Museum Raids Cases: Rare Antiquities. Rare Convictions for Gallery Owners. Rare Prison Sentence.

In the annals of cultural property law, prosecutions targeting transnational antiquities trafficking networks are rare. Even more rare are felony convictions. Scarcer still are prison sentences.

So what happened this week to a pair of California gallery owners tied in with the "Museum Raids" cases is a momentous achievement, an example of careful and intelligent case development by the U.S. Attorney's Office for the Central District of California, resulting in felony convictions for antiquities traffickers rather than a "seize and send" photo-op that cultural property watchers are accustomed to witnessing.

Jonathan and Carolyn Markell, aged 70 and 68 and owners of Silk Roads Design Gallery, were sentenced on Monday for their role in an elaborate scheme that mixed international heritage trafficking with tax evasion.

Calling the crime "significant," United States District Judge Dean D. Pregerson said it was “important to send a message” to art collectors, gallery owners and museums that they should avoid collecting and trading looted antiquities.

The court handed down an 18 month prison term to Jonathan Markell on a felony count of conspiring to import goods using false statements in violation of 18 U.S.C. § 371 (conspiracy) and 18 U.S.C. § 542 (importing goods using false statements). His wife, Carolyn, received a sentence of probation on a felony charge of conspiracy to commit tax evasion pursuant to 18 U.S.C. § 371. Jonathan Markell also pleaded guilty to conspiracy to commit tax evasion.

“Mr. Markell’s greed placed his art gallery’s profits above the culture and heritage of the people of Thailand,” said United States Attorney Eileen M. Decker in a press release.

There were no complaints about the court's 1 1/2 year sentence, even though prosecutors sought a 2 ½ year prison term for Jonathan Markell because, in prosecutors' words, "it is clear that Jonathan Markell has no respect for the law—not this nation's laws, nor those of other nations."

In seeking a prison term, prosecutors, notably among them Assistant U.S. Attorney and Environmental Crimes Chief Joseph Johns, sought both specific deterrence and general deterrence.

The attorneys pointed out the obvious to the court, that "it is rare that law enforcement officials have the opportunity to catch a broker, bulk sellers, or gallery owner that drives the illicit market for archeological resources." That is why, they contended,

Defendant Jonathan Markell’s antiquities smuggling case presents a unique opportunity to send a message and afford adequate deterrence to the 'upper end' of the criminal black market for looted archeological resources, i.e., the brokers and gallery owners who sell their wares to the collectors. If we are able to diminish and disincentivize the market (or demand) for illegal antiquities, then we may have an equal effect on taking the monetary incentives out of the act of looting itself. It is the market, or demand, which drives the looters at the ground level to provide the supply of stolen antiquities to meet that demand. 

Jonathan Markell’s sentence of 18 months behind bars perhaps is the most ordered by a court in a transnational antiquities trafficking case since U.S. v. Schultz, a federal case from 2002 that saw Frederick Schultz, a high profile and successful Manhattan antiquities dealer, sentenced to serve 33 months in prison after a jury found the defendant guilty of the felony of receiving stolen Egyptian antiquities that had been transported in interstate and foreign commerce in violation of 18 U.S.C. § 371 (conspiracy) and 18 U.S.C. § 2315 (the National Stolen Property Act).

That case failed to serve as a warning to the Markells as the investigation into the husband and wife and their co-conspirators began the following year, in 2003 when a National Park Service (NPS) special agent began to uncover the trafficking network that had been smuggling archaeological material from Southeast Asia.

In January 2008, federal agents from several law enforcement agencies raided a variety of locations, including four museums in California. Police descended on the Los Angeles County Museum of Art, the Bowers Museum, the Pacific Asia Museum, and the Mingei Museum with search warrants to “seize in place” ancient objects identified as potential evidence. Officials simultaneously seized evidence from the Markell’s home as well as their art gallery.

The museum raids generated three published criminal cases:

• United States v. Robert Olson and Marc Pettibone, et al., which charged a conspiracy to smuggle Southeast Asian artifacts, including from Thailand and Cambodia, into the United States beginning in 2004;

• United States v. Robert Olson and Jonathan Markell, which charged a conspiracy to smuggle Southeast Asian artifacts, including Burmese antiquities obtained in Thailand beginning in 2003; and

• United States v. Jonathan Markell and Carolynn Markell, which charged a conspiracy to commit tax fraud by making false statements when donating smuggled artifacts to museums in an effort to receive tax deductions.

[Sidebar: At least one media report by the Pasedena Patch suggests that legal action against unnamed museums resulted in deferred prosecution agreements. These agreements do not appear in the court system’s public files. It is possible that they are held privately by the U.S. Attorney's Office and not subject to public disclosure]

The Markells pleaded guilty to criminal charges on April 16 after signing a written agreement with federal prosecutors the previous month..

As part of the deal, both defendants conceded that they conspired to knowingly and intentionally defraud the United States for the purpose of impeding, impairing, obstructing, and defeating the lawful government functions of the Internal Revenue Service (IRS) in the ascertainment, computation, assessment, and collection of income taxes, by promoting and participating in a false charitable deduction scheme for the purpose of improperly claiming charitable deductions on federal income tax returns.

The Markells agreed to repatriate 337 artifacts by ocean-borne cargo to their countries of origin, specifically China, Thailand, Cambodia, and Burma; to pay the $25,000 estimated shipping cost; and to cooperate with the IRS to calculate back taxes and penalties from 2004 through 2007, estimated to be $39,891.

In a court pleading filed on December 3, attorneys for the government elaborated on the facts of the case:

In short, Jonathan and Carolyn Markell jointly owned and operated the business Markell Imports, Inc., doing business as the Silk Roads Design Gallery ("Silk Roads"). The Markells’ business model consisted of their purchase and importation of art, antiques, and archeological resources from Southeast Asia, and their resale of such merchandise through their Silk Roads art gallery in West Hollywood.

Part of their business model included the intentional use of false declarations and statements in United States Customs entry documents to “smuggle” or introduce the archeological resources “antiquities” into the United States.

The lawyers flagged a contention made by the Markells, one that is often echoed by ethically ambivalent antiquities dealers who complain that filling out customs forms is too burdensome for small business owners:

During [a police interview], Jonathan Markell stated that he and Carolyn Markell falsified the customs documents to disguise what they were importing because the United States Immigration and Customs Enforcement classification process is difficult if they actually identify a piece as an "antique." Carolyn Markell agreed with her husband's statement.

The Markells further justified their behavior by claiming that United States Customs forces people to lie on import declarations because of the delay in clearing Customs if they properly identify an object as an antique.

Prosecutors added that the Markells failed to fully disclose their criminal conduct to investigators. “For example, they did not admit that Jonathan Markell had conspired with [a] co-defendant to not only falsely describe Burmese and Khmer antiquities in United States Customs import documents ... but also to falsely declare the import value of those antiquities as 25% of their true purchase price.”

The attorneys said that neither defendant “admitted ... that they knew that it was illegal to export archeological resources/antiquities from the countries of China, Thailand, and Burma—which is most likely the reason that the antiquities were falsely described in United States Customs import documentation.”

Focusing on the pairs’ systematic plan to dodge federal taxes, prosecutors noted that the operation “was heavily dependent upon the ready availability of Southeast Asian antiquities obtained ... through the antiquities smuggling scheme .... The Southeast Asian antiquities smuggled into the United States ... were bundled and sold for approximately $1,500. The[] $1,500 ‘package’ typically included antiquities from Ban Chiang, Thailand, false sales invoices to reflect an earlier sales date, along with a fraudulently inflated $5,000 appraisal that contained a fraudulent expert's signature.”

Prosecutors called the defendants' conduct a “complete contempt for this Nation's rule of law," spotlighting "Carolyn Markell's discussion of the International Emergency Economic Powers Act ("IEEPA") Burmese sanctions with the undercover agent ('UC') in this case":

During that discussion, she told the UC that she had been extremely worried about the last shipment of antiquities that she and Jonathan Markell had brought into the United States from Thailand in September 2006—which had included 7 Burmese statues. She related to the UC that the President of the United States had prohibited entry of any Burmese items into the country, and that she had lost sleep worrying that their import shipment would be intercepted by United States Customs authorities. She told the UC that she did not care about being dishonest, but that she didn’t want to get caught.

Jonathan Markell, meanwhile, “brought up a Los Angeles Daily News article about an individual that had been prosecuted for a tax evasion scheme involving antiquities and a museum," according to prosecutors. "Jonathan Markell laughed about the article, and then asked the UC if he thought that he (Jonathan Markell) was going to jail (for the tax evasion scheme). Jonathan Markell told the UC that the person who had been caught must have done something pretty stupid, and that the government was not going to look at any donation under $10,000.”

The tax scheme relied on the couples’ assumptions that customs officials would overlook mislabeled illegal shipments and that museums and collectors would fail to conduct the due diligence necessary to verify the archaeological objects’ legitimate collecting histories.

Antiquities mostly from Thailand's Ban Chiang World Heritage site were used to fuel the fraud, according to recitals found in the plea agreement, which described how Jonathan Markell “solicited co-conspirators to buy a 'charitable donation package' that included one or more Ban Chiang antiquities to be donated to a charitable institution.” Then “Silk Roads Design Gallery prepared false appraisals for donations of these antiquities to charitable institutions, such as museums and universities using another person’s name.” Jonathan Markell thereafter “contacted charitable institutions to get them to accept his, defendant Carolyn Markell’s, and his co-conspirators donations.” Specifically, prosecutors alleged:

“On or about December 26, 2003, CAROLYN MARKELL sent an email to a museum representative regarding the provenance of donated items as being a purchase in 1984.
Defendant CAROLYN MARKELL determined that she and defendant JONATHAN MARKELL would purchase items to be donated from a certain co-conspirator. Between an unknown date and January 2008, although defendant JONATHAN MARKELL knew that the seller of a donated item could not appraise the item for tax purposes, he prepared appraisals that falsely inflated the value of donation items he sold as part of a "donation package" he sold to co-conspirators. … In or about April 2007, defendant JONATHAN MARKELL advised an unindicted co-conspirator to change the listed purchase date on a museum donation form because it needed to appear that the co-conspirator had held the item for years, namely, ten years, to take the inflated value as a tax deduction. On or about March 10, 2006, defendant CAROLYN MARKELL contacted a museum curator to discuss the museum's policies and requirements. On or about June 14, 2006, defendant JONATHAN MARKELL solicited a Thailand museum curator's electronic signature which he fraudulently inserted on appraisals of items to be donated that he had prepared. ... On or about March 27, 2007, defendant JONATHAN MARKELL electronically mailed a request to the museum curator in Thailand to sign forms to support co-conspirators' charitable donation tax deductions and to sign six to eight blank forms in blue, to support fraudulently future donations. On or about December 13, 2007, JONATHAN and CAROLYN MARKELL delivered donations to a museum on behalf of a client. Around December 2007, defendant JONATHAN MARKELL donated Ban Chiang antiquities to a museum on behalf of co-conspirators, charging them $3,450 for the items and appraisals to support an $11,425 charitable donation income tax deduction.

Meanwhile, from 2004 through 2007, the Markells regularly donated Ban Chiang artifacts to an unidentified museum(s) and took a charitable tax deduction, “knowing the items had been stolen from the country of Thailand.”

In their steady march toward convictions and incarceration, the U.S. Attorney's Office tapped into its experience with wildlife trafficking cases—an instructive parallel to antiquities trafficking cases. Prosecutors wrote in a sentencing pleading dated Dec 3, 2015:

There are two types of archeological resource looters: (1) the looter that digs up and collects artifacts as a hobby for his or her own personal collection; and (2) the looter that digs up artifacts for the purpose of selling them to brokers or gallery operators. As with the protection of threatened and endangered wildlife species, the key to protecting and conserving archeological resources is to eliminate markets for illicit/looted antiquities. Without the existence of brokers, middlemen, and gallery owners who are willing to knowingly and intentionally profit from sales of parts and products of threatened or endangered wildlife species or looted archeological resources, there is little monetary incentive for wildlife poachers or archeological resource looters to engage in their nefarious trades.

One might be tempted to think that the archeological resource looter squatting in the deep mud and steaming jungle highlands of Ban Chiang, Thailand is primarily to blame for the devastation of pristine archeological sites and the information lost thereby—just as one might be tempted to lay the bulk of the blame for the loss of the last Northern White Rhinoceros at the feet of the poacher who killed it; but that line of thinking is incorrect. It is individuals such as Jonathan Markell ... the importers, the buyers, and the gallery owners who purchase and acquire such archeological resources or wildlife products for profitable resale who are primarily to blame for the underlying devastation. For these are the individuals who create the markets that create the monetary incentives that drive the poachers and looters into the fields.

The government's lawyers thereby laid the groundwork to argue for a prison term, “to reflect that seriousness and to promote respect for the law and to provide just punishment for the offense."

Meanwhile, they made the important point that “[a]rcheological resources are non-renewable. The looting of archeological resources causes widespread destruction of archeological sites and results in the loss of archeological information which would be gleaned from a properly excavated site."

They informed the court as well about the enormous impact of cultural plundering on the Thai people. “Many villages throughout Southeast Asia have been deprived of the opportunity to grow an economy based on archeological tourism because their heritage and archeological resources have been devastated by looting activity to supply to the purveyors of 'stolen time,' such as defendant Jonathan Markell."

Prosecutors poignantly added, "Criminal conduct, like that committed by defendant Jonathan Markell in this case, serves to deprive individuals from other countries of their own distinctive histories and heritages—in essence stealing not just their antiquities, but their 'time and history."

Two witnesses reinforced these arguments when they testified this week at the sentencing hearing. One witness was the NPS agent who investigated the case, and the other was archaeologist Dr. Joyce White, director of the Ban Chiang Project housed at the University of Pennsylvania Museum.

Dr. White analyzed more than 10,000 artifacts, mostly from Thailand, which police obtained through Operation Antiquity, the code name used by NPS, U.S. Immigration and Customs Enforcement Homeland Security Investigations, and IRS Criminal Investigation for the Museum Raids investigation.

In a court Declaration, Dr. White made clear that antiquities exported from Thailand generally require a permit from the Thai Fine Arts Department. But, remarkably, she only saw one or two samples of antiquities where a permit actually had been obtained despite the thousands of samples examined.

Dr. White also noted that most of the artifacts were found intact, indicating that they had been illegally dug-up. “Intact artifacts are rare in archaeological sites and tend to come from human burials,” which would require “large scale excavations.”

The prison term and felony convictions imposed by Judge Pregerson this week are hoped to decrease the incentive to industrially excavate overseas archaeological sites overseas and to deter smuggling of contraband cultural property into the American marketplace.

More details about the cases can be found on Jason Felch's Chasing Aphrodite blog and at Trafficking Culture.

Photo credits: William Schenold and Kiwiodyse

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.

Fossil Smuggler Sentenced

Microraptor fossil recovered by ICE.

Fossil smuggling has been an area of law enforcement success for Homeland Security Investigations (HSI). The investigative arm of Immigration and Customs Enforcement (ICE) rarely generates heritage trafficking cases that lead to prosecutions. But court cases against Jun Yang, Eric Prokopi and John Richard Rolater have been noteworthy exceptions.

HSI's latest achievement is a plea deal concluded by the U.S. Attorney's Office in Wyoming with Charles Magovern of Boulder, Colorado, who was convicted of fossil smuggling.

Following the terms of the agreement, a federal district court last week sentenced Magovern to probation for illegally importing dinosaur specimens into the United States from China and Mongolia.

The felony information filed by Assistant United States Attorney Stuart Healy, III charged Magovern with willfully and knowingly importing paleontological material "by means of false statements and false papers, to wit, customs import declarations ... were false and fraudulent in that they did reflect as the purchase price of said merchandise a value which was less than the purchase price of said merchandise." Magovern, along with "fossil retailer" John Richard Rolater and another conspirator, "did knowingly aid and abet each other in the commission of this offense," the information further charged. The violations constituted offenses against 18 USC §§ 542 and 2.

ICE reported that the illegal imports were concealed "within legitimate cargo."

According to a press release issued by the agency, the smuggled objects included fossils dating as far back as 151 million years. They consisted of:

Anchiornis fossil recovered by ICE.

• a Chinese Sinovenator valued at approximately $70,000;
• an Anchiornis Huxley valued at approximately $100,000;
• a Protoceratops valued at approximately $250,000; and
• four Microraptors valued at approximately $38,000 to $45,000 each.

Part of the sentence included Magovern's agreement to forfeit "fossils already provided by the defendant" to ICE.

Magovern appears to have cooperated with authorities given his waiver of grand jury indictment, the quickness between the filing of the criminal complaint in July to the time of sentencing, and the actual terms of the sentence.

Photo credits: 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.

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.