Showing posts with label money laundering. Show all posts
Showing posts with label money laundering. Show all posts

January 11, 2017

Seminar: Risk Management in the Art and Antiquities Markets Part II: Criminal and Compliance Risk - 7 February 2017

Seminar Venue: K&L Gates LLP, One New Change (Watling Street entrance), EC4M 9AF, London
Date and Time: Tuesday, 7 February 2017, 9.30 am- 4.00 pm.
Tickets on sale between £63.89 – £82.88
Buying and selling art is a business of passion. But that passion has never seemed so fraught with risk. Money laundering, criminal sanctions, regulatory compliance, charges to tax, corporate governance issues, the threat of cyber attack, online fraud, disputed attribution, question marks over title, and forgery on an industrial scale - all are variously and increasingly interwoven with the day-to-day challenges posed by borderless commerce, big data and globalised criminality. Make one false move, and the price can be high. Businesses, reputations and livelihoods are on the line.
As announced at the Art Business Conference on 1 September 2016, this short series of half-day seminars brings together experienced specialists in their respective fields to address commercial, compliance and cyber risks. The aim of each seminar is to bring together senior art market professionals, and to promote discussion around identifying the risks, and responsible strategies for mitigating and resolving them.
Each seminar takes place at the offices of K&L Gates, overlooking St Paul’s Cathedral. The seminar will commence with breakfast networking and registration at 9.15 and will include a sandwich lunch.
The second seminar is on “Criminal and Compliance Risk.” It takes place on 7th February 2017. Speakers confirmed so far, and topics under discussion will include:
·       Professional codes of ethics, combatting the illicit trade in art and antiquities, and new regulatory challenges on the horizon (Professor Janet Ulph, Leicester Law School, University of Leicester; Dr Sophie Vigneron, Kent Law School, University of Kent; and Ivan Macquisten, art market advisor, campaigner and lobbyist)
·       Risks associated with anti-money laundering and Proceeds of Crime Act offences, and their mitigation (Sasi-Kanth Mallela, Special Counsel, K&L Gates; and Richard Abbey, Partner, Ernst & Young Fraud Investigation and Dispute Services)
·   Keeping track of lost and stolen artworks and antiquities: some challenges and opportunities (Ariane Moser, Chief Operating Officer, Artive Inc. and James Ratcliffe, Director of Recoveries & General Counsel, Art Loss Register, in conversation with Sean Kelsey, Senior Associate, K&L Gates)

To purchase tickets to attend the event please visit the Art Market Minds event page.

April 16, 2016

Hidden Ownership - the Panama Papers

By;  A.M.C. Knutsson

In recent days numerous articles have been released outlining the role of art in the Panama Papers. (For an outline of the nature of the Panama Papers click here.) Based on these leaked files, journalists have mapped how art has figured within a system of tax avoidance and ownership concealment. Both for the money and for the art, the purpose of these ventures can be described as a superficial repudiation of ownership, in order to fortify the same and to protect the assets from various types of intrusions.  The usage of shell-companies can thus safeguard the real owners from challenges to their ownership as they officially are not the named owners.

One example of this is the case of Dmitry E. Rybolovlev, the Russian billionaire collector, who according to the International Consortium of Investigative Journalists (ICIJ) used the infamous law firm Mossack Fonseca to protect his ownership of his $2 billion art collection during his divorce proceedings.[1]  The divorce proceedings started in December 2008 and according to Swiss law, which the couple resided under, the two spouses were entitled to equal parts of their wealth. However, Mossack Fonesca had been instrumental in transferring ownership of the collection, which included, among others, paintings by Picasso, Van Gogh, Modigliani and Rothko, to the company Xitrans Finance Ltd in the British Virgin Islands. This meant that they could no longer be found nor considered part of their shared wealth in the divorce proceedings. [2] On April 6 Rybolovlev's family lawyer made a statement claiming that the "description and references to the divorce proceedings of Mr Dmitriy Rybolovlev are misleading", as it "fails to state that the ex-spouses Rybolovlev amicably settled their matrimonial dispute and announced in a joint statement dated 20th October 2015".[3]  He further points to the fact that Xitrans Finance had been established in 2002, several years before the divorce proceedings and that its use "as a holding entity to constitute a remarkable art collection has been publicly disclosed in numerous publications worldwide and is perfectly legitimate.”[4]

Nevertheless, according to the Panama Papers Mossack Fonseca has for decades been helping spouses to shield assets from their better halves. Martin Kenney, an asset recovery specialist based in the British Virgin Islands has been helping wives from numerous countries including the UK, USA and Russia to recover hidden possessions. According to him, “These offshore companies and foundations . . . are instruments in a game of hide and concealment.”[5]

Another type of ownership obscurity can be seen in the case of the Seated Man with a Cane, a Modigliani painting bought in 1996 by the International Art Centre (IAC) and valued at $18-25 million.[6] According to a restitution claim filed by Philippe Maestacci on October 28, 2011, this painting had been looted by the Nazis from his grandfather, the art dealer Oscar Stettiner. Stettiner's inventory had been sold by Marcel Philippon a Nazi-appointed administrator after Stettiner fled from Paris in 1939. The Modigliani had been sold in 1944 and as early as 1946 Stettiner tried to retrieve the work but died two years later without resolving the claim. [7] In 2011 Maestracci picked up the struggle and sued the art dealing Nahmad family, often associated with the IAC, seeking the return of the painting. However, the suit was withdrawn when the Nahmads claimed that the IAC owned the painting and rather than themselves.[8] Indeed the ICIJ has reported that “The Nahmads have insisted in federal and state court in New York that the family does not possess the Modigliani.”[9] The Panama papers have now revealed that the International Art Centre has been owned by the Nahmad family for 20 years and since 2014 the patriarch David Nahmad has been the sole owner.[10] Confronted by the ICIJ David Nahmad's lawyer, Richard Golub, insisted that "Whoever owns the IAC is irrelevant", and the main issue is that Maestracci has no evidence that his grandfather, Stettiner, was the painting's original owner.[11] This standpoint seems not to be commonly shared and on April 8 the Geneva Prosecutor's Office searched the facilities in the Geneva Ports looking for the lost painting.[12] It was later revealed that the painting had been confiscated by the prosecutors during the raid.[13] While the restitution claim remains to be settled the reappearance of the painting and the confirmation of David Nahmad's ownership finally makes it possible for Philippon to proceed with his restitution claim.

According to Anders Rydell who has studied Nazi looted art, this case is not unique but he has found several other cases of Nazi confiscations figuring in the leaked files, which have also been hidden away through shell-companies and thus been beyond the reach of restitution claims. With the release of the Panama Papers he observes that "Maybe the right full owners may get their art back."[14]

In addition to these ownership battles, ample works of art are believed to be hidden away from sight as well as tax through shell-companies in the Free Ports. [15] The story of hidden art has just started to unfold and has still a long way to go. What the new discoveries in the Panama papers reveal is not all that surprising, but rather a sad prediction revealed to be true. The art market has long been known to involve shady deals and international crime syndicates. The revelation that art is hidden away should not be news to any of us, but perhaps the emergence of the Panama Papers actually offers a rare opportunity to resolve some of the long standing mysteries which has troubled the art market. Perhaps this will allow restitution claimants fresh material which can enable them to proceed with their cases. Perhaps long lost paintings will be rediscovered from the bowls of the world's Free Ports. Perhaps not. We will wait and we will see.  

___________________________

[1]  http://www.nytimes.com/2016/04/12/arts/design/what-the-panama-papers-reveal-about-the-art-market.html?_r=0, access 15 April 2016
[2] http://theartnewspaper.com/news/news/panama-papers-russian-billionaire-dmitry-rybolovlev-used-offshore-company-to-hide-art-from-wife-leak/, access 15 April 2016
[3]   Ibid
[4]   Ibid
[5] https://panamapapers.icij.org/20160403-divorce-offshore-intrigue.html
[6] http://www.nytimes.com/2016/04/12/arts/design/what-the-panama-papers-reveal-about-the-art-market.html?_r=0, access 15 April 2016
[7] http://www.artnet.com/magazineus/news/artnetnews/nahmad-gallery-sued-for-allegedly-looted-modigliani.asp, access 15 April 2016
[8]  http://theartnewspaper.com/news/museums/panama-papers-expose-art-world-s-offshore-secrets-/, access 15 April 2016
[9]  Ibid
[10] http://www.nytimes.com/2016/04/12/arts/design/what-the-panama-papers-reveal-about-the-art-market.html?_r=0, Access 15 April 2016
[11]  Ibid
[12] http://www.artmarketmonitor.com/2016/04/09/swiss-prosecutors-raid-freeport-looking-for-modigliani/, Access 15 April 2016
[13]  http://www.bloomberg.com/news/articles/2016-04-11/modigliani-painting-sparks-criminal-probe-and-geneva-art-search, Access 15 April 2016
[14]  http://www.jp.se/article/anders-rydell-om-gomd-nazikonst/, Access 15 April 2016
[15] http://www.dn.se/kultur-noje/konst-form/konstvarlden-kopplas-till-panama/, Access 15 April 2016

November 21, 2013

Knoedler & Company and Julian Weissman: Milton Esterow, Editor and Publisher of ARTnews, on "Fakers, Fakes & Fake Fakers" and the Glafira Rosales Art Fraud Case

In publisher Milton Esterow's article "Fakers, Fakes and Fake Fakers" in ARTNews, he focuses on art forgery and 'well-known forgers reveal the creative methods they use to copy the masters: David Stein (died 1999) who turned out Marc Chagalls; Eric Hebborn (murdered in Rome in 1996) who forged and misattributed to give the art experts something to discover; Leo Stevenson a 'London copyist' who has made copies for the British Foreign & Commonwealth Office; and Elmyr de Hory (suicide in 1976) the subject of Clifford Irving's biography Fake!.
Art forgery has been a hot topic lately since the disclosure that Pei-Shen Qian, a 73-year-old immigrant from China, working out of his home in Queens, reportedly created at least 63 drawings and paintings by Jackson Pollock, Robert Motherwell, Barnett Newman, Franz Kline, and Richard Diebenkorn.
The works were sold or consigned by Glafira Rosales, a dealer of Sands Point, New York, to two Manhattan dealers, Knoedler & Company, which closed in 2011, and Julian Weissman. Over a period of 15 years, the works were sold to collectors for about $80 million. Knoedler, its former president Ann Freedman, and Weissman have consistently stated that they were convinced that the works were authentic. Freedman says she showed the paintings to a number of experts, who confirmed the authenticity and quality of the works. 
The case against Rosales is known as United States of America v. Glafira Rosales, a/k/a “Glafira Gonzalez,” a/k/a “Glafira Rosales Rojas,” defendant. She pleaded guilty in September to charges of wire fraud, money laundering, and tax evasion. As we went to press, no one else had been charged in the case, but Assistant United States Attorney Jason P. Hernandez indicated that additional arrests were contemplated.
In May, 2013, "Manhattan US Attorney Charges Art Dealer with Hiding Millions of Dollars in Income from Fraudulent Sales of Artwork";

In July, 2013, "Long Island Art Dealer Indicted in Massive Art Fraud, Money Laundering, and Tax Scheme"; and

In September 2013, "Art Dealer Pleads Guilty in Manhattan Federal Court to $80 million Fake Art Scam, Money Laundering, and Tax Charges".

June 9, 2012

Accusations of money laundering, vandalism and the theft of a Picasso lithograph in Northern California at a mansion allegedly belonging to the former Ukrainian Prime Minister

Novato mansion/Associated Press
The theft of a Picasso lithograph, accusations of money laundering, and vandalism converge in an abandoned mansion in Northern California.

More than 100 people partied in a 19,500 square foot residence in South Novato without the permission of the alleged owner, former Ukrainian Prime Minister  Pavlo Lazarenko, reports Will Jason for the Marin Independent Journal.

The caretaker reported that amongst the vandalism, a $30,000 Picasso lithograph disappeared.

Lazarenko is imprisoned in Southern California.  The United Nations estimates that Lazarenko stole $200 million from the government of Ukraine.

UPDATE: The Picasso lithograph was found on a walking path below the mansion and handed over to the police.  You can see the video and read the story here.

April 16, 2012

Irish Artist Michelle Rogers Secures Release of 14 Paintings Seized by Police at Gallery Suspected of Tax Fraud and Money Laundering

Michelle Rogers' Lampuedusa (200 x 300 cm)
by Catherine Sezgin, ARCA Blog Editor

Fourteen paintings by Irish artist Michelle Rogers seized by police in a raid of a gallery in Rome two years ago were finally released to the artist in March.

Rogers' paintings were held in police custody when a gallery's inventory was taken as part of a police investigation into tax fraud and money laundering.

"The court believed that the paintings belonged to the gallery owner and my fight over the last two years was to get them to realize that the paintings belonged to me," Rogers explained.  "Eventually, after a lot of work by my lawyer and requests from my embassy in Rome, the courts accepted that the art work was mine."

The more than one dozen paintings ranged from 100 x 80 cm to 200 x 300cm.

Michelle Rogers, who also lives part-time in Rome, traveled to Bosnia in 1993 and exhibited works reflecting on the theme of the 9/11 attacks in North America.  Lampeudusa, according to her website, "explores the plight and flight of immigrants of Italy."

Wanted in Rome reported (Return of Michelle Rogers paintings in Rome) that the 14 paintings by Rogers had been exhibited at the Aequalias Contemporary Art Gallery on via Margutta when they were seized in an investigation of the owner, Massimo Micucci, suspected of tax fraud and money laundering for Silvio Scaglia, the billionaire owner of Italian telecommunications company Fastweb.