Prosecutors, Detector Dogs, and Laws: 6 Law Enforcement Recommendations to Combat Transnational Cultural Heritage Trafficking

Transnational cultural heritage trafficking thrives on an opaque art and antiquities market. Attractive features of this marketplace include discretion surrounding business transactions, easy creation of shell corporations, the high probability that smuggled imports won't be detected, clever mechanisms to move money, infrequent prosecutions of traffickers, and limited regulatory resources.

Police and prosecutors need additional tools to build capacity, spot contraband, and capture the criminals. Here are six recommendations.

#1  Specialized federal prosecutors

At least two federal prosecutors should be assigned to focus exclusively on cultural heritage trafficking. One might be placed in the U.S. Department of Justice in Washington , DC and another in the criminal division at the U.S. Attorney's Office for the Southern District of New York, the heart of America's art and antiquities marketplace.

Only federal prosecutors have authority to prosecute federal felony crimes like importing goods illegally or falsifying import paperwork, crimes which are typically part of antiquities trafficking.

While there have been several commendable cases where federal authorities have seized contraband antiquities and sent them back to their country of origin--particularly in New York City--few have resulted in criminal convictions. This "seize and send" policy must mature into an "investigate and indict" objective, where authorities hold individuals accountable through convictions and criminal penalties. Otherwise thieves, smugglers, fences, and their accomplices will continue to experience no specific deterrence or general deterrence that the criminal justice system uses to curb criminal conduct.

Already the seizure and forfeiture of cultural property in federal court depends on a U.S. Attorney proving that a criminal statute was violated. So it only makes sense that the individuals who commit the underlying crime should be prosecuted too. Once cultural objects are sent away to their country of origin through the seizure and forfeiture process, there is no case left to prosecute because the primary evidence has been sent away, an outcome that occurred even in a case where investigators suspected terrorist financing.

Without federal prosecutions, U.S. attorneys fail to develop the trial or investigative skills needed to uncover and describe to juries criminal networks and their subtle money trails, clandestine trafficking routes, and shell corporations used to move contraband cultural property into the American marketplace.

Specialized prosecutors would be expected to work together to support Homeland Security Investigations and the FBI, which in turn would sharpen prosecutors' white collar crime skills to help guide investigations, craft search warrants, present cases before grand juries, and try cases in the courtroom. The art and cultural property theft cases successfully handled by the team of former Assistant U.S. Attorney Robert Goldman and former FBI Special Agent Robert Wittman serve as an illustration. Roger Atwood's Stealing History tells some of their stories.

#2  State prosecutions

Matthew Bogdanos, a prosecutor at the New York County District Attorney’s Office, is pioneering efforts to apply state law to cultural property crimes. One example is the conviction he secured in the case of People v. Aaron Freedman. Manager of Subhash Kapoor's Art of the Past gallery in New York City, Freedman pleaded guilty in 2013 to felony conspiracy and five counts of felony criminal possession of stolen property. But we need more state prosecutors focused on these types of crimes.

While federal law has jurisdiction over illegal import cases, state law is best used to prosecute sellers of stolen cultural property. Since 2005, CHL’s author has discussed how district and county attorneys--who generally have lots of experience prosecuting property cases--may rely on state receiving stolen property statutes to target culpable sellers of cultural heritage objects.

Every state has enacted a receiving stolen property statute in some form, and these laws generally prohibit a person from selling, transporting, or receiving stolen property. State receiving stolen property laws are fundamentally similar to the National Stolen Property Act (NSPA), the federal statute that outlaws different forms of theft. But many states' laws give distinct advantages to district and county attorneys, allowing them to more easily hold dirty dealers accountable.

For example, over two-thirds of state laws require lower mental states. Where the NSPA requires proof that a criminal defendant had full knowledge that a cultural object was stolen, most state laws only require proof that the offender should know, had reason to know, had reason to believe, or simply believed that the property in a dealer's possession or offered for sale was stolen or probably stolen. A federal prosecutor would need to prove that a dealer actually knew an object was stolen, but a state prosecutor may simply need to prove that a dealer had reason to believe that an artifact had been stolen, which is a much lower legal burden.

More importantly, almost one quarter of the states have a built-in legal assumption that a dealer in goods is presumed to know an object was stolen when (a) the dealer did not reasonably gather information about whether the good was lawfully sold or delivered to the dealer, (b) acquired the good far below reasonable value, or (c) purchased or sold the good outside the regular course of business. New York Penal Law § 165.55(2) is an apt example: "A … person in the business of buying, selling or otherwise dealing in property who possesses stolen property is presumed to know that such property was stolen if he obtained it without having ascertained by reasonable inquiry that the person from whom he obtained it had a legal right to possess it."

In New York, like in other states, it is no defense that somebody else stole the property or that the property was stolen from out of state. And states, for the most part, don't require the stolen property to be valued at $5,000 or more, in contrast to the federal NSPA statute.

All these legal advantages give district and county prosecutors an edge to hold antiquities and other cultural property dealers accountable when a crime has been committed.

#3  Detector dog research

Detector dogs that could sniff out smuggled cultural heritage objects, particularly archaeological artifacts, certainly would help customs agents at U.S. ports of entry.

Huge numbers of commodities pore across America's borders each day. For customs agents to spot illicit art, antiquities, and collectibles arriving by cargo ship or air freight among the countless illegal drugs, guns, bird feathers, mangos, jellyfishes, seeds, counterfeit NFL jerseys, and the like can be overwhelming. Remember too that their highest priority is intercepting radiological, biological, and other explosives before they can cripple the homeland. That is why cultural property detector dogs could prove useful.

Sniffer dogs already have demonstrated their worth to U.S. Customs and Border Protection agents by detecting pests and illegal agricultural goods. That is why research must be undertaken to see if detector dogs can be trained to identify smuggled antiquities and other cultural objects. Preliminary inquiries by Red Arch in consultation with relevant experts suggests that such a research project is worthwhile.

#4  Recordkeeping laws

When a healthy trade becomes a black market temptation for stolen and smuggled cultural heritage, new recordkeeping laws could assist prosecutors and police. These laws would require dealers, galleries, and auction houses to record the identities and transactions of suppliers and buyers of cultural property while upholding legitimate business privacy interests. See the detailed proposal here.

When pawn shops became magnets for stolen property, states overwhelmingly passed recordkeeping laws to help police as well as crime victims. States similarly passed scrap metal recordkeeping rules when stolen copper and aluminum flooded the marketplace. For banks, the USA Patriot Act enacted another kind of recordkeeping rule called Know Your Customer, which helps identify money launderers, terrorist financiers, and foreign corrupt practices within the financial industry. In like manner, law enforcement should have access to business records that would help uncover perpetrators of cultural heritage trafficking.

#5  Enhanced AML/CTF statutes

To zero in on untraceable shell corporations, laundered money, and terror financing associated with cultural heritage trafficking, existing anti-money laundering and counter-terrorist financing laws (AML/CTF) need to be enhanced to include the cultural property market.

Current statutes are designed to root out criminal exploitation of highly susceptible commercial and financial industries. Yet the marketplace for art, antiquities, fossils, ancient coins, and other cultural property remain absent from this list.

The Financial Action Task Force (FATF), the seminal inter-governmental organization focused on AML/CTF, specifically identifies illicit trafficking of cultural goods, counterfeiting of antiquities, and the illegal trade of antiquities as facilitators of money laundering and terrorist financing. Moreover, the U.S. Department of State's Bureau of International Narcotics and Law Enforcement Affairs Office of Anti-Crime Programs specifically refers to "art dealers" when  discussing AML/CTF  objectives. The Basel Art Trade Guidelines also point out, "Far more serious than shady dealings in a legal gray area, the sector’s shadow economy encompasses issues ranging from looted art, professional counterfeiting and fake certificates to the use of art sales for the purpose of money laundering.

Pawnbrokers, car dealers, dealers in precious metals and jewels, travel agents, and other NBFI's (non-bank financial institutions) are identified by AML/CTF laws as industries where criminals are known to clandestinely move large amounts of money or discreetly convert cash into high value goods. But the art and antiquities marketplace is not included in the Bank Secrecy Act, the USA Patriot Act, and other AML/CTF statutes. This needs to change.

An additional legislative change is needed to expose cultural property smugglers who set up a myriad shell corporations to discreetly hide their business operations. They create untraceable companies that only exist on paper and whose officers remain unknown, or they use layers of shell corporations to transfer cultural contraband through a maze of paper trails to throw off investigators.

One proposal currently wending its way through the U.S. Senate seeks a solution. The Trade Facilitation and Trade Enforcement Act (S. 1269 and similar companion bills) calls on the Department of Homeland Security to assign a single registration number to an importers of record. That way importers can't set up multiple import companies to hide their identities or their trade activities.

[Sidebar: Setting up a separate, companion corporation is not per se illegal. But hiding illegal business transactions in a shell corporation is not. Cases involving "Bactrian Global Enterprises" and Nimbus Import Export are two examples where separate corporations were maintained. Were they for legitimate reasons or not?]

#6  Adding the cultural property market to attorneys’ general consumer protection watch lists

Cultural property crimes impact consumers who may pay substantial amounts for ancient Greek vases, Egyptian sculptures, and similar cultural heritage objects. The objects might be looted, stolen, or smuggled, or they might be fakes. Because cultural property markets contain a number of recently surfaced artifacts without documented collecting histories, or with thinly veiled collecting histories, or with entirely false histories, consumers risk purchasing illegal or fake heritage objects. That is why state attorneys general should instruct their consumer protection divisions to be watchful.

Attorneys general typically enforce laws that protect consumers against deceptive, unfair, unconscionable, and/or unlawful business practices, and they are endowed with civil and criminal legal tools to investigate illegal misconduct by a particular company or by an entire industry.

New York General Business Law § 349(a) is one statutory example that proclaims, "Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful." Executive Law § 63(12) gives the Empire State's attorney general power to investigate and issue subpoenas, even in cases where there was no actual intent to deceive. Where representations or omissions may reasonably have misled consumers, the NY attorney general can bring an action on behalf of the affected consumers.

An example of an industry-wide consumer protection investigation is NY Attorney General Eric Schneiderman's recent probe into abuses found within the concert and sports ticket industry. Other investigations might focus instead on a single business. Oftentimes, state attorneys general will partner each other and/or with federal consumer protection agencies to confront systematic problems that are widespread.

So when the National Association of Attorneys General meets this month, its Consumer Protection Committee should add the cultural property market to its watch list.

Photo credits: Pixabay / David Mark, Freeimages.com / Marc Dorsett, Freeimages.com / Joe Zlomec, Freeimages.com / dgood007, Freeimages.com / Bob Smith, Pixabay / Edward Lich

Text copyrighted 2016 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, and museum risk management. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of any blog post without the express written consent of CHL is prohibited. CHL is a service of Red Arch Cultural Heritage Law & Policy Research, Inc.

Federal Agents Easter and DiGiovanni Lauded in Heritage Trafficking Documentary

Click here to watch "The Real-Life Indiana Jones"

A new documentary lauds the hard work undertaken by Homeland Security's Senior Special Agent Brent Easter and retired Port of Newark Customs and Border Protection Officer Domenic DiGiovanni to uncover the Kapoor cultural heritage trafficking scheme.

The law enforcement officers are unsung heroes who have fought resolutely against transnational criminals who steal history and culture from abroad and then traffic their loot in the United States.

The pair have been singled out in the just released documentary titled "The Real-Life Indiana Jones," produced by ESPN's FifeThirtyEight Films.

Now we simply need specially designated federal prosecutors who will support these police investigations by indicting and convicting antiquities traffickers in U.S. courts of law.

Text copyrighted 2015 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, art law, cultural heritage policy, antiquities trafficking, and museum risk management. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of any blog post without the express written consent of CHL is prohibited. CHL is a service of Red Arch Cultural Heritage Law & Policy Research, Inc.

Antiquities Trafficking Investigation Reveals Suspected Ties to Terrorism and Money Laundering -- "Seize and Send" Outcome Flags Need for Special Prosecutors

ICE returned smuggled antiquities to Afghanistan
during a photo-op held in Washington, DC in 2013.
No prosecutions resulted from the case.

Newly obtained documents released by Immigration and Customs Enforcement (ICE) reveal that ICE Homeland Security Investigations (HSI) investigated a suspicious shipment of cultural heritage objects imported into the United States, but no prosecutions resulted.

In 2011, U.S. Customs and Border Protection (CBP) and the HSI New York El Dorado Task Force (EDTF) seized a falsely labeled package that bore the hallmarks of antiquities trafficking. ICE investigators voiced concern about the possibility of money laundering, ties to terrorism, and how the same importers already had been involved in previous investigations. Meanwhile, they openly spoke about artifacts pouring out of Afghanistan and Pakistan. Authorities seized the goods because of violations of federal law, including the commission of felony crimes.

Yet the investigation produced no arrests, no indictments, no prosecutions, and no convictions even for those who lied on the customs forms. In fact, the newly released documents confirm that no prosecutor was assigned to the case.

ICE is the investigative arm of the Department of Homeland Security (DHS). It is tasked with conducting criminal investigations; combating transnational crimes that exploit legitimate trade, travel and financial systems; enforcing the customs and immigration laws; and protecting the nation against criminal and terror organizations. HSI was formed in 2010 through the unification of ICE's former Offices of Investigations, Intelligence and International Affairs.

While the police agency routinely announces numerous arrests and prosecutions in cases ranging from child exploitation, illegal narcotics, human trafficking, financial crimes, contraband cigarettes, and more, ICE rarely generates criminal prosecutions in cultural property cases.

CHL readers will recall, for example, the highly publicized return of an Assyrian limestone head fragment earlier this year when ICE ambiguously reported "one arrest" related to Operation Lost Treasure--a police program focused on antiquities smuggling--but announced no arrests, indictments, prosecutions, or convictions connected with the illegal importation of the $1.2 million head from Iraq. The object had been brought to the United States illegally in 2008 from the United Arab Emirates.

This "seize and send" policy is starkly revealed in ICE's 2011 antiquities trafficking investigation, the details of which have now been revealed by documents disclosed under the Freedom of Information Act (FOIA). CHL filed the FOIA request in September 2013.

ICE's investigation was part of the touted Operation Lost Treasure program. In place of grand jury indictments, ICE held a photo-op ceremony in Washington, DC in September 2013, returning the evidentiary fruits of its investigative work to Afghanistan.

The carefully redacted and cherry-picked documents released on July 31, 2015 show that authorities intercepted a small shipment passing through New Jersey's international airport during March 2011. The package contained a pitcher and ancient gold objects, and HSI had reason to suspect a link to terrorism.

After the shipment arrived at the Central Air Cargo Examination Facility (CACEF) at Newark Liberty International Airport, CBP notified the HSI Special Agent in Charge New York (HSI SAC/NY), "requesting assistance with the importation of possible smuggled cultural property via express consignment (Fed Ex)," according to a police report dated April 21, 2011.

The customs paperwork accompanying the package obscurely declared, "Brass Jug, Plated Pendants, Unmanifested Gold Pieces" from Great Britain. "No Antique Statement nor provenance supplied," a CBP officer noted.

According to a document titled "Case Agent Cultural Property Art and Antiquities Repatriation Checklist," the import consisted of more than simple housewares and jewelry from England. Instead, there were cultural heritage objects that included:

Oinochoe seized by ICE and sent to Afghanistan.

1. A late Roman oinochoe, or wine pitcher, 5th-8th century A.D. of ovoid form with reeded body and central band of figures within arched reserves, shaped handle Height 4 (sic) 

2. Three (3) Scythian gold repousse, foil appliques. 5th century B.C., each depicting Antelopes. Height of each: 4 inches. Width of each: 3-1/4 inches 

3. Two (2) antique coiled gold ornaments, possibly 17th century. Height of each 3.8 inches. Weight of each: 2 ounces (approximate)

Authorities retained an appraiser who found that the retail values of the objects totaled $29,000 USD, almost 30 times greater than the trifling £650 GBP ($1,048.94 USD) claimed by the importer on the customs paperwork.

The objects had been devalued significantly, probably to bypass the formal customs entry, the kind of entry typically used when importing goods for commercial or resale purposes and the kind of entry that would have required more oversight. The importer likely knew that devaluing the objects below $2000 would cause the shipment to be less eye-catching. The value threshold today for an informal customs entry is $2500.

According to the appraiser, the values that should have been listed on the customs form were:

• Oinochoe, Fair Market: $4,000; Retail: $8,000
• 3 Gold Repoussé, Fair Market, $6,000; Retail: $12,000
• 2 Gold Ornaments, Fair Market, $6,000; Retail: $9,000

A federal investigator confirmed, "It is ... suspected from prior case experience ... that this shipment is being imported improperly as an informal entry versus a formal entry. ... Cultural Property smugglers often utilize this tactic to avoid having their express consignments garner added scrutiny. Formal entries are required to have Harmonized Tariff Schedules, proper provenance or affidavits, invoices, shipping documentation, etc. The failure to provide adequate paperwork also makes this shipment subject to seizure and forfeiture according to 19 CFR 145.11 and 145.12, 18 USC 542, 18 USC 545, 19 USC 1595a (c) 1(a)." Such forfeitures are predicated on individuals committing illegal conduct, especially prosecutable crimes.

An email sent by the CBP Supervisory Officer assigned to Newark Liberty International Airport and dated April 22, 2011 explained that officials actually seized two shipments in March 2011. In addition to the oinochoe and the gold objects, which the customs officer initially believed to have been from the first century, authorities seized Iranian artifacts:

On April 21, 2011 Officer from CACEF-FedEx/UPS along with Special Agents from SAC/NY, El Dorado Task Force (EDTF) Financial Group VI seized two cultural property shipments. 

In one shipment UPS officers targeted and examined a shipment listed as ''Antique Decorative Persian Metalwork". Research by CBPO ... and ICE SA ... determined that the items were from around the 12th century and the actual origin of the shipment to be Iran. The items were being shipped in violation of the 1987 United States Executive Order 12613 imposing an import embargo on Iranian origin goods and services.

In the second shipment FedEx officers targeted and examined a shipment coming from Great Britain that was manifested as "BRASS JUGS PLATED PENDANTS". 

Examination of the shipment revealed a brass jug, gold colored embossed plates and two gold colored pieces. Research by CBPO ..., ICE SA ... determined that these items were being brought in with a false country of origin, undervalued and were from approximately 100 B.C. These items were seized for being violation of 18 USC 545 - Smuggling Goods into the United States." 

Supervisory Special Agent  

Intellectual Property Art and Antiquities Investigations 

Department of Homeland Security

The released documents reveal nothing further about the Iranian objects.

With regard to the shipment containing the jug and gold items, not only did the importer provide bogus descriptions and phony values on the customs paperwork, the importer also misleadingly claimed that the goods originated from Britain. Because the package had been shipped from the Walthamstow neighborhood in London, the importer probably hoped that he could get away with this misrepresentation.

An April 21, 2011 investigative report expounded on this legal violation. "On April 18, 2011, the SME [subject matter expert] further elucidated that none of the items in this shipment could have had Great Britain as a country of origin." As a result, the report recorded that "[t]his importation contained a material false statement related to the country of origin," It pointedly added, "Individuals who smuggle cultural property often utilize false countries of origin to avoid Customs scrutiny in order to import controlled antiquities. Listing a false country of origin is a violation of 18 USC 542 (Material False Statement). If this shipment was destined to an antiquities dealer, they should know and would be responsible to know the country of origin. In this instance [it] is suspected that the false country of origin listed as Great Britain was a known false statement and a violation of 18 USC 545 (Smuggling). The shipment would be subject to seizure under 19 USC 1595 a (c) (Introduction Contrary to Law)."

The oinochoe and gold pieces were supposed to be delivered to a man living in New York City who resided at the same address as a registered New York corporation, referred to here simply as "Bactrian Global Enterprises" (BGE). DHS investigative report number 20 dated October 11, 2011, classified "BGE" as "a business that is suspected of antiquities smuggling and money laundering."

Concerns about smuggling, money laundering, and ties to terrorism almost certainly should have prompted a prosecutor to be assigned to the case. But the documents released by ICE reveal that no prosecutor was assigned. Whether ICE failed to ask for one or whether a U.S. Attorney's Office declined to assign one is unknown. What is known is that no prosecuting attorney was attached to a case flagged as one involving transnational felony conduct. A May 9, 2011 reply to an email sent a few days earlier from a chief CBP paralegal in the Office of Fines Penalties & Forfeitures explicitly confirmed that no attorney had been designated. The Paralegal Specialist asked if there was an Assistant U.S. Attorney involved. "No AUSA" was the dispiriting reply given.

By way of contrast, wildlife trafficking crimes, which are typically investigated by special agents of the U.S. Fish and Wildlife Service (USFWS), have designated prosecutors at the Justice Department's Environmental Crimes Section (ECS) available for consultation. Following the best practice of assigning a prosecuting attorney to a serious or complicated felony-level investigation, the Justice Department points out, "An ECS prosecutor often gets involved early in an investigation, such as when the investigator swears out a search warrant or when a grand jury’s investigative power is needed.  Once the necessary evidence is collected, the prosecutor presents the case to the grand jury for indictment. After indictment, the prosecutor guides the case through complex white collar and environmental law issues and prepares it for trial." ECS prosecutors also partner and coordinate with front-line prosecutors based at U.S. Attorneys' offices.

Repouseé gold foil applique depicting antelope
seized by ICE and sent to Afghanistan

Because ICE failed to arrest, indict, prosecute, or convict any individuals connected with the 2011 investigation, CHL will not identify the names of those who imported the cultural heritage objects or disclose the specific address where the shipment was bound.

With that said, ICE agents paid a visit on September 16, 2011 to the Manhattan address of "BGE" on the pretense of hand-delivering a property seizure notice prepared by a paralegal specialist four days earlier. Delivering it "would be a perfect excuse for an interview," a September 2, 2011 email divulged.

Two federal agents arrived at the Chelsea residence and found an unassuming building, the kind of four-story low-rise that New Yorkers walk by each day and never take a second look. Inside were unspecified antiquities. An agent summarized the encounter in a report dated October 11, 2011. (ICE redacted references to any names in the original report):

On September 16, 2011, Special Agents [   ] and [   ] conducted an interview with [   ] located at [BGE] located at [   ] New York, NY 10011. The interview contained but was not limited to the following topics of conversation: Special Agents [   ] identified themselves [   ] and asked permission to enter… Permission was granted and agents observed the address to be a basement level apartment of approximately two large rooms. One room was set-up as a residential space where two people appeared to be living. The second room appeared to be a large storage room with a computer. Stored in the room there appeared to be large quantities of crafts, jewelry and antiquities. [   ] stated that he lived at the address with his cousin and that the apartment was the location of a jewelry and craft business, and a real estate business. … [   ] relayed that he and his father are in the business known as [BGE] together and he was able to produce a business card attesting to this fact. The card also listed [   ] the cousin living at the address, as an employee of [BGE]. [   ] explained that the business is set-up to predominantly sell costume jewelry and textiles. 

SA [   ] stated he was there to deliver a seizure notice regarding an importation previously destined for [   ] at the address. [   ] stated that he was aware of it but that only his father knows about that specific shipment. [   ] stated that the merchandise for [BGE] comes from Pakistan. When asked specifically where the antiquities come from [   ] interrupted the conversation and stated that the antiquities were all from central Asia. [   ] was able to provide that their Customs Broker's name is [   ]. [   ] also stated that the shipment was sent to his father to sell on consignment and that his father didn't know much about it. SA [   ] explained to [   ] about the seizure notices and the accompanying paperwork and had him sign a sheet acknowledging receipt of the hand carried mail.

That no one knew anything of consequence is a fair summary of this same interview as memorialized by an HSI special agent's supplemental email dated October 5, 2011:

• He and his father are in the business together. They sell costume jewelry and textiles. 

• The father is the one that knows about the shipment.

• He did not know anything about the shipment.

• [   ] is their [customs] broker.

• There was another individual that was a real estate business partner of the father but not with ["BGE"]. Subject name was [   ] unknown proper spelling.

• [   ] stated that the shipment was sent to sell on consignment and that the father didn't know much about it."

Shortly after the interview, and for reasons not explained in the released documents, government information networks rang with alarm. Documents confirm that on Wednesday, October 5, 2011 computer terminals at U.S. border entry points flashed warnings over the Treasury Enforcement Communications System (TECS):

 

"INDIVIDUAL IS SUSPECTED OF DEALING IN ILLICIT CULTURAL PROPERTY DETAIN ALL SHIPMENTS AND IF ENCOUNTERED CONTACTED CASE AGENT...."

"BUSINESS IS SUSPECTED OF DEALING IN ILLICIT CULTURAL PROPERTY BEING SMUGGLED FROM AFGHANISTAN AND PAKISTAN. PLEASE DETAIN ALL SHIPMENTS AND CONTACT THE CASE AGENT...."

Before HSI agents actually conducted their interview in Manhattan, they made an effort to secure a search warrant for "BGE." But they never got one. That likely sparked the idea of serving the property seizure notice as a justification for visiting the importer.

Interestingly, ICE went outside the jurisdiction for help with getting a search warrant. Based on the both the substance and style of a conversation archived in an email string sent on the afternoon of May 10, 2011, one unidentified party, who could be an investigative agent based in the jurisdiction of the Southern District of New York (probably Manhattan), and the other unidentified party, who could be a federal prosecutor in the Eastern District of New York (probably Brooklyn), spoke about the matter.

The email string revolves around a request for an email search warrant. The presumed agent wrote that he or she learned that the suspect(s) already had been investigated for possible terrorism ties to Afghanistan, smuggling, and money laundering. Those cases were closed, and now there was a request for a fresh warrant. The emails offer the following exchange:

Agent: "I received this email a couple of months ago from a source and the pieces being offered are straight out of the ground. I recently seized a package in Newark destined for the address of ["Bactrian Global"] but the ultimate consignee was [    ]. When I inspected the shipment in person, the box (not the shipping label) was addressed to [   ] the principle behind ["Bactrian Global Enterprises"].

"The shipment was seized because it contained a false C/O [country of origin], and contained golden antiquities that were not declared. The shipment was seized on 4/21/2011.

"Would this all be recent and good enough for an email S/W [search warrant] in your opinion? If so, would you do it or could you recommend someone? I can send the ROI [report of investigation] related to the seizure and pictures if interested."

Prosecutor: "Is there any connection to the EDNY [Eastern District of New York]? How much do you think these pieces are worth? True CDO [country of declared origin]?"

Agent: "True C/O [country of origin] is most likely Iraq or somewhere in the middle east[,] the expert couldn't give one country 100% but she was 100% certain it was not GB [Great Britain]. Attached is the report. No estimate on value yet, but we are pretty certain it is more than declared because they failed to declare much of the shipment.

"Just learning that the principles (sic) have prior (failed and closed) investigations into them for money laundering, Cult. Prop. [cultural property] smuggling, and possible terrorism ties to Afghanistan.

"Does the same source who worked the UC op [undercover operation] that took place via JFK [Airport in New York] work [in order to form some legal tie to the Eastern District of New York]? Also, most of their shipments are via JFK. This one wasn't but it also used the wrong name on the shipping label."

Prosecutor: "I don't think we have venue here... I hate that there's dirt caked on them. Though it's so dirty, it makes you wonder if they're trying to increase value by faking a find."

Under the circumstances, a search warrant probably was not issued from the Eastern District of New York because the suspects were located in Manhattan, in the Southern District of New York. A specially assigned heritage trafficking prosecutor based at the Department of Justice in Washington probably could have facilitated this search warrant request by coordinating with the right U.S. Attorney's office. But no such specialist prosecutor exists.

So what looked like a criminal investigation into antiquities trafficking quickly turned into a seize and send case. Instead of holding the evidence and building the investigation for possible grand jury review, indictment, and conviction after trial or plea, ICE sought title to the antiquities through the forfeiture process, eventually sending the cultural heritage objects back to their country of origin. This seize and send disposition effectively terminated any chance of successfully prosecuting those responsible for lying on the customs entry paperwork.

 

An email dated January 25, 2012 from a Supervisory Legal Specialist at CBP 's Office of Fines, Penalties, and Forfeitures touched on this administrative process: "Please be advised that the cultural property in FP&F Case #: [   ] associated with OI #: [   ] has been administratively forfeited. I have attached the appraisal conducted on the seizure of this merchandise so you can determine the repatriation of these items to their rightful nations as per the seizure narrative of this case."

"Please send the seizure notice and Hold Harmless to [   ] Cultural Attache[,] The Embassy of Afghanistan...," requested an HSI SAC/NY special agent in an email dated April 5, 2013.

How Afghanistan and not Iraq or Pakistan came to be identified as the true country of origin remains unknown from the FOIA-released paperwork. Iraq had been mentioned as a possible country of origin in the police reports, and a special agent from HSI SAC/NY mentioned Pakistan in an email dated April 4, 2013, which pointed to the smuggling problem originating from South Asia. "You should see how much Afghan and Pakistani material we have from the [   ] case," the agent exclaimed. An unclassified but redacted email dated April 2, 2013 by an unknown government official echoed this troubling sentiment, "So much material is flowing out of Afghanistan and Pakistan; it really is a shame."

Although the repatriation essentially concluded the case, one undated document from HSI's Office of International Affairs insisted on the continuing nature of ICE's probe:

HSI New York's Operation Lost Treasure is an ongoing investigation targeting an organization smuggling items of world cultural heritage into the United States. The objects enter the antiquities market and the proceeds are laundered. Antiquities have been traced to Afghanistan, Iraq, Greece, Italy, Egypt and Iran and the funds have been traced to Dubai and London. To date, approximately 50 objects have been recovered with an estimated value of $2.5 million.

Whether ICE has probed this four year old case recently is unknown. What is known is that, according to NYS Department of State Division of Corporations Records, "BGE" today lists its principal office on the Upper West Side in New York City. "BGE," formed in 2006, is listed in the Yellow Pages as a home furnishings business that provides arts and crafts supplies. The company is a likely outgrowth of a preceding import/export company begun in the 1980's and now dissolved. Persons connected with "BGE'" and the 2011 investigation appear to use aliases that are subtle variations of their names, and the Manhattan address where HSI agents once visited currently houses at least four registered real estate corporations and an unregistered soft drink/grocery business, according to open source records. As of last month, an apparent relative of "BGE's" owner appears to have formed a brand new company at that address, which seems to be in the same type of business as"BGE."

HSI Assistant Director John Connolly emphasized during the repatriation ceremony of the artifacts to Afghanistan how HSI is "beating back this illicit trade through dedicated law enforcement efforts." But such a declaration remains inconsequential so long as crimes are committed and no perpetrators are brought before the courts. The participation of prosecutors are needed to do that. A designated group of specialist prosecutors working with HSI on their investigation may even have averted another "failed and closed investigation[]," as ICE put it, of cultural property trafficking.

Wildlife trafficking investigations should serve as a model for cultural heritage trafficking prosecutions. Because successful inroads have been made to combat this transnational crime, now more is being done. For the last five years, specialist prosecutors at ECS and their counterparts across the globe have been supported in their mission by the International Consortium on Combating Wildlife Crime (ICCWC), a group of five international organizations--including INTERPOL and the World Customs Organization. The ICCWC's mission is "to usher in a new era where perpetrators of serious wildlife and forest crime will face a formidable and coordinated response, rather than the present situation where the risk of detection and punishment is all too low." USFWS notes that the consortium "was formed to increase prosecution and punishment for caught smugglers and poachers."

Cultural heritage traffickers need to be prosecuted and punished too, and the inside look into ICE's 2011 seize and send case illustrates the point.

Text copyrighted 2015 by Cultural Heritage Lawyer. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of this post without the express written consent of CHL is prohibited. CHL is a project of Red Arch CulturalHeritage Law & Policy Research, Inc.

The Assyrian Head Repatriation: Filling in the Details of ICE's Investigation

This week U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) returned a looted fragmented limestone head of Assyrian King Sargon II to Iraq. The stone carving once sat atop a sculpted winged bull.

In remarks prepared for Monday's repatriation ceremony held at the Iraqi Consulate in Washington, D.C., Assistant Secretary of Homeland Security and ICE Director Sarah R. Saldaña declared, “ICE will not allow the illicit greed of some to trump the cultural history of an entire nation.”

ICE offered limited details in a press release about the artifact's history. But the agency revealed that, "[a]s part of 'Operation Lost Treasure,' HSI New York special agents received information on June 30, 2008, that an antiquities dealer based in Dubai was selling looted Iraqi antiquities to dealers around the world. The special agents seized the limestone statue on Aug. 13, 2008, after it was shipped to New York by a Dubai-based antiquities trading company owned by the antiques dealer."

Assyrian limestone head fragment of Sargon II
repatriated by the U.S. to Iraq on Monday. Courtesy ICE

The press statement added that the "investigation identified a broad transnational criminal organization dealing in illicit cultural property. Some of the network’s shipments were directly linked to major museums, galleries and art houses in New York."

ICE reported that its investigation "resulted in one arrest, multiple seizures of antiquities ranging from Libya, Egypt, and Afghanistan, and the return of many of artifacts. A repatriation ceremony with Afghanistan was held two years ago and future repatriations are anticipated."

Publicly available information fills in some of the details about the trafficked head fragment.

A CHL blog post dated July 24, 2013 reported that federal prosecutors petitioned to forfeit the Assyrian head in federal court in the Southern District of New York. The complaint, filed in the case of United States v. One Iraqi Assyrian Head, alleged that Dubai antiquities dealer Hassan Fazeli exported the artifact from the United Arab Emirates to the U.S. on July 30, 2008. Prosecutors, at the time, did not identify the head as a carving of Sargon II.

Prosecutors explained that Turkey was listed as the country of origin on the customs import form rather than Iraq. And the import form incorrectly listed the value as $6500 rather than $1.2 million, , according to the court complaint.

Prosecutors sent notice of the forfeiture to Hassan Fazeli Trading Company in Dubai, the potential civil claimant. But after time passed without a reply, on June 17, 2014 the federal district court entered a default judgment, awarding the Assyrian sculpture to U.S. authorities with instructions that the head must be repatriated within 90 days "or as soon thereafter as conditions in Iraq permit."

The court granted an extension for the repatriation after a request made by an assistant prosecutor, who told the court that more than 90 days would be needed to return the artifact "[i]n light of [the] current state of world affairs."

The judge asked why there had been a gap between the 2008 seizure of the artifact and the 2014 forfeiture. The assistant prosecutor responded:

I am not aware of why there was. I can offer that in many cases, your Honor, where there are assets to be forfeited, sometimes there are parallel investigations, criminal matters, and sometimes the government proceeds to file criminal charges in matters and items are forfeited in connection with criminal matters. Sometimes the government decides to just proceed civilly. This is a civil complaint in which the forfeiture is purely in rem and only the item that is at issue is being forfeited.

The assistant prosecutor told the court that a confidential source informed law enforcement officials that

Mr. Fazeli ... was attempting to sell this stolen item or an item that we believe to be removed from Iraq in violation of Iraqi law and in contravention of United States regulations as well. This individual, Fazeli, tried to sell it to the CS [confidential source] and based on recorded conversations, based on an investigation by Homeland Security, eventually was able to ship it to the United States with false documentation indicating false origin, actually indicated that the item was from Turkey.

Federal prosecutors in the Eastern District of New York named Hassan Fazeli Trading Company as a potential claimant in another forfeiture case. The civil case involved three ancient Egyptian limestone reliefs, a block statue, and a funerary boat valued at $57,000. It may be the one referred to by ICE on Monday when officials explained at the Iraqi repatriation ceremony that the investigation into the Sargon II head resulted in multiple seizures of antiquities, including from Egypt.

Docketed as U.S. v. One Ancient Egyptian Fragment Depicting Procession of Offering Bearers et al. and reported by CHL on March 23, 2013, the complaint alleged that the Egyptian archaeological material arrived in a FedEx shipment in August 2010 at Liberty International Airport in Newark, New Jersey. The ancient objects "were sold in and exported from Dubai, UAE by Hassan Fazeli Trading Company, LLC .... [They] were purchased and imported by [Salem] Alshdaifat, by and through Holyland [Numismatics],” claimed the prosecutors.

Alshdaifat pleaded guilty in December 2012 to a misdemeanor charge of accessory after the fact in the case of U.S. v. Khouli et al and received a sentence of a $1000 fine.

At this week's ceremony repatriating the Assyrian head to Iraq, ICE referred to a previous repatriation ceremony with Afghanistan that took place two years ago. The agency has only reported two repatriations to that country around that time, so ICE officials may have been referencing an event that occurred at the Embassy of Afghanistan in Washington, D.C. in September 2013.

At that ceremony, federal authorities returned an ancient Roman oinochoe, three 5th century B.C. gold foil appliques, and two 17th century gold ornaments from approximately the 17th century. ICE explained in an accompanying press release:

On March 21, 2011, U.S. Customs and Border Protection and the HSI New York El Dorado Task Force seized a shipment containing the gold artifacts and the ancient vase at Newark Liberty International Airport, Central Air Cargo Examination Facility, after HSI New York special agents discovered they were destined for a New York City man and later to a New York business suspected of dealing in looted cultural property. Through the investigative process, the antiquities were found to have originated in Afghanistan. On Jan. 25, 2012, the shipment was administratively forfeited.

If these artifacts from Afghanistan somehow were tied to the Assyrian sculpted head fragment from Iraq, that connection has yet to be explained by ICE.

Hopefully the federal agency will provide more complete details describing the investigation, recovery, and return of the Assyrian head fragment now that the matter has been concluded by ICE.

Text copyrighted 2015 by Cultural Heritage Lawyer. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of this post without the express written consent of CHL is prohibited. CHL is a project of Red Arch Cultural Heritage Law & Policy Research, Inc.

Canadian Man Charged with Trafficking Dinosaur Fossils from China

U.S. District Court in Tucson, AZ.

A man has been arrested in Arizona for allegedly trying to sell dinosaur fossils imported from China to undercover federal agents. Jun Yang, a Canadian, faces criminal charges of archaeological smuggling and wildlife trafficking.

The charges, initiated by U.S. Homeland Security Investigations (HSI), likely will be challenged by defense lawyers because of legal irregularities.

Filed on Tuesday in federal district court (15-mj-07055), the complaint alleges that the defendant

did fraudulently and knowingly offer for sale and sell merchandise, namely one Psittacosaurus fossil and  approximately 15 Hadrosaur fossil eggs, after the merchandises' importation into the United States, knowing said merchandise had been imported into  the United States contrary to law; that is, ... Jun Yang knowingly sold said merchandise knowing that they are cultural property that had been imported into the United States from the People's Republic of China contrary to law, that is specially protected fossils are prohibited  from being sold to any foreigner or foreign organization, all in violation of Title  19, United  States Code  Section  2606(a) [the Cultural Property Implementation Act (CPIA)] and Title  18 United States Code Section 545 [the anti-smuggling law].
...
[and] did unlawfully and knowingly import in foreign commerce, transport, receive and acquire any wildlife, that is one Psittacosaurus fossil and approximately 15 Hadrosaur fossil eggs, knowing that said wildlife were taken, possessed, transported and sold in violation of the laws of the People's Republic of China. all in violation  of Title  16 United States Code. Sections 3372(a)(2)(A) and 3373(d)(l)(B) [the Lacey Act].

The CPIA, which is relied on by Count 1 in the charging document, is the federal statute that implements the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. While the 1970 UNESCO Convention’s definition of "cultural property" includes "objects of palaeontological interest," the CPIA itself only applies to archaeological and ethnological objects. Palaeontolological material--like dinosaur fossils--are not archaeological or ethnological objects by definition. And while the U.S. has signed a bilateral agreement with China that restricts the import of designated Chinese archaeological and ethnological artifacts across America's borders, that agreement does not prohibit dinosaur fossils.

Count 2 relies on the Lacey Act, a federal law designed to protect wildlife and other natural resources. Under the terms of the statute, it is illegal to import or sell designated wildlife that is taken, possessed, or sold in violation of any law, treaty or regulation of the United States. But are dinosaur fossils wildlife? While the statutory definition of "wildlife" includes a dead wild animal or an egg, would either a dinosaur fossil or dinosaur eggs actually be considered "wildlife"?

The defendant's arrest is explained by the allegations contained in the criminal complaint:

On or about February l0, 2015, in Tucson in the District of Arizona, agents of the Department of Homeland Security acting in an undercover capacity walked through the display area at [a gem and mineral show] .... Agents spoke with Mr. Yang about an item displayed and advertised as a Psittacosaurus Fossil. Mr. Yang stated the fossil was 100 to 130 million years old and from the province Henan and was "dug up" in  central  China  approximately 200-300 kilometers south of Mongolia. Mr. Yang stated the price of the Psittacosaurus Fossil was $15,000.00 (United States Currency) and was not negotiable because of the quality of the fossil. Agents heard Mr. Yang  speak with  another  customer regarding egg fossils adjacent to the Psittacosaurus fossil. Mr. Yang identified the eggs as Chinese dinosaur egg fossils  and told  the agents they were Hadrosaur  Eggs, a "duck billed" dinosaur in  China. A sign on the dinosaur egg fossils display box stated "$450.00" for each egg. 

On or about February 10, 2015, agents posing as shoppers ... again spoke with Mr. Yang about the Psittacosaurus fossil .... Mr. Yang stated that he illegally removed the fossils from China, put the fossils in containers with stone carvings, shipped them to the United States and didn't disclose that fossils were in the containers to US Customs and Border Protection, only paying tax on the stone carvings. 

When asked, Mr. Yang said that the exportation of the Psittacosaurus fossil and the Hadrosaur Eggs were in violation of Chinese law. Mr. Yang stated this was only a violation of the laws of China, not US. Mr. Yang stated he has no documents for any of the fossils. Agents asked for permission to photograph the fossils, and Mr. Yang agreed. 

The pictures were later sent to a Subject Matter Expert (SME) who, based on the photographs taken by the agents confirmed the fossils are a Psittacosaurus fossil and Hadrosaur Eggs and were indigenous to certain regions of China. The SME stated that these fossils are of high scientific value. A review of the law of the Peoples Republic of China prohibits the sale of specially protected fossils to foreigners or foreign organizations. 

On or about February 14, 2015 an agent acting in an undercover (UC) capacity entered the Arctic Products Inc. display area posing as a shopper. The UC agent started the conversation with Mr. Yang about the Hadrosaur Eggs that were on display and inquired as to how many they would be able to purchase for five-thousand dollars (USD-$5000.00). Mr. Yang stated that the Hadrosaur Eggs are from China, that they were very rare and that he used to have a lot, but may not be able to get them anymore. Mr. Yang stated that he already sold one (1) Hadrosaur Egg for four hundred fifty (USD-$450.00) but stated he would sell thirteen (13) Hadrosaur Eggs at a discounted rate for five-thousand dollars (USD-$5000.00) to the UC agent. 

The UC agent then inquired about the Psittacosaurus fossil.... Mr. Yang explained to the UC agent that the Psittacosaurus fossil was approximately 130-100 millions years old and it was for sale for fifteen thousand dollars (USD-$15,000). Mr. Yang stated that all the stuff was from China. Mr. Yang stated that he has had the Psittacosaurus fossil for a few years and that it was from the North-Eastern part of China. When asked how he got the fossils out of China, Mr. Yang stated the fossils are put in containers with the stone carvings and "we do not declare, we declare it as stone."

An arrest is not a finding of guilt; it is simply a process that initiates a criminal court proceeding. The prosecution bears the burden to prove that a defendant is guilty beyond a reasonable doubt.

Photo source: U.S. DoJ

Text copyrighted 2015 by Cultural Heritage Lawyer. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of this post without the express written consent of CHL is prohibited. CHL is a project of Red Arch Cultural Heritage Law & Policy Research, Inc.