Pandora Papers leak sharpens focus on art and antiquities trade, fortifies case for worldwide beneficial ownership transparency

The Pandora Papers leak of almost 12 million documents revealing hidden wealth and tax avoidance by some of the world’s rich and powerful also underlines the apparent ease with which the trade in art and antiquities has been used to launder the proceeds of stolen artefacts.

The leaked papers are also expected to fortify the global push for beneficial ownership transparency of companies worldwide, which would have a significant impact on those involved in trade-based financial crime.

US indictment

In 2019, the US indicted British art dealer Douglas Latchford of trafficking antiquities looted from countless Cambodian sacred sites. He made a tremendous amount of money from his trade and he continued to sell until as late as 2018, according to evidence obtained by the International Consortium of Investigative Journalists (ICIJ) and seen by the UK’s Guardian newspaper.

But Latchford died before the trial that would have shed light on what happened to these treasures and the money that changed hands as they were traded across the world.

Trust revelations

The Pandora Papers files obtained by the ICIJ shed some light on this mystery with the revelation of two secret offshore trusts that Latchford used to hold money and art: the Skanda and the Siva trusts.

Based in the British Crown Dependency of Jersey, the trusts were established after the US had started investigating the British art dealer.

Photographic evidence

On 30 September 2021, New York gallery owner Nancy Wiener pleaded guilty to possessing stolen property, including two pieces she bought from Latchford for more than US$1 million, knowing that they were looted.

A photograph of one of the pieces, the Naga Buddha is attributed to the Skanda Trust, and was featured in a book published by Latchford and Emma Bunker, Khmer Bronzes. US investigators say publishing a photograph of a looted antiquity is a common laundering practice.

Widespread abuse

Latchford’s family says the trusts were not designed to obscure the ownership of so many artefacts, but the ICIJ says that by relying on companies and trusts created in secrecy jurisdictions, the art dealer joined an array of figures in the art world who have employed such entities to hold assets, often while engaged in theft or fraud.

One of the most prolific traders in looted antiquities, Giacomo Medici, who operated from the 1960s into the 1990s, was convicted of using anonymous shell companies to launder stolen antiquities. He denied trafficking in looted art.

Russian oligarchs Boris and Arkady Rotenberg avoided US economic sanctions against them by using shell companies to purchase US$18 million worth of art, including a painting by Belgian surrealist René Magritte, according to a US Senate investigation (Trade-based Financial Crime,16 September 2020).

Th ICIJ’s report on Latchford’s activities can be found here.

Categories: Trade Based Financial crimes News

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