How does money laundering work in the commercial art world?

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How do people use the commercial art to launder money?

For context, I work in commercial galleries and it’s something I’m trying to understand to work in a safer way with collectors. Thanks!

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9 Answers

Anonymous 0 Comments

Let’s say I’m a criminal of some sort looking to launder my money. All I have to do is find someone who could credibly invest in art, slide them my dirty money under the table and then have them buy a piece of artwork from me. The art transaction is entirely above board, so now my formerly dirty money is ‘clean’ – it can be traced to that art transaction.

The reason you use art is that the value is highly subjective and involves easily transported goods of high value. You could do the same thing with lumber, but you’d need trainloads full of the stuff and governments would find it highly suspicious if you paid many times the commodity value for lumber.

Anonymous 0 Comments

say you got $100,000 through illegal means. you cant just put it in the bank, or the government will notice.

so instead, you make 100 paintings. your art is practically worthless, so you sell them for $10 each in cash, but then on your taxes you lie and say you sold them for $1,000 each. These smaller transactions won’t be noticed, and it provides a plausible source for the money.

Anonymous 0 Comments

Art has fluid value… and price is different to everyone. So you can move money through the art world by over inflating some art value by simply paying more for it without actually paying more for it.

Anonymous 0 Comments

Lots of people already covered the how but if you want to learn more the book “The 12 Million Dollar Stuffed Shark” is really depressingly good. Should be required reading for first year art majors

Anonymous 0 Comments

They donate maximum amount to their favorite politician allowed by law then buy paintings by said politicians SO or kids.

Or

Someone owes Vinny money so they buy a painting from Vinny for the amount they owe Vinny.

Then they get an appraiser to value it at a high price and loan it to a museum.

The biggest one is layering. They “layer” through a series of buying and selling high pieces to disguise the origins of the money and make it clean. This should’ve been apart of your AML training.

Anonymous 0 Comments

You work at a gallery but your along this question to a bunch of random internet people, instead of your collegues…

Anonymous 0 Comments

Many famous works of art –including even the Mona Lisa– have been stolen, and then languish on the black market with no legitimate buyers. As an agent for a commercial gallery, you would not want to be involved in finding some cash for such a piece, unless you are cooperating with law enforcement to recover it. https://en.wikipedia.org/wiki/List_of_stolen_paintings

Anonymous 0 Comments

Art value is very subjective, especially for newer artists or seldom traded ones. You could have your grandma paint a bunch of stuff, market it under a fictitious name as a new up and comer, and people could pay you a bunch of cash for what is essentially worthless.

Anonymous 0 Comments

eli5 version:

Say I have $20 in monopoly money, I buy a $20 giftcard and they think it’s real money. Now the store has $20 in monopoly money and I have a $20 giftcard. Well, let’s say I have a 20 MILLION DOLLAR Monopoly money and I use it to buy a really expensive painting. They think it’s real money and now I have a $20 million dollar painting.

non eli5 version:

It’s the same principle as above, just gets convoluted on how you get money to the parties laundering.

High end art, high end real estate, and casinos are the best ways to launder LARGE amounts of money quickly.

Small scale money laundering. You know that kiosk in the mall with the dude asleep, that “repairs cellphones” yeah… mostly likely laundering money. At the end of the day that guy marks down he did 20 repairs at $100 each. All labor, no inventory, boom. That store just laundered $2,000 in a day. Or $7 million a year.

it’s likely the guy who “owns” that store would be the dude buying the art, the real estate, or washing through a casino.

So let’s say that guy buys a $7 million dollar painting, he can then “gift” it to a friend, and that friend can then give him, I dunno… $5 million worth of cocaine.