Due Diligence: INTERPOL's "Most Wanted" Stolen Tapestry Found in Auction Catalog, Seized by Feds

Increasingly commoditized and always discreet, today's art market perilously tempts the black market. Reforms are needed to shine a light on the trade. For now, the marketplace must remain vigilant against money launderers, terrorist financiers, and fences who peddle hot art in the cool stream of legitimate commerce.

Steering clear of stolen art requires due diligence. That means that dealers, auction houses, collectors, and associated parties actually must do the investigative diligence required so that they are not directly or indirectly aiding criminal activity. Because the art market is opaque, diligence is needed to discover an object's true chain of custody, transfer, and ownership.

The latest court case demonstrating the need for due diligence is United States v. The Tapestry Known as "The Ambassadors of Rome Offering the Throne to Numa Pomplio."

Before the tapestry surfaced last year in Bonhams' Fine American and European Furniture, Silver Folk and Decorative Arts and Clocks auction, it debuted in 2007 on INTERPOL's "Most Wanted Works of  Art" list. The auction house apparently did not discover this information before it published the piece in its sales catalog.


Bonhams richly characterized the silk and wool textile as "[a]n important Flemish historical tapestry," and suggested that it was part of the "[t]he complete set of the Life of Numa Pompilius," which can be "attributed with certainty to the painter Abraham van Diepenbeeck (1596-1675)." Auction house writers were less descriptive about the ownership history, enigmatically chronicling the chain of title with the nondescript phrase, "Property of various owners."

Prosecutors in the southern district of New York articulated a more complete description of ownership. In a forfeiture complaint filed with the federal district court in Manhattan in May, they declared that it had been stolen--along with a second tapestry--from the home of an identified man in Satiago in October 2006. Chilean investigators reported the theft to INTERPOL, and the international police agency posted the tapestry to its Stolen Works of Art Database under registration number 2007/2882-1.1. 

The United States Attorney in Manhattan wanted the stolen tapestry back to return it to the owner, so his office commenced a civil action to seize the tapestry and forfeit its title to the U.S. government. The legal pleading, verified by the FBI agent working on the case, provided sharp details surrounding the consignment and offer for sale of the tapestry, known formally as the Defendant in Rem:

On or about September 27, 2013, a private art dealer (the "Dealer"), a resident of Santiago, Chile, contacted Bonhams New York Gallery located at 580 Madison Avenue, New York, New York ("Bonhams") via email and inquired into selling the Defendant in Rem at Bonhams.  The email included a color photograph of the Defendant in Rem. 

On or about October 3, 2013, a representative from Bonhams replied to the Dealer's email and advised that Bonhams would be willing to sell the Defendant in Rem at auction with an estimated appraised value between $30,000 to $50,000. 

On or about October 7, 2013, the Dealer agreed to consign the Defendant in Rem to Bonhams in order to be sold at auction on January 23, 2014. 

On or about October 10, 2013, the Dealer mailed the, Defendant in Rem from Santiago, Chile to Bonhams' New York Gallery via DHL Express. On a DHL commercial invoice, the Dealer declared that he was exporting a "carpet" with an approximate value of "$700." 

On or about January 2, 2014, the Dealer executed a consignment agreement with Bonhams under which the Dealer consigned the Defendant in Rem to Bonhams for sale at auction. The Defendant in Rem was included as Lot 1201 in the auction catalogue (the "Catalogue") .... 

On or about January 10, 2014, Bonhams' representative emailed the Dealer advising him that they had received a request for information as to the Defendant in Rem's provenance. 

On or about January 13, 2014, the Dealer responded to Bonhams' January 10, 2014, email stating, in sum and substance, that he purchased the Defendant in Rem from an art dealer in Santiago, Chile in approximately March 2002. 

On or about February 19, 2014, agents of INTERPOL questioned the Dealer in Santiago, Chile regarding his ownership and provenance of the Defendant in Rem. In response to these inquiries the Dealer stated, in substance and in part, and in contravention of his email to Bonhams, that he had purchased the Defendant in Rem in late 2006 or early 2007 from two individuals in Santiago, Chile. The Dealer claimed that he could not state the names of either individual and that he no longer had any documentation regarding these individuals or this transaction in his possession.

The U.S. Attorney's Office accused the dealer of having "knowingly imported the Defendant in Rem into the United States knowing that it had been stolen, converted, or taken by fraud, and facilitated the transportation, concealment, or sale of the Defendant in Rem, knowing the same to have been imported or brought into the United States contrary to law."

The forfeiture pleading alleged violations of 18 U.S.C. § 545 (fraudulent importation of merchandise into the United States), § 2314 (interstate and foreign transport of stolen merchandise), § 2315 (concealment, storage, and sale of stolen property), and/or 19 U.S.C. § 1595a (introduction of merchandise contrary to law).

With the assent of prosecutors, the district court on September 8 ordered the release of the tapestry to the true owner. Today the case serves as another reminder of why conducting a meaningful due diligence investigation into an artwork offered for sale is vital.

Photo credit: Verified complaint, U.S. Attorney for the Southern District of New York

Text copyrighted 2015 by Cultural Heritage Lawyer, a blog commenting on matters of cultural property law, cultural heritage policy, art law, 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 project of Red Arch Cultural Heritage Law & Policy Research, Inc.

U.N. Report: Destruction of Heritage Flagged as Risk Factor Related to Atrocity Crimes

The destruction of objects of cultural or religious heritage is a signature feature of  genocide, crimes against humanity, and war crimes. That is the assessment offered by a recent United Nations report examining, what are collectively called, atrocity crimes.

Published by The Office of the Special Adviser on the Prevention of Genocide, Framework of Analysis for Atrocity Crimes: A Tool for Prevention describes risk factors associated with grave criminal conduct directed toward specific groups, civilians, and legally protected populations.

Several threats to cultural and religious heritage are listed by the report "that point to the likelihood that certain actors are taking steps towards a scenario of mass violence and possibly atrocity crimes." The risk factors include:

• The "[d]estruction or plundering of ... property related to cultural and religious identity;"
• "Attacks against or destruction of ... cultural or religious symbols and property;
• "Signs of patterns of violence against civilian populations, or against members of an identifiable group, their property, livelihoods and cultural or religious symbols;" and
• "Threats or appropriation, seizure, pillaging or intentional destruction or damage of ... property that belong, represent or are part of the cultural, social or religious identity of those protected under international humanitarian law, unless used for military purposes."

The report should prompt collectors of cultural property, who fail to use rigorous due diligence when purchasing objects, to carefully evaluate how their acquisitions of conflict antiquities or wartime looted art contribute to atrocity crimes.

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.

A Healthy Trade, A Black Market Temptation: Latest Figures Show U.S. Leadership in Art and Antiquities Exports and Imports

The latest trade figures show that the United States is the leading exporter and importer of fine art, antiquities, and other cultural goods. Dealers and consumers are thriving in this robust marketplace where billions of dollars are exchanged annually. Yet the market remains susceptible to criminal penetration.

American international trade in fine art and antiquities is very large. UN Comtrade and U.S. International Trade Commission (ITC) data reveal that America imported over $9 billion in art, collectors’ pieces, and antiques last year. It also exported the same types of goods in 2013—classified by Harmonized Tariff Schedule (HTS) 97—in an amount valued at $7.7 billion, crowning America as the global leader in both exports and imports of art and cultural heritage material by monetary value.

To put these cash amounts into perspective, $9 billion could purchase a fleet of 35 Boeing 747 aircraft or buy 530,000 Ford Focus automobiles.

The U.S. was also a top country in 2013 for imports and exports of HTS 9705 goods, an important subcategory of HTS 97 that includes collections and collectors' pieces of zoological, botanical, mineralogical, anatomical, historical, archeological, paleontological, ethnographic or numismatic interest. America was the second highest importer by value, bringing in roughly $263 million worth of HTS 9705 commodities from around the world. The U.S., in turn, exported nearly $192 million in HTS 9705 material, taking the third-place spot among nations.

This large and healthy trade in art and antiquities can be tempting to the black market because money laundering, smuggling, and fencing stolen objects are more easily disguised when smaller drops of dirty cash and contraband get lost in a vast ocean of legal commerce. In fact, the 2012 Basel Art Trade Guidelines cautioned that the market “faces a higher risk of exposure to dubious trade practices ... due to the volume of illegal or legally questionable transactions, which is noticeably higher in this sector than in other globally active markets.”

Organized crime can over-value or under-value invoices to disguise money transfers, a practice called trade based money laundering. Smugglers can create shell import and export companies to hide the origins and transfers of illegally trafficked cultural goods. And many other techniques can be used to hide criminal conduct that piggybacks on legitimate trade. Such methods may explain why $6.8 billion in art and antiquities shipped between the United Kingdom and the United States over the last five years remains missing.

To peel away the black market that camouflages crimes of trafficking, money laundering, and possibly terrorist financing requires rigorous initiatives that will shore up vulnerabilities existing within the broader white market. Industry transparency and due diligence are critical elements to any defense. Moreover, intensified law enforcement efforts directed at investigating and prosecuting cultural heritage trafficking and money laundering must be supported.

Photo credit: Jon Syverson

Copyright note: Although the data presented here is sourced from publicly available information, it has been carefully selected, coordinated, arranged, and analyzed so that it is subject to copyright as a compilation by CHL. The publication, retransmission, or broadcast of this compiled data is strictly prohibited without CHL's express consent.

By Rick St. Hilaire Text copyrighted 2014 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.

Another Due Diligence Lesson as Becchina Archive Produces U.S. Court Forfeiture of Antiquities from Italy

Yesterday’s order of forfeiture in the case of United States v. One Attic Red-Figure Skyphos and One Apulian Red-Figure Bell Krater provides another example of why dealers and collectors must exercise stringent due diligence when acquiring antiquities.

The case involved the seizure and forfeiture of the two archaeological objects that were alleged to have been the fruits of the Gianfranco Becchina antiquities trafficking ring. The forfeiture order issued by the federal district court in northern New York resulted from a stipulation between American and Italian authorities to turn over the archaeological material to the Italian people

The U.S. Attorney in Albany filed a seizure and forfeiture complaint this past April when information from Customs and Border Protection (CBP), Homeland Security Investigations (HSI), and the Italian Carabinieri Command for the Protection of Cultural Heritage (TPC) revealed that the two antiquities, valued at $55,000 in total, entered America’s border illegally. They were bound from Canada to Christie’s auction house in New York City.

American officials seized the objects from Walter M. Banko Enterprises, Ltd. Of Montreal on grounds that they were stolen, smuggled, and clandestinely imported merchandise brought into the U.S. contrary to law pursuant to 19 U.S.C. § 1595a(c)(1)(A). They were first seized in 2011 after the TPC notified HSI that the objects had been taken unlawfully from Italy.

Federal prosecutors alleged in their complaint for forfeiture that false statements were used to illegally import the antiquities into New York.  They also contended that the artifacts were stolen from Italy and referenced Italian statutes asserting title to the pieces, specifically Italian Law number 364 of 1909 governing the ownership and export of any “unmovable or movable items that have a historic, archaeological, paleontological or artistic interest” and Italian Law number 1089 of 1939 covering “moveable and immoveable property with artistic, historic, archeological or ethnographic value.”

Banko made no legal claim to the items in federal district court for the Northern District of New York. Italy did, however, so that the nation could reclaim the looted artifacts.

The prosecutors claimed that convicted antiquities trafficker Becchinahad possession of the skyphos and krater. The lawyers wrote in court papers, “Banko falsely claims on the documentation provided at the time of importation to the United States that the Skyphos was acquired from the Swiss collection of Dr. Elie Borowski in Basel in 1968, adding “Becchina’s warehouse and gallery contained images of the Skyphos and documents referencing the Skyphos dated from 1982….”

Prosecutors further argued in their court complaint that the krater appeared in the Becchina archive, a dossier retrieved in 2001 by Swiss law enforcement officials containing thousands of records and Polaroids cataloging looted antiquities.

The wine vessel was not from any authorized Italian archaeological excavation, the federal lawyers wrote. “In the documents provided by Banko to HSI, Banko indicated that the Krater was acquired in the 1960s from the personal collection of Andre Matton. [Yet] Becchina’s warehouse and gallery contained images of the Krater and documents referencing the Krater dated from 1992….” The attorneys added in some detail,

Documents recovered from the search of Becchina’s gallery and warehouse reveal the occurrence of the following events: in February of 1992, Becchina purchased the Krater, in fragments, from Raffaele Monticelli. On or about October 24, 1992, Becchina delivered the Krater to Ettore Bruno who was to restore the Krater. On or about July 15, 1993, Ettore Bruno sent a photograph of the restored Krater to Becchina. On or about August 10, 1993, Robert Guy answered Becchina regarding the Krater’s attribution and the scientific study of the Krater. Ettore Bruno returned the Krater to Becchina in March of 1994. Becchina paid 8,490 Swiss francs for the restoration of the Krater. On May 1, 1994, Bechina noted that the Krater was then located in his warehouse at Porto Franco di Basilea (Switzerland). 

An export certificate issued by the Ministry of French Culture accompanied the Krater during its exportation from France into Canada on March 10, 2011. The certificate makes no reference to the origin of the Krater and does not provide documentation supporting the Krater’s origins. 

Nowhere on Banko’s shipping documents does Banko say that either of the two defendant properties was acquired from or ever owned by Becchina.

Dealers and collectors should continue to be on the lookout for any other objects linked to the Becchina archive by getting meaningful answers to two basic due diligence questions:

Where did this object come from?

How and when did it get to the United States?

Photo credit: Jason Morrison.

Hat tip: Gary Nurkin

By Rick St. Hilaire Text copyrighted 2010-2014 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of this post without the express written consent of CHL is prohibited.

Dinosaur Cases Offer Due Diligence Lesson

Cultural property attorneys should inform their dealer and collector clients that due diligence and a transparent marketplace are necessary to steer clear of contraband heritage that is offered for sale. That is an important lesson taught by the cases of U.S. v. Eric Prokopi and United States v. One Tyrannosaurus Bataar Skeleton.

The companion cases involved the criminal prosecution of Prokopi for fossil smuggling and the seizure and forfeiture of dinosaur bones. They allowed Manhattan’s top federal attorney on Thursday to repatriatean astonishing 18 trafficked dinosaur skeletons to the Mongolian people.

Prokopi’s cooperation helped to wrap up a two-year law enforcement investigation into fossil trafficking networks, which stripped irreplaceable paleontological evidence from the Gobi Desert and inserted black market fossils into the stream of legitimate commerce.

Some of the paleontological material returned to Mongolia
by U.S. officials last week. Courtesy ICE

The items returned included the bones of two Tyrannosaurus bataars. Federal officials repatriated another virtually complete Tyrannosaurus bataar last year following Prokopi’s 2012 guilty plea to conspiracy, unlawful import of goods by means of false statements, and transportation of goods converted and taken by fraud.

The cases remind observers that even though a seller may claim to offer artifacts legally, that does not necessarily mean the goods are legitimate. They must be checked out.

To discover the truth about whether artifacts have been stolen, illegally exported, or smuggled requires buyers and the marketplace as a whole to ask pointed questions and to demand credible documentation. That is why finding out where cultural objects originated from and obtaining their shipping and import documents must be an important function of cultural property attorneys who advise dealers and collectors about due diligence. To counsel clients otherwise may be unwise.

For example, Prokopi’s lawyers in the federal forfeiture case told the court in 2012 that government officials and “a media campaign stirred up by academic paleontologists” combined to unjustly target their small business clients. The attorneys, who regularly represent the interests of ancient coin dealers and collectors, wrotein pleadings filed with the court that the “commercial paleontologist” properly bought fossil bones on the open market, devoted time and expense to restoring and mounting the bones and, for this trouble, was unfairly targeted by the justice system.

They raised claimssimilar to those used to bolster the undocumented transnational trade of ancient coin artifacts:

• The dinosaur bones were not stolen.
• U.S. officials failed to publish proper country of origin and valuation rules for fossils.
• The bones could not be proven to have actually originated from Mongolia.
• It could not be proven that the bones were taken without the Mongolian government’s permission.
• Mongolian law was ambiguous and unenforced.

Despite the arguments, the cases resulted in the production of information verifying that the fossils were in fact stolen, smuggled, and bound for the highest bidders, presumably to be bought by individuals who would not ask where the objects came from or how they made their way to the market. That prompted Homeland Security Investigation’s Special Agent-in-Charge James Hayes, Jr., to issue a statement last week warning that “HSI will not allow the illicit greed of some to trump the cultural history of an entire nation.”

Cultural property lawyers can help dealers and collectors avoid entanglements with heritage traffickers and their illegal goods by promoting strict due diligence practices to investigate the origins and transportation of cultural artifacts. Attorneys can also take the lead to protect cultural heritage by supporting legislative reforms that would shine a spotlight on the black trade. This would be a significant step in the right direction now that the fossil smuggling cases in New York have come to a successful conclusion.

By Rick St. Hilaire Text copyrighted 2010-2014 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of this post without the express written consent of CHL is prohibited.

ABC Radio Australia and Other News Reports on Cambodian Statue's Repatriation

Credit: Ante Vecik

Last week's agreement between the U.S. government and Sotheby's auction house to repatriate a 10th century sandstone sculpture continues to be widely publicized.

Chasing Aphrodite has a recent informative report, which supplies commentary by cultural property experts Tess Davis and Simon MacKenzie. The Phnom Phen Post, meanwhile, provides an update on repatriation plans for the statue. And readers should take note of Tom Mashberg's and Ralph Blumenthal's original news breaking article in The New York Times.

CHL provided commentary on the federal district court case to ABC Radio Australia yesterday. Listen to the broadcast by ABC's Liam Cochrane by clicking here: Sotherby's agrees to return 10th century statue to Cambodia | Asia Pacific | ABC Radio Australia

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2010-2013 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT INFORMATION: www.culturalheritagelawyer.com