The art world has a money laundering problem
Rotenbergs suspected of evading sanctions through deals with art objects
Senate calls to remove &# 171; veil of secrecy&# 187; allowing the art market to become a platform for money laundering
Russian oligarchs bypassed US sanctions with dubious deals in high-end art.
This is stated in a published Congressional report urging lawmakers to rein in an unregulated industry popular with money launderers..
The secrecy surrounding the art world, where shoppers often remain anonymous, has allowed President Vladimir Putin’s billionaire friends to gain access to the American economy even after US sanctions were imposed on them following Russia’s 2014 annexation of Crimea, the report said..
Investigators tracked art deals made through shell companies linked to Arkady and Boris Rotenberg, close associates of Putin who, according to American officials, benefited financially from the annexation of Crimea..
In total, shell companies associated with these oligarchs have funneled at least $ 91 million through the U.S. financial system since the sanctions were imposed, according to a report from the Senate Permanent Subcommittee of Investigations..
“It is alarming and completely unacceptable that common sense norms against money laundering and terrorist financing do not apply when someone purchases a multi-million dollar work of art,” said Senator Tom Carper, lead Democrat on the subcommittee..
Republican Senator Rob Portman said he supports legislation to lift the “veil of secrecy” that has made art trade a favored vehicle for money laundering.
The Rotenbergs could not be reached for comment. They have been under US sanctions since March 2014 for their close ties to Putin..
Arkady Rotenberg is a childhood friend of Putin and his former judo sparring partner. His companies have won multi-billion dollar contracts to build roads in Sochi, which hosted the 2014 Winter Olympics..
Congressional Report Names Nine BVI Front Companies Associated with Rothenbergs.
The document notes that Gregory Balzer, an American citizen and art consultant who lives in Moscow and “does not plan to return to the United States,” was the intermediary in the Rothenbergs’ deals with art objects..
Balzer’s attorney sent a letter to a subcommittee of Congress denying accusations that he did business with the Rothenbergs.