South Florida Criminal Defense Lawyer Blog
The world of high-dollar art and antiques is associated with extraordinary prices paid in cash. For racketeers looking to launder money, this offers an ideal method to launder money. With art sales commonly topping $10 million, it’s hard to imagine a better industry to launder money.
Those charged with money laundering stemming from art sales face serious charges, and should contact an experienced criminal defense attorney immediately to ensure their case receives the best results.
How do Criminals Launder Money in Artwork?
Some cases of money laundering in the art world are relatively simple to understand. Suppose a money launderer needs to launder $1 million dollars. They use that $1 million to buy a painting at auction, then anonymously resell the painting to a new buyer. After the resale, the money launderer has made income from a totally legitimate business dealing.
Other times, money laundering can be more complicated. First, consider the famous case of Jean Michel Basquiat’s Hannibal painting, worth about $8 million. Together, a convicted Brazilian money launderer and former banker attempted to smuggle the painting from Brazil to the United States, via the Netherlands. The pair fabricated shipping invoices, claiming the shipment, containing the multi-million-dollar painting, was worth $100. The painting was most likely on its way to the United States for sale, and the criminal duo was convicted of money laundering.
Next, consider terrorist entities such as ISIS. One of ISIS’s main sources of revenue is the sale of stolen artifacts. When artifacts are found, ISIS either steals them or buys them from the owner at a significantly discounted price. Through a series of middlemen, the artifacts make their way through several different countries on their way to the west. Eventually, the goods are stored in European warehouses where they await a buyer. The lack of documentation and any viable paper-trail mean this is an ideal system for criminal enterprises to launder money.
Regulating the Art Market
With pundits harshly critiquing the ease with which money is laundered in the art industry, lawmakers across the globe have been scrambling to introduce legislation to mitigate the practice. In Europe, the Anti-Money Laundering Directives (AMDL) were introduced to combat criminal practices in the art industry. The AMDL requires all transactions with a value equal to or over EUR 10,000 to be reported and verified.
In the United States, dealers of precious metals and jewelry are required to file Suspicious Activity Reports and comply with other Anti-Money Laundering obligations. Interestingly and somewhat inexplicably, art dealers are not bound by these same regulations. Outside of Europe, most of the world has little to no regulations combatting money laundering in the art industry. The introduction of stricter regulations is necessary to stifle money laundering in the art industry.