Tags: Emerging Threats | Middle East | art | modigiliani | nahmad | nazi | nazis

Panama Papers Reveal Stolen Art

Wednesday, 01 June 2016 10:50 AM Current | Bio | Archive

Since my Newsmax April 25 article on the Panama Papers, there has been a major upheaval among the super-rich concerning where they can continue their secretive practices surrounding laundering of funds, and not declaring high-priced assets and sales.

As I wrote on Dec. 26, 2015 for Newmax in, "Swiss Crackdown on Illegal Freeport Holdings," very rich businessmen, thieves, dictators, and money launderers may have to pay billions in fines and taxes or spend time in prison, if all freeport holdings are scrutinized.

Thus they are scrambling to find other ways of hiding merchandise, collections and cash.

For decades, many of us have wondered if major items that were stolen from collections worldwide have been harbored in bubble wrap and crates in free ports with bogus identifications. It's possible that world treasures like the $250 million worth of art stolen from the Isabella Stewart Gardner Museum in Boston could be stashed away in a free port.

And unless every box is opened and identified, stolen art will remain undetected.

Fortunately, the Panama Papers revealed information about some stolen art.

After investigators read and analyzed the papers, thousands of black market dealers and collectors fretted that their financial secrets might be unveiled.

When Geneva prosecutors recently found a stolen painting in a freeport by Amedeo Modigliani titled "Seated Man with a Cane," (1918) — listed as Nazi war loot — free port customers from Maryland to Switzerland panicked.

They don't want anyone to know what they stashed away. Allegedly, the Modigliani has been hidden for decades by the Nahmad family, who acquired it in 1996. Now, hundreds of shady dealers and collectors are rushing to move their assets to other so-called "safe havens" before they have to prove ownership. But most have nowhere to go.

With banks and questionable wealth management firms helping illegal offshore dealings run smoothly for billionaires, politicians, moguls, judges, aristocrats and super-stars, the political and financial worlds of Ponzi-schemers and cheats has had little disruption over the past 40 years. Russia, China, the U.S., Great Britain, Azerbaijan, Pakistan, Canada, Thailand, Mongolia — and more — have allowed covert companies, false documentation and unmarked bank accounts to go unobserved.

Allegedly, hundreds of powerful people were paid handsomely for this kind of treatment.

Now, the global elite's secret cash havens are in the headlines and because they may never be able to harbor illegally multimillion dollar assets, the art world worries that the hot Modern market‹where prices are in the multi-millions‹may collapse.

On April 5, during a White House briefing on the economy, President Obama said, "When politicians perpetuate a system that favors the wealthy at the expense of the middle class, it’s not surprising that people feel like they can’t get ahead. It’s not surprising that oftentimes it may produce a politics that is directed at that frustration. Rather than doubling down on policies that let a few big corporations or the wealthiest among us play by their own rules, we should keep building an economy where everybody has a fair shot and everybody plays by the same rules."

U.S. Uncut stated that Obama focused on inversion — a corporate tax loophole companies exploit to avoid paying U.S. taxes. Under inversion, an American company acquires a foreign competitor, then re-registers in the home country or territory of that competitor to get around American tax laws. New rules enacted by the Treasury Department will put a cap on new foreign acquisitions of U.S. assets to skirt ownership requirements for potential inversions in the future.

Obama is concerned about the widespread problems related to tax evasion, money laundering and sanctions violations revealed in the Panama Papers.

He said, "We've had another reminder in this big dump of data coming out of Panama that tax avoidance is a big, global problem. It's not unique to other countries, laws are so poorly designed.Corporations who can afford the accountants and lawyers to arrange the tax deals are "gaming the system."

So, why not do something about it?

Shell companies are a major part of the problem. A bogus shell company is where people put money and assets that can't be traced to the owner. It allows a person to move or hold cash and other assets under a corporate name without international law enforcement or tax authorities knowing about who really owns it.

With the help of crooked, crony accountants, lawyers and bankers, obscurity (not transparency) has been the name of the game and dirty or stolen money has been made "clean" so it can be laundered.

Unfortunately, a lot of the cash that is laundered goes directly to terrorist group. In May, 2010, Khalid Ouazzani plead guilty for using a Kansas City, Mo., firm called Truman Used Auto Parts to move funds to al-Qaida.

Panama has been a banking center for decades and by it became a tax and money-laundering shelter when it passed rules in the 1970s promising foreign investors financial secrecy and no transparency.

This encouraged criminals, from dictators to terrorists, to plant assets in Panama. Manuel Noriega (commander of the Panama Defense Forces) nationalized money-laundering practices and partnered with the Medellin drug cartel, giving it free reign to do as it pleased.

Billions of dollars of drug money has been dumped in freeport warehouses where no one has had to be accountable.

Plagued with fraud and international tax evasion, hundreds of Panamian law firms will open a shell company with no questions asked. Due to that, it's easy for criminals to go unpunished. lt's estimated that more than $1 trillion is hidden in free ports by Americans, giving the U.S. a $100 billion loss in tax revenues annually.

Thankfully, all of this is being revealed and hopefully some of the culprits will brought to justice.

Patricia Jobe Pierce is a freelance writer, art historian, art dealer-consultant, certified AAA appraiser, public speaker, photographer and American art authenticator for museums, auction houses and collectors. She graduated from Boston University with a BFA in 1965, is owner and director of Pierce Galleries, Inc. in Nantucket and Hingham, Mass., and is author of many works, including, "Art Collecting & Investing: The Inner Workings and the Underbelly of the Art World." For more of her submissions, Click Here Now.

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For decades, many have wondered if major items that were stolen from collections worldwide have been harbored in bubble wrap and crates in free ports with bogus identifications. Unless every box is opened and identified, stolen art will remain undetected.
art, modigiliani, nahmad, nazi, nazis
Wednesday, 01 June 2016 10:50 AM
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