MONEY LAUNDERING THROUGH FINE ART AND HOW IT CAN BE DETECTED

Money laundering through the purchase of fine art is a black hole that narcotics traffickers and white collar criminals can drop their criminal proceeds into, with little fear that they will be discovered and exposed. When I spent that decade as a career money launderer some of my clients attended the auctions in New York City looking for suitable investments in Latin American Art to place their refits. Of course, they relied upon frontmen and and proxies to actually bid and purchase the items.

They were also looking to sell their previous acquisitions; I had a relationship with a Coral Gables art dealer from whom I purchased original Art Deco furniture for my own  collection, and he had a source who was a diplomat inside Communist Cuba who was able to smuggle out original works of art inside a diplomatic pouch, which my clients purchased for cash. While a couple of the works were later found to be counterfeit, due to Cuba's flourishing cadre of art forgers, most of them were genuine. Years later, US law enforcement was looking for them after their convictions; they were never found.  

Unfortunately you can count the number of detectives who have university degrees in fine art on the fingers on one hand; most investigators could not identify an Old Master if they tripped over it, which is  a boon for enterprising money launderers working for narcotics traffickers looking to clean their money. Remember, you can literally throw a million dollars painting, siting in a cheap frame, in the boot of your Volvo in Poland, and drive it to London, or anywhere  else in Europe, without detection. Some laundrymen drop an extremely valuable purchase into a shipment of cheap copies and ship it globally, only to see it on there other side of the world, walking away with what their lawyers describe as a "find," having successfully navigated the complete cycle of money laundering, with nobody the wiser, especially law enforcement.

Today's however, employing the expanded search ability in programs using advanced artificial intelligence, criminal investigators, smart compliance officers, insurance agents looking for provenance, and others, can extract search remote records and publications, and find relevant data from the either side of the opaque art world, where cash-deals prevail, but where prior sales offers can still expose covert sales, and trip up the money launderers and their clients. Advanced AI/ML technology can reach out and find where these dirty transactions started, and even where they ended up. Art money laundering crime has now become a much more dangerous undertaking for the laundrymen, thanks to emerging technology. 

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Note: The above painting, Femme Cheval,  by the Cuban artist Wilfredo Lam (1902-1982), which sold for $1.6m at Christie's, appears here only to illustrate the value of such works. We are not claiming that it was ever part of any money laundering activity.