If businesses like casinos and gem dealers must report suspicious financial activity to regulators, so should art dealers and auction houses. But to dealers and their clients, secrecy is a crucial element of the art market’s mystique and practice.
Have you ever accidentally told the customs authorities that a painting you own is worth $100 when it’s really worth $8,000,000? It’s an experience we can all relate to, I’m sure. It’s such an easy mistake to make, isn’t it? The quotes here are from a relatively shallow but interesting article by Patricia Cohen in the New York Times, on money laundering through art, which is the evil (or more evil) twin of high level art dealing as investment:
As other traditional money-laundering techniques have come under closer scrutiny, smugglers, drug traffickers, arms dealers and the like have increasingly turned to the famously opaque art market, officials say.
It is hard to imagine a business more custom-made for money laundering, with million-dollar sales conducted in secrecy and with virtually no oversight. What this means in practical terms is that “you can have a transaction where the seller is listed as ‘private collection’ and the buyer is listed as ‘private collection,’ ” said Sharon Cohen Levin, chief of the asset forfeiture unit of the United States attorney’s office in Manhattan. “In any other business, no one would be able to get away with this.”
Though there are no hard statistics on the amount of laundered money invested in art, law enforcements officials and scholars agree they are seeing more of it.
Read the whole article here:
Previously on this blog: