The following year, in 2013, an even more high-profile laundering case surfaced when a Jean-Michel Basquiat painting worth $8 million was found in a crate at Kennedy Airport on its way from London. 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. In 2004, Ferreira went $1 billion in debt after his financial empire, much of which was built on embezzled funds, collapsed. During his reign over Banco Santos, he had bought 12,000 pieces of art. In 2006, Ferreira was sentenced to 21 years in prison for bank fraud, tax evasion, and money laundering. But before his arrest, $30 million of his art collection was smuggled out of Brazil. The scheme was uncovered when Hannibal was found at JFK. According to court papers, the painting was originally bought for $1 million in 2004 by a Panamanian company called Broadening-Info Enterprises, which was later discovered to be owned by Ferreira’s wife, Márcia.
Governments around the world have stepped up their efforts to combat money laundering in recent decades, with regulations that require financial institutions to put systems in place to detect and report suspicious activity. The amount of money involved is substantial: According to a 2018 survey from PwC, global money laundering transactions account for roughly $1 trillion to $2 trillion annually, or some 2% to 5% of global GDP .

Another reason that art fraud is difficult to control is that the art market is enormous, unwieldy, and greatly varied, embracing items from Victorian buttons to 6th-century Greek vases and from medieval pilgrim badges to contemporary photographs. Business is often conducted under the veil of secrecy, with buyers wishing to remain anonymous to avoid the attention of burglars and other opportunists. It would be logistically impossible to monitor all of the transactions between dealers, private collectors, and museums that are in the business of acquiring art. Suspected art forgeries are generally considered on a case-by-case basis, because they can usually be identified only by an expert in the field. But it is not unusual for two experts to have wildly different opinions of the authenticity of the same object, based in each case on reputable evidence.
Open a foreign bank account in a tax haven like Switzerland or the Cayman Islands. Banks in these countries are not required by law to hand over information about your account to anyone without your consent. If you open what's called a “numbered account” in a private Swiss bank like Union Bank of Switzerland or Credit Suisse Group, a number or code name will be associated with the account, rather than your name. To open a numbered account, you will most likely need to travel to Switzerland to do it, though if this is impossible, there are firms that help people set up off-shore bank accounts that can help you. You will most likely need to make an initial deposit of at least $100,000 to open the account, which will cost roughly $300 a year to maintain.
In seeking to revoke the sale based on an “incomplete” provenance, the buyer claimed that the provenance constituted a warranty under the Uniform Commercial Code (“UCC”) because it was part of the “basis of the bargain.” Under UCC § 2-313(1)(a), “[a]ny affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.” Section 2-313(1)(b) provides that “[a]ny description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.” It is hard to argue that these sections are not worded broadly enough to encompass the provenance of art work, assuming that provenance was considered part of “the basis of the bargain” when the artwork was sold. The bad news for the seller is that determining whether the provenance was part of “the basis of the bargain” in a given transaction will likely be a question of fact for a jury to decide. That means that, absent precautionary measures such as an express disclaimer as to completeness and accuracy, the question of whether the provenance provided by the seller in an art sale constitutes a warranty will not be decided until after a good deal of expensive litigation. And it is certain that if the provenance is arguably misrepresented or incomplete, the buyer will be able to produce an “expert” to testify about the importance of provenance in the art world, all in support of the buyer’s argument that the given provenance was part of the basis of the bargain.

Despite being perfectly legal and of exceptionally high quality, art reproductions do carry a stigma. The owner of one faux Picasso recounted the story of how his grandparents, after selling their entire collection, commissioned a major auction house to duplicate each piece as gifts for their grandchildren. He declined to be named. Two sources from Christie’s, who spoke on background, have confirmed that reproduction is a common practice there. And as of press time, the Metropolitan Museum of Art has not returned our request for comment.
↑ Mario Clouds Not Bootleg V1.1 is a variation on Super Mario Clouds by Cory Arcangel. It was made available on the site NetVVorth as part of a collection of "forged" works by iconic digital artists. (Arcangel also offers instructions on his website that allow anyone to create a bootleg version of the piece.) It is still credited to "Cory Arcangel" in an attempt to highlight the ease of forging digital work. 
The 20th-century art market has favored artists such as Salvador Dalí, Pablo Picasso, Klee and Matisse and works by these artists have commonly been targets of forgery. These forgeries are typically sold to art galleries and auction houses who cater to the tastes of art and antiquities collectors; at time of the occupation of France by German forces during World War II, the painting which fetched the highest price at Drouot, the main French auction house, was a fake Cézanne.[4]

Forgeries again came into play at Turkey’s State Art and Sculpture Museum in Ankara, where a group of museum officials and criminals are believed to have teamed up to steal some 302 works from the institution between 2005 and 2009. The crime was discovered in 2012, when the museum realized that 46 pieces in the collection had been replaced by copies. Another 30 works also raised suspicion.
In recent weeks, the art world has been rocked by perhaps the biggest forgery scandal to hit the art world since Van Meegeren’s unmasking. The extent of the Old Master forgery ring is as of yet unknown, but Sotheby’s has already issued a refund to the buyer of a $10 million Frans Hals portrait, sold in 2011 in a private sale through London dealer Mark Weiss. James Martin’s Orion Analytical, a Williamstown, Massachusetts-based company which investigates artworks, found modern-day materials in the canvas, proving it to be a forgery.

To sum up, the Times muddles the very different issues of ensuring the integrity of works of art—the authenticity question—which is real and requires an entity that can work with owners who want to maintain their anonymity for legitimate reasons with the issue of beneficial ownership—which is less pressing with art because it is relatively rare and covered by the parallel system of KYC run by the banks the auction houses rely upon to vouch for their clients’ ability to afford the works they want to buy.
* Provenance must specifically describe the piece of art that's being offered for sale in order to be valid. It should contain important information including dimensions, medium, date of creation (if known), title (if known), and other relevant details. Documents that do not specifically describe the work of art in question do not constitute valid provenance.
Despite all the studies and technical tests available, forgeries will still be made. The 20th-century art forger is far better equipped and much more knowledgeable than his predecessor. The demand for rare works of art has increased, and he will attempt to supply them. In collecting, whether by the private collector or by a museum, there comes a point when, after all the studies and all the tests are conducted, a decision has to be made as to whether or not to purchase a piece in question. The element of risk can be minimized but not eliminated. At this point, the collector should be ready to back his opinion with the purchase price. In order to acquire great pieces, particularly from newly discovered and relatively unknown cultures, it is necessary to take a calculated chance. The collector who has never bought a forgery probably has never bought a great piece of art.
Philip Byler, Broadening’s lawyer in New York, said that the inaccurate invoices were merely a shortsighted attempt by the art dealer that Broadening hired to save importation fees. “It was not done with the intention of smuggling,” he said. He also challenged the Brazilian authorities’ claim, saying that “Hannibal” was legally purchased from a company owned by Mr. Ferreira’s wife.
The Internet has put a new spin on the old crime. The rise of online banking institutions, anonymous online payment services and peer-to-peer (P2P) transfers with mobile phones have made detecting the illegal transfer of money even more difficult. Moreover, the use of proxy servers and anonymizing software makes the third component of money laundering, integration, almost impossible to detect—money can be transferred or withdrawn leaving little or no trace of an IP address.
Following these professional museum standards, TMA periodically reviews its holdings and occasionally deaccessions a select few works of art, based on what will enhance the entire Museum collection. The funds realized from deaccessioning are used solely to improve TMA’s collection through the purchase of new art, in compliance with the Association of Art Museum Directors (AAMD) Professional Practices in Art Museums (see here), the American Alliance of Museums (AAM) Code of Ethics (see the most recent update to AAM’s guidelines here) and the International Council of Museums (ICOM) Code of Ethics (see here).
Art history is rife with high profile scams, such as that of Han van Meegeren, a disillusioned painter who developed a complicated system of baking his Old Master-style work to age it, and subsequently sold $60 million in fake Vermeers to world class museums and Nazi leader Hermann Göring during the late 1930s and early 1940s. (While current art historians are quick to slam his work as obviously inferior, Van Meegeren actually had to paint a “new” Vermeer at trial to prove he had not sold the Nazis a priceless original.)
Perhaps most frightening of all, there is no telling how many fakes still lie in plain sight, accepted as originals by experts and the public alike. Famed contemporary forgers such as Wolfgang Beltracchi and Mark Landis, for instance, have infiltrated many museum collections. In 2014, Switzerland’s Fine Art Expert Institute estimated that 50 percent of all work on the market is fake—a figure that was quickly second-guessed, but remains troubling.

* Provenance must specifically describe the piece of art that's being offered for sale in order to be valid. It should contain important information including dimensions, medium, date of creation (if known), title (if known), and other relevant details. Documents that do not specifically describe the work of art in question do not constitute valid provenance.


One may logically question the real meaning of the difference between a genuine and a spurious work of art when in many cases it requires such expert study to detect the difference between the two. Or to phrase it another way, what is the difference in value of a work of art that has been on view in a museum for 40 years, after it has been proved to be false? This is a somewhat philosophical point in that the object itself has not changed, only our opinion of it. Its monetary value has been reduced from that of a rare, expensive, original piece to that of an attractive but spurious imitation. Its aesthetic quality has become a real danger, as it is a perversion of the truth. The forgery presents a false understanding of the work of an artist or an ancient culture, one which has been perverted in its modern translation. To appreciate the work of ancient artists their work must be studied alone and not be diverted by forgeries, or one will be inexorably misguided.
In the end, maybe this guide was never intended for amoral businessmen in the first place (unless we’ve sorely misjudged our readership!) Maybe this it's more useful to the emerging artists who look for validation (read: dollar signs) in a competitive market. Maybe the artist’s secret to success is appealing to the corrupt and becoming an accomplice to white collar crime (but hopefully not). Are economic criminals the driving force of the art economy? Probably not, but what we do know for certain is that art isn’t only valuable as the evidence of creative genius. It is, to many, a vault.
The second essay (Purchase Price Paid Over Time: “Title Does Not Pass Until Payment in Full”) addresses a very common provision in contracts for the sale of art with installment payments. But, surprising to many art sellers, the Uniform Commercial Code probably makes this provision unenforceable, with consequences for the seller getting his art back.
Speaking on the sidelines of the Art Business Conference, Pierre Valentin, head of the art law practice at London law firm Constantine Cannon, said laundering illicit funds through the art market was seductive because purchases at auctions "can be anonymous and it's a moveable asset. You can put the art on a private plane and take it anywhere. Plus there is no registration system for art."
Philip Byler, Broadening’s lawyer in New York, said that the inaccurate invoices were merely a shortsighted attempt by the art dealer that Broadening hired to save importation fees. “It was not done with the intention of smuggling,” he said. He also challenged the Brazilian authorities’ claim, saying that “Hannibal” was legally purchased from a company owned by Mr. Ferreira’s wife.
Art fraud, the deliberately false representation of the artist, age, origins, or ownership of a work of art in order to reap financial gain. Forgery of a famous artist’s work is the best-known kind of art fraud, but fraud may also result from the knowing misattribution of the age or origin of a work of art—if, for example, an art dealer were to falsely assert that a statue was from 5th-century-bce Greece or that a vase was from the Chinese Ming dynasty, for the purpose of making a greater profit, because works from those particular regions or time periods are deemed more valuable on the contemporary art market. Art theft for resale is also a form of art fraud.
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