Illegal Gambling and Money Laundering Prompt Forfeiture Complaint for Artwork

Prosecutors have filed a complaint in federal district court in Oklahoma City to forfeit artwork and other property allegedly connected with illegal gambling and money laundering.

Court papers filed on June 7, 2013 reveal that the Federal Bureau of Investigation (FBI) probed an enterprise based in Panama City, Panama, which allegedly conducted illegal internet gaming in the United States. Prosecutors claim that nine pieces of unspecified artwork seized by authorities in April are connected with the millions of dollars generated from the operation.

An FBI affidavit describes the alleged racket as having "established a number of business payment services, and financial schemes to help hide the nature of the gambling activity and to launder the money utilized to operate the illegal gambling enterprise."

Thirty-four defendants from the U.S., Canada, and Panama have been indicted in the Western District of Oklahoma on charges of illegal gambling, money laundering, and Racketeer Influenced and Corrupt Organization (RICO).

Besides art, other property singled out for forfeiture include money, real estate, jewelry, champagne, and memorabilia located in Arizona, Alabama, California, and Colorado.

Photo credit: sabercat

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2010-2013 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT INFORMATION: www.culturalheritagelawyer.com

Terrorist Financing Risks and the Illegal Trade in Cultural Property

There is sufficient anecdotal evidence to conclude that the illegal trade in cultural property may constitute a source of funding for terrorist networks.* This judgment is tacitly acknowledged by the Financial Action Task Force (FATF), an independent inter-governmental organization that helps to identify, assess, and understand terrorist financing (TF) and money laundering (ML).

In recommendations published earlier this year, FATF expressly takes into account the illegal cultural property trade. Its 2013 guidance report titled "National Money Laundering and Terrorist Financing Risk Assessment" describes categories that should be included when authorities assess terror funding and money laundering risks. The report lists illicit trafficking of cultural goods, counterfeiting of antiquities, and the illegal trade of antiquities. The report also identifies art and antique dealers and auction houses as businesses "that may be useful [to include] in building a list of the ML/TF vulnerabilities that can be exploited in regulated entities."

FATF recommends that risk assessments focused on terrorist financing and money laundering "should ultimately allow public authorities to make a judgment on the levels of the risks and priorities for mitigating those risks."

One policy response that authorities might consider is the adoption of record keeping laws that spotlight black market antiquities. Such laws would foster transparency, helping to separate the legal cultural property trade from the illegal trade and serving to identify potential ML/TF crimes. A proposal describing these laws can be found in "Spotlighting Black Market Antiquities with Record Keeping Laws."

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* See e.g., Eti Bonn-Muller, Inside the Israel Antiquities Authority: Interview with Amir Ganor, Archeology.org, 2010, http://www.archaeology.org/israel_antiquities_authority/ganor.html;

Blood Antiques (LinkTV broadcast Oct. 8, 2009); S Fidler, A black art: how the trade in stolen artifacts aids money laundering, organized crime, and terrorism. Financial Times. (May 24, 2003).

Research credit: Jayna Sutherland.  Photo credit: darrendean.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2010-2013 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT INFORMATION: www.culturalheritagelawyer.com

Prosecutors Seize and Petition to Forfeit Artworks Linked to Money Laundering

U.S. Attorney Paul Fishman

Federal prosecutors have seized and petitioned to forfeit 14 crates of art allegedly used to launder money. In the case of U.S. v. Various Pieces of Artwork, U.S. Attorney Paul Fishman filed an in rem action in New Jersey federal district court on February 22, 2013 targeting 2,251 items, mostly photographs.

Between 2007 and 2012, the CEO of Green Diesel and Fuel Streamers and associates "fraudulently created and sold credits for renewable fuels that were never produced," declares the U.S. Attorney's forfeiture complaint. The parties "laundered the proceeds of their fraudulent activities by layering the proceeds through multiple bank accounts and by purchasing artwork, some of which was shipped to Newark, New Jersey, as part of an effort to hide the proceeds of the fraud and remove the proceeds from the United States ...."

The purchases totaled $18 million, say prosecutors, adding that "a substantial amount of artwork" was to be moved to Spain via the Netherlands after having been transported to Houston, Texas, and Newark, New Jersey.

Federal attorneys cite financial records showing purchases from seven dealers and galleries, including Sotheby's, Heritage Auction Galleries, and Swann Galleries. No wrongdoing is alleged to have been committed by any sellers.

The pieces targeted for forfeiture include photographs by André Kertész, Edward Weston, Eugène Atget, and Alfred Stieglitz.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2010-2013 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: www.culturalheritagelawyer.com