Art

Rich Russians’ Art Buying Is Target of US Crackdown on Trade-Sanction Cheats

Published

2 years ago

February 1, 2023

(Bloomberg) — The US crackdown on trade-sanction violators is turning to the art world as authorities track down works bought or sold by ultra-rich Russian tycoons.

Through a series of subpoenas, federal prosecutors in New York are demanding high-end auction houses in the US turn over years of records as they seek to determine if art was smuggled offshore or if proceeds from sales were transferred illegally, according to a person familiar with the investigation.

Among those named in the subpoenas are sanctioned Russian tycoons Andrey Melnichenko, Viktor Vekselberg and Roman Abramovich, along with Ukrainian billionaire Ihor Kolomoisky, said the person, who asked not to be identified because the information isn’t yet public. The records requested of auction houses include any previous dealings with the men, according to the person, who didn’t disclose all the companies that were served subpoenas.

Of the major auction houses contacted by Bloomberg, Christie’s International Plc said it “cooperates and complies fully with law enforcement as and when we are required to do so.” Phillips Auction House said it has measures in place “to ensure that no individual or institution targeted by sanctions are able to do business directly or indirectly through our salerooms.” Sotheby’s and Bonhams & Butterfields Auctioneers Corp. didn’t immediately respond to requests for comment.

Since Russia’s invasion of Ukraine, the US has expanded sanctions targeting Russian businessmen and companies with ties to Vladamir Putin. That’s led to seizures of luxury assets, from a yacht in the South Pacific to art work in a French gallery. The US Justice Department also plans to seize a Greenwich Village townhouse linked to Russian billionaire Oleg Deripaska.

Read more: Art Seized at US Homes Part of Crackdown on Wealthy Russians

With its search of auction houses, the department is looking to track down “professional sanctions evaders” — people who help the wealthy avoid restrictions and launder money. This month, prosecutors charged two men, including a former FBI special agent, with aiding Deripaska and violating sanctions.

According to Georges Lederman, an attorney who specializes art crime and asset forfeiture cases, the crackdown has been the result of greater coordination between the Treasury Department’s Office of Foreign Assets Control, which oversees the sanctions list, and prosecutors trying to stop money laundering.

“In the past if you violated a sanction, you got a big fine and then you had to implement a more sophisticated anti-money laundering program,” Lederman said. “But now, because of Russia sanctions and heightened awareness, there is a greater referral of money laundering prosecutions.”

In recent months, prosecutors in Manhattan have narrowed the focus of their inquiries, asking about specific artworks bought years ago, as well as some real estate, according to the person familiar with the matter. The probe is being led by the US Attorney’s Office in the Southern District of New York and the federal KleptoCapture task force, which was set up to police Russian sanctions. A spokesman for KleptoCapture declined to comment.

$50 Million Monet

Fertilizer tycoon Melnichenko, with a net worth estimated at $12.7 billion by the Bloomberg Billionaires Index, is said to have purchased Monet’s “Le Bassin aux Nympheas” for 40.9 million pounds ($49.6 million) in 2009. Abramovich is Russia’s second-largest steelmaker and previously owned London’s Chelsea Football Club. His ex wife, Daria Zhukova, was a Russian art collector.

KleptoCapture’s lead prosecutor Andrew Adams told the NYC Bar Association in November that his team was focused on taking “assets off the table” before they could be moved to other jurisdictions.

One such alleged facilitator was UK businessman Graham Bonham-Carter, who was indicted in October and accused of trying to transfer artwork owned by Deripaska, who is under US sanctions. Using a shell company, Deripaska purchased 18 pieces of art at a New York auction in 2008, a decade before he was sanctioned, according to an indictment. The art works were kept in a New York storage facility until Bonham-Carter allegedly try to ship them out of the country in 2021.

Bonham-Carter is fighting extradition from the UK to the US to face charges.

In the wake of a 2020 Senate report on sanctions evasion in the art world, major auction houses and private sellers started including as a standard condition in contracts that the buyer or seller not be sanctioned or engaged in criminal activity, said Thomas C. Danziger, a New York-based attorney specializing in art law.

The leading auction houses have implemented voluntary anti-money laundering programs, but that may not be enough to prevent the true owners of art works from shielding themselves themselves behind webs of corporate structures or relatives.

“Putin’s banker is unlikely to walk into a gallery on Madison Avenue and buy a Picasso,” Danziger said.

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Art

Calvin Lucyshyn: Vancouver Island Art Dealer Faces Fraud Charges After Police Seize Millions in Artwork

Published

1 day ago

September 13, 2024

Harry Miller

In a case that has sent shockwaves through the Vancouver Island art community, a local art dealer has been charged with one count of fraud over $5,000. Calvin Lucyshyn, the former operator of the now-closed Winchester Galleries in Oak Bay, faces the charge after police seized hundreds of artworks, valued in the tens of millions of dollars, from various storage sites in the Greater Victoria area.

Alleged Fraud Scheme

Police allege that Lucyshyn had been taking valuable art from members of the public under the guise of appraising or consigning the pieces for sale, only to cut off all communication with the owners. This investigation began in April 2022, when police received a complaint from an individual who had provided four paintings to Lucyshyn, including three works by renowned British Columbia artist Emily Carr, and had not received any updates on their sale.

Further investigation by the Saanich Police Department revealed that this was not an isolated incident. Detectives found other alleged victims who had similar experiences with Winchester Galleries, leading police to execute search warrants at three separate storage locations across Greater Victoria.

Massive Seizure of Artworks

In what has become one of the largest art fraud investigations in recent Canadian history, authorities seized approximately 1,100 pieces of art, including more than 600 pieces from a storage site in Saanich, over 300 in Langford, and more than 100 in Oak Bay. Some of the more valuable pieces, according to police, were estimated to be worth $85,000 each.

Lucyshyn was arrested on April 21, 2022, but was later released from custody. In May 2024, a fraud charge was formally laid against him.

Artwork Returned, but Some Remain Unclaimed

In a statement released on Monday, the Saanich Police Department confirmed that 1,050 of the seized artworks have been returned to their rightful owners. However, several pieces remain unclaimed, and police continue their efforts to track down the owners of these works.

Court Proceedings Ongoing

The criminal charge against Lucyshyn has not yet been tested in court, and he has publicly stated his intention to defend himself against any pending allegations. His next court appearance is scheduled for September 10, 2024.

Impact on the Local Art Community

The news of Lucyshyn’s alleged fraud has deeply affected Vancouver Island’s art community, particularly collectors, galleries, and artists who may have been impacted by the gallery’s operations. With high-value pieces from artists like Emily Carr involved, the case underscores the vulnerabilities that can exist in art transactions.

For many art collectors, the investigation has raised concerns about the potential for fraud in the art world, particularly when it comes to dealing with private galleries and dealers. The seizure of such a vast collection of artworks has also led to questions about the management and oversight of valuable art pieces, as well as the importance of transparency and trust in the industry.

As the case continues to unfold in court, it will likely serve as a cautionary tale for collectors and galleries alike, highlighting the need for due diligence in the sale and appraisal of high-value artworks.

While much of the seized artwork has been returned, the full scale of the alleged fraud is still being unraveled. Lucyshyn’s upcoming court appearances will be closely watched, not only by the legal community but also by the wider art world, as it navigates the fallout from one of Canada’s most significant art fraud cases in recent memory.

Art collectors and individuals who believe they may have been affected by this case are encouraged to contact the Saanich Police Department to inquire about any unclaimed pieces. Additionally, the case serves as a reminder for anyone involved in high-value art transactions to work with reputable dealers and to keep thorough documentation of all transactions.

As with any investment, whether in art or other ventures, it is crucial to be cautious and informed. Art fraud can devastate personal collections and finances, but by taking steps to verify authenticity, provenance, and the reputation of dealers, collectors can help safeguard their valuable pieces.

Art

Ukrainian sells art in Essex while stuck in a warzone – BBC.com

Published

2 weeks ago

September 2, 2024

Harry Miller

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Ukrainian sells art in Essex while stuck in a warzone BBC.com

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Art

Somerset House Fire: Courtauld Gallery Reopens, Rest of Landmark Closed

Published

4 weeks ago

August 18, 2024

Harry Miller

The Courtauld Gallery at Somerset House has reopened its doors to the public after a fire swept through the historic building in central London. While the gallery has resumed operations, the rest of the iconic site remains closed “until further notice.”

On Saturday, approximately 125 firefighters were called to the scene to battle the blaze, which sent smoke billowing across the city. Fortunately, the fire occurred in a part of the building not housing valuable artworks, and no injuries were reported. Authorities are still investigating the cause of the fire.

Despite the disruption, art lovers queued outside the gallery before it reopened at 10:00 BST on Sunday. One visitor expressed his relief, saying, “I was sad to see the fire, but I’m relieved the art is safe.”

The Clark family, visiting London from Washington state, USA, had a unique perspective on the incident. While sightseeing on the London Eye, they watched as firefighters tackled the flames. Paul Clark, accompanied by his wife Jiorgia and their four children, shared their concern for the safety of the artwork inside Somerset House. “It was sad to see,” Mr. Clark told the BBC. As a fan of Vincent Van Gogh, he was particularly relieved to learn that the painter’s famous Self-Portrait with Bandaged Ear had not been affected by the fire.

Blaze in the West Wing

The fire broke out around midday on Saturday in the west wing of Somerset House, a section of the building primarily used for offices and storage. Jonathan Reekie, director of Somerset House Trust, assured the public that “no valuable artefacts or artworks” were located in that part of the building. By Sunday, fire engines were still stationed outside as investigations into the fire’s origin continued.

About Somerset House

Located on the Strand in central London, Somerset House is a prominent arts venue with a rich history dating back to the Georgian era. Built on the site of a former Tudor palace, the complex is known for its iconic courtyard and is home to the Courtauld Gallery. The gallery houses a prestigious collection from the Samuel Courtauld Trust, showcasing masterpieces from the Middle Ages to the 20th century. Among the notable works are pieces by impressionist legends such as Edouard Manet, Claude Monet, Paul Cézanne, and Vincent Van Gogh.

Somerset House regularly hosts cultural exhibitions and public events, including its popular winter ice skating sessions in the courtyard. However, for now, the venue remains partially closed as authorities ensure the safety of the site following the fire.

Art lovers and the Somerset House community can take solace in knowing that the invaluable collection remains unharmed, and the Courtauld Gallery continues to welcome visitors, offering a reprieve amid the disruption.

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