Tags: Middle East | Art | Panama | Papers

'Panama Papers' Reveal Black Market Art Trade

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Monday, 25 Apr 2016 12:19 PM Current | Bio | Archive

In 2015, an anonymous “John Doe” gave the German newspaper Süddeutsche Zeitung piles of documents that exposed alleged international thievery, blackmail, fraud, bribery, and other crimes conducted by many world leaders, politicians, celebrities, and moguls.

The data in the "Panama Papers” contains 11.4 million documents; so the newspaper gave The International Consortium of Investigative Journalists the papers to analyze and study.

The papers exposed hundreds of shell companies with offshore holdings that were allegedly used to circulate and hide assets that were bought and sold secretly — like art masterworks, cash, gold, jewels, black market diamond trades, weapons — and more.

The documents came from the Mossack Fonseca law firm based in Panama and its 38 branches worldwide. The data reveals the clever owners of bank accounts and companies in 21 offshore jurisdictions, from the British Virgin Islands, to Singapore, to Miami, and Nevada.

Many of the accounts robbed retirement fund death benefit pools, victimizing thousands of workers worldwide.

In Indonesia, small investors claim a company incorporated by Mossack Fonseca in the British Virgin Islands was used to scam 3,500 people out of at least $150 million.

And that’s just the tip of the iceberg.

For decades, staffs of hoity-toity lawyers worked their magic to conceal criminal enterprises, tax evasion, and political corruption for world leaders, politicians, movie and rock stars, business moguls, and public officials.

These secrecy experts used anonymous trusts, companies, and made-up individuals and documents to create complex structures that disguised the origins of dirty money.

Since 1977, they have gotten away with overt fraud, robbery, weapons dealing, and more; because officials were either in on the deals or were paid to look the other way, alter documents, and remain silent.

It’s big business and most of their transactions were illegal.

Under the cloak of secrecy, offshore companies allegedly were controlled by over 128 powerful, wealthy individuals, including the prime ministers of Iceland and Pakistan; the children of the president of Azerbaijan (who are mega art collectors), King Salman of Saudi Arabia, King Mohammed VI of Morocco; and those doing business with Mexican drug lords, Hezbollah, North Korea and Iran — all blacklisted by the U.S. government because of their international crimes and links to terrorism.

It’s not surprising that politicians and world leaders from many countries will do anything to retain wealth and influence. China’s Xi Jinping, Ukrainian President Petro Poroshenko, and others, sponsored anti-corruption and tax haven reform, and publicly rallied against crime and money laundering; while at the same time they were purportedly draining national treasuries and hiding billions in over 214,000 offshore companies — and over 500 banks.

It is alleged that the prime minister of Iceland placed millions of dollars of Icelandic bonds in an offshore shell company.

The list of the corrupted is mind-boggling.

Exceedingly wealthy or powerful individuals often look for havens to keep secret, or bury huge amounts of, cash and — with the help of banking insiders, accountants, lawyers, and middle-men—the art world became one convenient place to screen assets.

On April 16, NPR News reported that the Victor and Sally Ganz 1997 groundbreaking Christie’s auction featuring Pablo Picasso’s Women of Algiers started the rapid surge in soaring prices for top paintings and “launched the skyrocketing prices for modern art.”

People wondered where all the money was coming from. NPR noticed “a global industry of law firms and big banks sells financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars.”

Ponzi schemers and drug lords dispose of hundreds of millions of dollars in cash and with offshore shell companies they easily launder money through auctions.

A good reference on this subject is Gabriel Zucman’s "The Hidden Wealth of Nations: The Scourge of Tax Havens.”

In February 2015, lawsuits were filed charging the Mossack Fonseca law firm with money laundering and bribery.

With more suits pending a lot of heads, no doubt, will roll!

The Guardian reported on April 19 that the U.S. government is investigating the Panama Papers involving the shadowy behavior of many Fortune 500 companies that tax evaded trillions of dollars. “The inquiry comes after Barack Obama described the revelations from the leaks — which have caused political tumult across the world — 'important stuff’ and global tax avoidance as a ‘huge problem.’"  negatively effecting the world economy.

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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Ponzi schemers and drug lords dispose of hundreds of millions of dollars in cash and with offshore shell companies they easily launder money through auctions.
Art, Panama, Papers
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2016-19-25
Monday, 25 Apr 2016 12:19 PM
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