tuscany.
Perhaps the most interesting thread is Simpson’s suggestion that the Trump Organization could have been used by Russians to launder money—an arrangement that would have both allowed Kremlin-linked figures to scrub cash and would have created possible blackmail material over the now-president, since the Russian government would be aware that a crime had been committed.
In fact Trump named Wilbur Ross, the former vice-chairman of the Bank of Cyprus, as his commerce secretary. That bank was involved in deals involving Putin’s inner circle in 2015, and incidentally, Rybolovlev had a 9.9% stake in the bank until 2013, after which he divested for undisclosed reasons. It’s very possible that Ross actually has no role in any of this as former employees say he actually drove Russian oligarchs from the bank over his tenure, and the offshores were only used for a failed bid to build a casino.
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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 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.

At the restaurant Rappo, who speaks eloquent English as well as French, Russian, and her native Bulgarian, chain-smokes throughout the evening, and although she orders champagne, she scarcely touches it, preferring to talk, talk, and talk. Both her husband, a handsome, quiet man, and her lawyer, "Maître Michel," occasionally interrupt, telling her, "Tania, no, don't say that," but clearly Rappo is not a woman who is told what to do.
Schiff, however, has long been interested in the idea. “The allegation that concerns me most is ... the issue of money laundering, and not money laundering alone by Mr. Manafort but whether the Russians also laundered money through the Trump Organization,” he told me in October. “I mention that because when most people think of kompromat, they think of the salacious video. But if the Russians were laundering money... that would be a very powerful lever the Russians would have over the president of the United States.”
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When addressing the KYC procedures under Guideline 3, the AML Guidelines explain that establishing a client’s risk profile will require an art business to obtain information on the client; understand the purpose and intended nature of the transaction; and understand the client’s source of wealth and how they acquired their art collection.  The AML Guidelines also stress the need to identify beneficial ownership, “even if the contracting client raises confidentiality concerns,” and note that the art business “may also choose to include appropriate warranties and representations in their agreements with their clients to emphasise the importance of this point.”  Further, art businesses should peform due diligence on intermediaries, such as art advisors or brokers, acting for one of the parties to a transaction.
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