Friday, December 28, 2012

"The court denies the petition for rehearing en banc."  That was the order of the Fourth Circuit Court of Appeals on December 18 in the case of Ancient Coin Collectors Guild v. U.S. Customs and Border Protection; U.S. Department of State; Assistant Secretary of State, Educational and Cultural Affairs.

The ACCG set up a test case in 2009 to challenge import restrictions covering ancient Chinese and Cypriot coins.  The import controls were enacted pursuant to the Convention on Cultural Property Implementation Act (CPIA).  The Guild failed to win its case in federal district court in 2011 and appealed.  The federal appeals court thereafter struck down the ACCG's challenge in October.  The ACCG, in response, filed a petition in November for a rehearing on the matter.  The appellate court denied the request, and on Tuesday issued a mandate to effect its October 22 ruling.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Eric Prokopi pleaded guilty on Thursday in a case involving the smuggling of dinosaur fossils.  In a press release, Preet Bharara, the U.S. States Attorney for the Southern District of New York, announced:

U.S. Attorney Preet Bharara
PROKOPI, 38, pled guilty today to an Information charging him with one count of conspiracy with respect to the Chinese flying dinosaur, one count of entry of goods by means of false statements with respect to the Mongolian dinosaurs, and one count of interstate and foreign transportation of goods converted and taken by fraud. ... In addition, PROKOPI has agreed to forfeit the proceeds of his offense, including but not limited to, the First Bataar, the Second Bataar, any and all interest in the Tyrannosaurus skeleton believed to be in Great Britain, the Saurolophus and Oviraptor skeletons that had been in PROKOPI’S custody, and any and all other fossil parts of Mongolian origin that PROKOPI brought into the country between 2010 and 2012."

Federal authorities arrested Prokopi after the government's initial forfeiture case intensified in October.  Readers will recall that federal prosecutors first filed a forfeiture complaint in June seeking the return of Tyrannosaurus Bataar bones that were auctioned for sale.  Yesterday's resolution in the criminal case also resolves the civil forfeiture case.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Wednesday, December 26, 2012

As 2012 comes to a close, a case concluded in the Central District of California this year is important to highlight.  It is the federal district court matter of United States v. Perez (07-CR-499 C.D.Ca. 2007), prosecuted by U.S. Attorney AndrĂ© Birotte, Jr.'s office.

Source: U.S. Attorney's Office, C.D.CA
The case confirms that the federal anti-smuggling statute, 18 U.S.C. 545, can punish cultural property smugglers who illegally import archaeological or ethnological material in violation of the Convention on Cultural Property Implementation Act (CPIA).

It has been suggested over the years that a person who violates the CPIA’s cultural property import restrictions faces the civil remedy of seizure of the cultural object but not criminal prosecution.  So if a person smuggles an archaeological object into the United States from Cyprus, for example—a country that has a bilateral agreement with the U.S. under the CPIA—the smuggler cannot be indicted or go to prison, according to this argument.  Only the smuggled artifact can be taken away.  I believe that this interpretation of law is incorrect.

In a paper presented to the International Council of Museums Conservation Committee in 2007 and referenced by Patty Gerstenblith, “Controlling the International Market in Antiquities: Reducing the Harm, Preserving the Past,” 8Chicago Journal of International Law169 (2007), I stated that the CPIA’s “civil remedy of forfeiting an unlawfully imported object is arguably complemented by the smuggling statute’s criminal remedy of prosecuting the perpetrator. That is because the federal anti-smuggling law declares that a person is subject to criminal prosecution when he fraudulently or knowingly imports an item ‘contrary to law.’”  This argument, that an individual can face conviction for smuggling as a result of violating the CPIA's import restrictions is supported by the conviction in the Perez case.

In that case, federal officials discovered that Robert Perez was selling pre-Columbian and pre-Hispanic pots imported illegally into the United States from El Salvador.  The U.S. has import restrictions on cultural property from El Salvador as a result of a bilateral agreement with that nation, authorized by the CPIA.  The grand jury indicted Perez on one count of smuggling under 18 U.S.C. 545, charging the following:

“On or about December 11, 2002, in Orange County, within the Central District of California, defendant ROBERT PEREZ did fraudulently and knowingly sell merchandise, namely, one melon-shaped, pre-Hispanic ceramic bowl, after the merchandise's importation into the United States, knowing said merchandise had been imported into the United States contrary to law. Specifically, on said date, defendant PEREZ knowingly sold said ceramic bowl knowing that it was a pre-Hispanic archeological material that had been imported into the United States from El Salvador contrary to law, namely, without first obtaining a valid export certificate from the country of El Salvador, in violation of [the CPIA] Title 19, United States Code, Section 2606(a).”

The case concluded with a plea agreement in January 2012, supporting the opinion that the CPIA's import restrictions on cultural property may be enforced by federal criminal statutes.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Friday, December 21, 2012

Earlier this week, Holyland Numismatics coin dealer Salem Alshdaifat signaled his intention to plead guilty to one charge of accessory after the fact in the case of U.S. v. Khouli et al.  The reduced offense is a class B misdemeanor under 18 USC 1018, subject to a maximum punishment of six months incarceration and a fine of $5000.

A federal grand jury sitting in the Eastern District of New York originally indicted Alshdaifat in May 2011 with conspiracy to smuggle.  The indictment alleged that he directed Mousa Khouli to wire $20,000 to Ayman Ramadan’s bank account.  It also alleged that Alshdaifat received an airway bill from Ramadan incorrectly showing that “wooden panels” were shipped by Ramadan’s company in the United Arab Emirates to JFK airport in New York.  Alshdaifat was also charged with money laundering conspiracy, smuggling goods into the United States, and fraudulent importation and transportation of goods.  The indictment described the goods as an Egyptian inner coffin, Egyptian funerary boats and limestone figures, and a portion of an outer lid of a nesting Egyptian coffin set.  

A grand jury indictment is simply a mechanism that initiates a criminal case; it is not a finding of guilt.

In a December 19 letter sent to the federal district court in Brooklyn, which describes today's expected plea of guilty to the substituted misdemeanor charge, Alshdaifat's attorney writes:

"The specific conduct to which Mr. Alshdaifat is charged in the misdemeanor information, and is expected to allocute to in court on Friday [December 21, 2012], involves the importing, on or about May 7, 2009, of certain Egyptian artifacts, including limestone funerary objects, from the United Arab Emirates to the United States by other co-defendants in the case. The airwaybill for this shipment was required by United States Customs law and regulations to include "such information as is necessary to enable the Customs Service to determine whether the merchandise may be released from customs custody." 19 U.S.C. § 1484(a)(l)(A)(i). This information includes, inter alia, the value of the goods being imported. 19 U.S.C. § 1485(a). In this case, the importer of  record, Mousa Khouli, intentionally misled Customs by placing merchandise in international mail that exceeded the value authorized to be entered into the United States by informal entry through the post. 19 C.F.R. Part 145, subp. B, § 145.12(a)(2).  On the airwaybill, he intentionally omitted the value and country of origin of the merchandise included in the mail package.  This certification made to the United States Customs Service was knowingly false in violation of 18 U.S.C. § 1018 and 19 U.S.C. §§ 1484-85. 

"After the international mail shipment arrived in the United States and was received by Mr. Khouli, he asked Mr. Alshdaifat, the seller on consignment of this merchandise, not to require him to make a direct payment of $40,000 for these items.  Instead, the two agreed to credit their accounts on other business.  By doing this, Mr. Khouli was able to avoid creating evidence that he knew that the value of the objects he imported was more than $2,000 and that he made intentionally false statements to Customs.  After the importation had been completed, Mr. Alshdaifat agreed to this financial arrangement knowing that it was intended to avoid creating evidence of Mr. Khouli's earlier violation of the U.S. Customs laws."

Last month the federal district court sentenced Khouli to house arrest after he pleaded guilty on April 18 to smuggling Egyptian cultural property into the United States and making a false statement to law enforcement.  Prosecutors were unable to obtain the prison term they requested.

Alshdaifat too seeks the court's leniency.  His lawyer writes, "The offense to which Mr. Alshdaifat is pleading guilty is substantially less serious and his conduct much less culpable than that of Mr. Khouli."  Counsel for the defendant adds:

ICE: Artifacts seized in US v. Khouli et al.
"Because Mr. Alshdaifat had only an accessory-after-the-fact role in Mr. Khouli's scheme to make false statements to U.S. Customs, and because he otherwise has a commendable personal history, no prior criminal history, and sympathetic family circumstances, he respectfully requests that the Court not impose a term of imprisonment or probation as part of his sentence for this conduct.  Also, because Mr. Alshdaifat already has suffered substantial economic harm from the fact that this case was brought against him, in both the form of lost business and from the government's improper seizure of his entire inventory of ancient coins for several months after raiding his home at the time of his arrest, we respectfully ask the Court not to impose a significant fine."

Antiquities collector and businessman Joseph A. Lewis, II was also indicted as a co-defendant last year.  His next court hearing is scheduled for January 3, 2013.  The fourth co-defendant indicted, Ayman Ramadan, remains a fugitive.  Both are presumed innocent unless the prosecution proves guilt beyond a reasonable doubt in a court of law.

In 2011, Homeland Security Investigations (HSI) of Immigration and Customs Enforcement (ICE) reportedly seized a large quantity of artifacts associated with the criminal investigation, including hundreds of allegedly smuggled antiquities from throughout the world, an Egyptian sarcophagus, two Indian wooden horses, and thousands of antique coins from ancient Greece, Rome, Egypt and Ancient Mesopotamian.  Authorities last year returned coins seized from Alshdaifat's home back to him. In 2011, Homeland Security Investigations (HSI) of Immigration and Customs Enforcement (ICE) reportedly seized a large quantity of artifacts associated with the criminal investigation, including hundreds of allegedly smuggled antiquities from throughout the world, an Egyptian sarcophagus, two Indian wooden horses, and thousands of antique coins from ancient Greece, Rome, Egypt and Ancient Mesopotamian.  Authorities last year returned coins seized from Alshdaifat's home back to him.

UPDATE December 31, 2012

Court papers published on Friday reveal that Alshdaifat pled guilty on December 21 pursuant to an agreement with federal prosecutors.  He pleaded to accessory after the fact to making a false official writing, a misdemeanor.  The information filed by U.S. Attorney Loretta Lynch charged the defendant with the following:

"In or about and between October 2008 and November 2009, both dates being approximate and inclusive, within the Eastern District of New York and elsewhere, the defendant SALEM ALSHDAIFAT, together with others, knowing that an offense against the United States had been committed, to wit: making and delivering as true a certificate or other writing containing a false statement, contrary to Title 18, United States Code, Section 1018, did knowingly and intentionally receive, relieve, comfort and assist the offender, to wit: Mousa Khouli, also known as "Morris Khouli," in order to hinder and prevent his apprehension, trial and punishment. (Title 18, United States Code, Sections 3 and 3551 et seq.)"

The court imposed a penalty of $1000 plus $10 special assessment.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Thursday, December 20, 2012

U.S. Mission to the U.N.  Source: Elmschrat CC
The United States has supported a Greek-sponsored UN resolution (A/RES/67/80) titled "Return or restitution of cultural property to the countries of origin."  The resolution (A/67/L.34), adopted by a consensus the General Assembly on December 12, urges nations to take antiquities trafficking seriously.  It was co-sponsored by 98 member states, including Canada, China, Italy, Mexico, Russia, Spain, and the United States.

A United Nations press statement remarked,"By the text, the Assembly deplored damage to world cultural heritage sites, particularly in recent conflict and crisis situations, and called for an immediate end to such acts, reminding States Parties to the 1970 Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property of their obligations."

In his address to the UN General Assembly, Ambassador Anastassis Mitsialis of Greece said, "Despite concerted international efforts to tackle the problem, illicit traffic of cultural property continues to pose a serious threat to cultural heritage of States. This threat is higher in situations of crisis and conflict, when cultural objects are often smuggled outside their countries of origin."  Ambassador Mitsialis added that "interaction with the international art market in view of improving practices in various areas of expertise such as provenance, investigation, ethics and procedures of restitution proves to be of paramount importance."  Representatives from Argentina, Cyprus, Italy, and Turkey also spoke on the assembly floor in support of the resolution.

The resolution, in part, "Urges Member States to introduce effective national and international  measures to prevent and combat illicit trafficking in cultural property, including  publicizing legislation and offering special training for police, Customs and border services and to consider such trafficking a serious crime, as defined in the United Nations Convention against Transnational Organized Crime."  UNTOC, ratified by the U.S. in 2005, defines serious crime as "conduct constituting an offence punishable by a maximum deprivation of liberty of at least four years or a more serious penalty."

The UN resolution "Also recognizes the importance of cooperation among States in the fight against illicit trafficking of cultural property, as well as its illegal removal from the countries of origin, through, inter alia, the conclusion of bilateral agreements and  mutual legal assistance, including the prosecution of persons involved in such activities and extradition, in accordance with the laws of cooperating States and under applicable international law."

A video covering the introduction, discussion, and adoption of the resolution appears below (total time: 30 minutes).  The discussion references an August 1, 2012 report of the Director-General of the United Nations Educational, Scientific and Cultural Organization on the return or restitution of cultural property to the countries of origin, which can be viewed here.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Tuesday, December 18, 2012

Prosecutors rebuked Sotheby's last Friday, accusing the New York auction house in a reply memorandum of failing to disclose information it knew about a Duryodhana statue offered for sale this past spring.  Prosecutors charge the New York auction giant with issuing misinformation to prospective sellers; skirting claims that the statue was stolen from Cambodia in 1972 and trafficked to Thailand; and making unsubstantiated assertions in its last court filing.

Governments lawyers write that "Sotheby's behavior is that of a company seeking to sell an artwork it knew was stolen, while maintaining plausible deniability should the true owner or the authorities become aware of the truth.  Accordingly, it supports the reasonable inference that Sotheby's knew the Statue was stolen, or at least suspected it and closed its eyes to the truth."

The U.S. Attorney's Office for the Southern District of New York filed the reply memo on December 14 to rebut arguments made recently by Sotheby's and Decia Ruspoli di Poggio Suasa, the claimants in United States of America v. A 10th Century Cambodian Sandstone Sculpture.  Readers will recall that federal prosecutors in November filed a petition to amend their original forfeiture complaint after the district court expressed skepticism.  The government seeks to forfeit and repatriate the statue to Cambodia, a sculpture originally from the Prasat Chen temple at Koh Ker and now sitting at the Sotheby's auction house in Manhattan.  

Daniel Patrick Moynihan Courthouse
Creative Commons: Americasroof
The claimants oppose the forfeiture.  They insist that the statue is not stolen property that must be forfeited.  Prosecutors disagree, arguing in their reply memo that "Prasat Chen was ...  the property of Cambodia in exactly the same way that the Daniel Patrick Moynihan United States Courthouse is the property of the United States."  Federal lawyers add, "If Sotheby' s wishes to argue that it was duped ... as a result of a negligent failure to investigate the representations of obviously self-interested parties regarding a statue with numerous indicia of theft, that is an entirely valid argument on the merits."

The prosecutors argue  in their reply memorandum to the court:

"The [government's] proposed amended Complaint adds crucial new allegations that go to the heart of this action.  Most importantly, it contains allegations regarding the theft of the Defendant in rem (the "Statue") from Koh Ker in 1972 by an organized looting network, which transferred it to Thailand. There, it was knowingly acquired from the looting network by a well-known collector of Khmer antiquities (the "Collector").  The Collector in turn sold the Statue in 1975 to the former husband of Claimant Decia Ruspoli di Poggio Suasa ("Ruspoli") on the international art market through an auction house which was also entirely aware of its illicit origin.  These allegations conclusively answer the arguments previously advanced by Claimants Sotheby's Inc. ("Sotheby's") and Ruspoli that the Statue could have been stolen by anyone at any time in the last thousand years.  Moreover, the new allegations in the Amended Complaint demonstrate that Sotheby's communicated closely with the Collector during the sale process, knowing him to be the original seller of the Statue, but failing to disclose that information to other interested parties, while also inaccurately informing such parties that the Statue had been seen by numerous people in the United Kingdom in the late 1960s, at least three years before it was stolen from Koh Ker.

"Claimants fail to acknowledge the significance of these new allegations, and indeed go to great lengths to avoid mentioning the facts concerning the 1972 theft of the Statue in their Memorandum of Law in Opposition to the Motion ("Clmt's Br.").  Instead, Claimants largely focus on various documents and unsupported attorney assertions regarding Sotheby' s supposed intentions that they themselves admit are entirely improper for the Court to consider. (See Clmt's Br. at 2 n.1 (Claimants "do not ask the Court to rely on emails" they attach); 13 (Claimants "do not ask the Court to rely on materials" they go on to discuss at length).)  The Court should, of course, disregard these sections of Claimant's brief entirely.

"As to their actual bases for denial of the motion, Claimants argue that the Motion is futile because it would not survive a motion to dismiss on three grounds.  First, Claimants argue that the Statue was not actually owned by Cambodia at time of the theft.  As described in detail below, the Statue was owned by Cambodia in 1972 pursuant to clear and unambiguous national ownership laws.  Second, Claimants again assert their frivolous argument that British law rendered the Statue no longer stolen six years after the 1975 sale.  As made clear by their very own expert in British law, Claimants bear the burden of proof on the relevant issue even if British law actually applies, and so they cannot prevail on a motion to dismiss.  Third, Claimants continue to assert that the allegations regarding their knowledge that the Statue was stolen are insufficient.  The factual allegations in the Amended Complaint are more than sufficient to show that Claimants knew the Statue was stolen, or at least that they consciously avoided learning the truth about the theft of the Statue.

"Finally, Claimants argue that the Government delayed unduly in filing this Motion, despite being entirely unable to point to any case where a Court found undue delay in similar circumstances.  The Government appropriately filed the Amended Complaint to include facts gathered in the course of its post-Complaint investigation which could 'aid the court in assessing both the adequacy of the complaint and Defendant's remaining arguments in its motion to dismiss.' Michael Miller Fabrics, LLC v. Studio Imports Ltd., Inc., No. 12 CV 3858 (KMW), 2012 WL 4513546, *2 (S.D.N.Y.  October 1, 2012).  Accordingly, leave to file the Amended Complaint should be granted and Claimants' motion to dismiss should be denied as moot.  ld. at *2-3.

"The Amended Complaint has clearly alleged sufficient facts to support a reasonable belief that the government will be able to meet its burden of proof at trial by showing that Sotheby' s either knew or consciously avoided learning that the Statue was stolen when it imported it into the United States and attempted to sell it."

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Acknowledgement: Gary Nurkin

Thursday, December 13, 2012

On December 3, 2012 this blog discussed The Cultural Property Importer's Responsibility. Today's post continues that discussion by describing the information required by U.S. Customs and Border Protection (CBP) when assessing whether a cultural object may be imported lawfully.

Source: CBP
CBP will issue binding interpretations of law regarding cultural property imports when requested in writing.  19 CFR 177.  CBP, for example, will determine the tariff schedule that a cultural property import falls under, such as subheading 9705.00.0070 of the Harmonized Tariff Schedule of the United States (HTSUS), which typically covers collectors' pieces of archaeological, historical, paleontological, ethnographic, numismatic, and similar categories.  More importantly, CBP will definitively rule whether a cultural object is permitted into the United States.

Museums, antiquities dealers, ancient coin sellers and others are keenly aware of the variety of cultural property, criminal, customs, civil, and other laws that can affect the lawful import of cultural objects.  These laws potentially can subject cultural objects to seizure and forfeiture, and they can prompt criminal charges against individuals for smuggling, receiving stolen property, or other crimes.  That is why a binding customs ruling can be a great benefit.  An official ruling can ensure the legality of an object's import, offering protection from legal liability and preventing "hot" objects from entering the U.S. in violation of American import rules.

A March 10, 2011 customs ruling (NY N148735) describes the types of information that importers or other interested parties should provide to CBP so that the agency can evaluate the lawful entry of a cultural good.  That case ruled on the tariff classification of a silver Dancing Satyr sculpture from the Roman era, and was decided in response to a request filed on behalf of art dealer Robert Haber and Associates.  CBP's National Commodity Specialist Division gives this important advice, applicable to all importers of cultural property:

"If you want a ruling on the admissibility of the Dancing Satyr statue, please furnish to the best of your abilities the following information on the provenance of the antiquity, the history of the item since its removal from the area of origin:

(1) verifiable documentation that the item has been in a private collection or in the same family for several generations or that it was acquired a long time ago,

(2) full names and contact information for all private parties that the seller claims previously owned the item,

(3) full names and contact information of all galleries or auction houses that the seller claims previously owned the item – if the gallery is the owner verifiable information on the previous owner/s as in [1] and [2] above,

(4) an illustration of the item taken from a dated, old auction catalog depicting and describing the exact item,

(5) a dated, signed certificate or statement of authenticity with illustrative photo associated to the item’s description from a respected authority or expert within the field,

(6) all original sales receipts establishing date of purchase,

(7) a film or recording or magazine (literature) talking about the item that can establish time of original purchase or subsequent purchases,

(8) dated letters or papers from recognized experts or authorities discussing the item,

(9) a dated appraisal from a recognized authority or expert with photo and description of the item, and

(10) an analytical investigation report with photo, description and technical write-up establishing a relative timeframe of the piece."

Following customs rules is important and mandatory for cultural property importers.  There is no better way to comply with import regulations than to seek a binding customs ruling and by providing complete information about an object's history to the fullest extent possible.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Monday, December 10, 2012

Cracking down on the illegal antiquities trade by regularly prosecuting criminal offenders and dismantling their infrastructure must be a leadership priority for U.S. Immigration and Customs Enforcement's (ICE). The Homeland Security Investigations (HSI) directorate of ICE currently pursues a "seize and send" policy focused on recovering and repatriating antiquities rather than investigating and indicting criminals.  That policy must change in order to effectively combat a crime that permanently destroys the archaeological record and injures both history and culture.

HSI Special Agent-in-Charge James Hayes with Indian idols seized last week.
ICE's seize and send policy is illustrated by many of the agency's press releases. It was restated last week during a Chasing Aphrodite interview with James T. Hayes, Jr., Special Agent-in-Charge of HSI New York.  Hayes defended the seize and send policy:
"The focus is always to return stolen property to its rightful owners," Hayes acknowledged, saying making criminal cases was desirable but challenging. "You have to have a legal basis to prove those items, and you have to prove certain things and that proves very difficult.  We’re dealing with laws around the world, in foreign courts and different jurisdictions."
HSI's chief added, "At the end of the day, our primary responsibility is to get stolen property back to its rightful owners."

Returning stolen property to owners is a regular goal of many law enforcement agencies. But there is little indication that simply recovering and repatriating cultural property puts smuggling networks out of business. Criminals engaged in the illegal antiquities trade surely realize that they face little or no risk of legal accountability for their actions. They must also be aware that the occasional confiscations by police of portions of their inventories do not actually take down their supply, transportation, conservation, distribution, marketing, and sales infrastructures.  That is why prosecutions, coupled with forfeitures of infrastructure assets (instrumentalities forfeitures), should be made part of law enforcement's response.

The decision not to pursue prosecutions and instrumentalities forfeitures on a regular basis produces several negative outcomes:

First, because antiquities traffickers go unindicted, the risk of offenders facing the consequences of prosecution--jail, fines, probation, and/or a criminal record--is eliminated. Naturally, there is neither general nor specific deterrence against the commission of antiquities trafficking when there is no fear of getting caught.

Second, court sentences will continue to be light in those rare circumstances when antiquities smuggling prosecutions are actually brought forward. That is because the judiciary, not seeing many cases on their dockets, will believe that this criminal activity is insignificant in scope or impact.

Third, the infrastructures used to facilitate antiquities trafficking remain intact. Seizures of ancient pots or Egyptian sarcophagi may remove the fruits of an antiquities trafficker's crime, but their confiscation by authorities likely represents a only portion of the trafficker's illegal inventory at any given moment. Such limited seizures cannot be expected to shut down expansive global networks operating continuously. Seizures of the instrumentalities used to commit antiquities trafficking, by contrast, could help dismantle large swaths of trafficking infrastructures. Just as asset forfeitures in drug cases confiscate the automobiles, boats, planes, homes, etc. used in unlawful narcotics manufacturing and distribution networks, seizures of the instrumentalities used to traffic illegal antiquities could disrupt or shut down antiquities trafficking chains.

Finally, prosecutors and police will continue to confront both a learning curve and inefficiency so long as there is no change in enforcement policy. Routine antiquities trafficking prosecutions and enforcement, by contrast, would prompt prosecuting attorneys and detectives to meticulously learn how the crime operates, what evidence is commonly found in such cases, and what legal defenses typically arise. The experiences gained would foster more efficient criminal investigations in the field and more effective legal cases in the courtroom.

HSI's chief is correct to observe that antiquities trafficking cases can be complex. But law enforcement authorities over the decades have discovered ways to unravel complex transnational transactions. If complicated international money laundering, commodities smuggling, and drug trafficking cases can be solved and prosecuted, so too can antiquities trafficking cases. Indeed, criminal organizations have little incentive to cease trafficking operations if law enforcement concede that their activities are too hard to prosecute.

When criminal investigations become too complex to warrant effective action under one set of laws, one enforcement tactic is to separate the overall crime into component parts, examining the parts under different statutes. So instead of building an antiquities trafficking case broadly around the National Stolen Property Act, for example--which relies on an review of foreign ownership laws to determine if a trafficking suspect has knowingly received stolen antiquities in violation of the statute--authorities might shift their focus to build a case on the basis of false statements. Put another way, one method of not "dealing with laws around the world, in foreign courts and different jurisdictions" is to focus on the cover-up rather than the crime.

It is widely known that criminals rarely act in the open, committing fraud and deceit to conceal their activities. That is why criminal cultural property importers oftentimes falsify customs paperwork, classifying looted antiquities as something else on import forms. Making a false statement on an official customs form is a crime under 18 U.S.C. 542, and prosecutions under this statute do not require reliance on anything except evidence of criminal falsification. Juries simply need to be shown that an ancient antiquity found in a cargo crate is not a "garden table set" or some other false description written down on a customs form. Criminal knowledge of the false statement, meanwhile, can be demonstrated by additional positive evidence and/or by circumstantial evidence--which counts in a criminal case--showing that the criminal defendant was “without reasonable cause to believe the truth of such statement.” This example demonstrates that there may be other, potentially simpler, legal and investigative options available to authorities.

Cicero said, "What one has, one ought to use: and whatever he does he should do with all his might." HSI agents are seasoned investigators who should be given the green light to use their skills with all their might in an effort to expose the illegal antiquities trade and take down its networks. Partnering with prosecutors, HSI should systematically apply the National Stolen Property Act, the false statements law, and many other federal laws to successfully combat antiquities trafficking. Referring cases for state prosecution should also be a routine consideration rather than an occasional one. Coupled with the seizure of assets used to facilitate antiquities trafficking, regular prosecutions in the courts would dismantle or disrupt these criminal networks more effectively than the current seize and send policy.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Wednesday, December 5, 2012

In a pointed and efficient twenty page legal memorandum filed Monday, lawyers for the claimants in United States of America v. A 10th Century Cambodian Sandstone Sculpture, Currently Located at Sotheby's charge federal prosecutors with having failed to allege that the statue was stolen, that it remained stolen, or that the claimants even knew that the statue was or remained stolen.  They also accuse prosecutors of having wasted the court's time to the detriment of the claimants.

The case is a civil action by the U.S. Attorney for the Southern District of New York to forfeit a Khmer statue and repatriate it to Cambodia.  Sotheby's auction house in Manhattan and consignor Decia Ruspoli di Poggio Suasa are the claimants trying to stop the forfeiture.

Last month federal prosecutors proposed an amended complaint to the court that raised new allegations in the case, including that the Duryodhana statue was stolen from Cambodia in 1972, was trafficked through Thailand, and that a scientist was fired after having concluded that the sculpture may have been broken for ease of transport.  The claimants' Memorandum of Law in Opposition attempts to block the government’s request for permission to file the amended complaint.  Below are highlights of the claimants’ arguments quoted from their memorandum:

"During oral argument on our motion to dismiss, the Court pressed the Government to identify 'clear ownership established by clear and unambiguous language.' 9/27 Tr. at 126. The Government was unable to do so. The French colonial decrees on which it relied simply do not clearly and unambiguously grant the state ownership of objects like the Statue, and the Government and its expert could not identify even one instance, in the eighty-seven years since the decrees were issued, in which anyone had interpreted those decrees as doing so.

"The proposed amended complaint ('PAC') does not solve this fatal weakness in the Government's case.  The PAC does not identify some newly found law declaring Cambodia the owner of the Statue.  Indeed, it does not identify any law beyond those already discussed in the Government's prior filings.  Instead, the Government now relies on the inherent right of kings.  The PAC claims that a Cambodian king a thousand years ago built the Prasat Chen temple where the Statue's feet were allegedly found, and asserts that the Statue--and anything else from Prasat Chen, no matter when or where found--therefore automatically belongs to the modern Cambodian state.

"No court has ever forfeited property on such a theory, which squarely conflicts with the settled and undisputed law articulated in [United States v.] McClain and [United States v.] Schultz.  According to those cases, due process forbids applying the statutes on which this forfeiture case relies unless the foreign law invoked as the basis of ownership is both clear and unambiguous.  There is no law at all, much less a clear and unambiguous one, declaring either that the ancient Cambodian king owned everything at Prasat Chen when it was built one thousand years ago, or that the modern state of Cambodia now owns everything from Prasat Chen that was abandoned to the jungle fifty generations ago."

"Specifically, the absence of such a [Cambodian patrimony] law also prevents the Government from calling into question the good faith of either Ms. Ruspoli or Sotheby's.  Both were entitled to conclude from the absence of any clear law vesting ownership in Cambodia that the Statue was not stolen when removed from Cambodia. And both were certainly entitled to conclude that it did not remain stolen at the time of import into the United States, almost two decades after the period allotted by English law for Cambodia to make a claim had expired."

"The PAC strains to cast Sotheby's in a bad light by offering selective quotations from very limited portions of the documentary record.  These attacks on Sotheby's are not just untrue; they are unfair, for they are fully rebutted by documents currently in the Government's possession.  For example, the PAC alleges that Sotheby's was ‘inaccurate’ when it told ‘potential buyers, the Kingdom of Cambodia, and United States law enforcement’ that the Statue ‘had been seen in the United Kingdom in the late 1960s.’ PAC 43.  But documents produced to the Government more than a year ago reflect that the Art Historian represented to Sotheby's, in writing, that she herself had ‘[f]irst seen' the Statue at 'Spink & Son ... in the late 1960's while visiting London.' Neiman Aff. Ex. 1 at SOTH-000196. Any inaccuracy cannot fairly be attributed to Sotheby's.  So too, the PAC faults Sotheby's for 'omitting' the Collector's alleged prior ownership of the piece when it described the Statue's provenance. PAC 44.  But the very document the Government cites--a May 2010 email--relates to an instance in which Sotheby's shared this information with representatives of a potential buyer. Neiman Aff. Ex. 2. That Sotheby's later stopped including this information in the Statue's provenance reflects not an effort to conceal an innocuous fact (the Collector is sufficiently well regarded in the field that his books have featured laudatory forwards by Cambodia's Minister of Culture and the Director of its National Museum, and there is no allegation that Sotheby's knew he was linked to a smuggling ring), but rather a change in its understanding of the facts: in June 20 1 0, the Collector himself, in writing, squarely denied prior ownership.  Neiman Aff. Ex. 3."

"Discovery exchanged in this case reveals that the Government had in its possession the 'new' facts alleged in the PAC in mid-July of this year, more than a month before the Government filed its opposition to our motion to dismiss.  Perhaps recognizing that these facts did not address the key problems with its Complaint, the Government made the tactical choice not to seek leave to amend, and instead to hint in its opposition brief that it had new information.  It was only after the Court at oral argument on the motion to dismiss called its case '[not] the strongest,'  9/27 Tr. at 126, that the Government rethought that tactical choice and filed this motion.   The unreasonable and unnecessary delay between when the Government had the information and when it sought leave to amend significantly burdened both the Court and Claimants, and provides an additional basis for denying leave to amend.

"The risk in a case like this is that the Government--even if it lacks any fair basis to proceed--can win simply by making the case more expensive to litigate than the property is worth."

"The Government has now had three full opportunities to state its case: in its opening complaint, in its brief in opposition to our motion to dismiss, and in its proposed amended complaint. The Government has failed all three times to identify a clear and unambiguous law granting Cambodia ownership of the Statue. It has instead responded with three different legal theories, each of which was constructed for this litigation but has-so far as one can tell from the Government's pleadings and the affidavit of its expert-never been applied before to any similarly situated object. None of these theories comes close to meeting the due process test.
Nor has the Government been able to identify facts challenging the good faith of Ms. Ruspoli or her husband, or a reasonable basis to believe that Sotheby's knew the Statue was and remained stolen.  There is no reason to give the Government yet another chance. Leave to amend should be denied, and the Complaint dismissed with prejudice."

Hat tip: Gary Nurkin.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Tuesday, December 4, 2012

The First Circuit Court of Appeals today heard arguments about the meaning of the word "of" in the case of Rubin v. Iran.  The Rubin plaintiffs wish to seize "property of Iran" after receiving a multi-million dollar court judgment holding that country responsible for injuries caused by a terrorist attack.  The litigants have been unable to obtain payment; therefore, they seek to execute the judgment by taking ancient Iranian cultural artifacts housed at the Boston Museum of Fine Arts (MFA) and the Harvard museums.  After losing their case in the lower federal district court, the plaintiffs appealed.

The attorney for the plaintiffs/appellants told the judges today, "We don't really care, frankly, whether or not the property actually belongs to Iran." explaining "All we care about is whether the property is 'of Iran.'"  "What does the word 'of'' mean?," counsel asked.  He answered that "...the word 'of' does not always mean possession."

Harvard's counsel countered that the basic, longstanding rule is that judgment creditors bear the burden to prove that property belongs to a judgment debtor before it can be seized.  Counsel objected to the notion that a judgement potentially could be satisfied against an innocent third party rather than the actual wrongdoer, Iran.  MFA's counsel said that the artifacts "are no longer associated with Iran," so they are not the property of Iran.  Indeed, Iran has never made any claim of ownership to the museum artifacts, counsel argued.

The United States presented argument as well to say, inter alia, that "of" means "belonging to."

In a rebuttal argument, counsel for the plaintiffs/appellants questioned whether the museums actually hold the cultural artifacts legally, saying that the museums have "done almost nothing to verify that ... their assets are properly received."  "At some point an inference is created .. that these assets are not here properly," counsel alleged.

Issues of  statute of limitations, adverse possession, preemption, the terms of the Terrorism Risk Insurance Act (TRIA) and the Foreign Sovereign Immunities Act (FSIA), and more were also discussed.  The full audio of the court session can be found by clicking here.  A summary of many written arguments made by the plaintiffs/appellants are found here, while the appellant museums' written arguments can be found here.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Monday, December 3, 2012

When cultural material is brought into the United States from abroad, the country of origin must be listed accurately on customs import forms. See 19 U.S.C. 1304. There are some, nevertheless, who argue that this duty and many other import mandates are too difficult to bear.  It has even been claimed in some instances that these requirements should be shifted from cultural property importers to customs officials. But such interpretations of federal law are incorrect. Three cases this year, in fact, reinforce the notion that cultural property import requirements are borne by importers, particularly--as one appeals court judge observed--because they possess the most knowledge about the goods that they seek to import.

In the case of Ancient Coin Collectors Guild v. U.S. Customs and Border Protection et al., the fourth circuit court rejected the ACCG's claim that information requirements concerning ancient coins from China and Cyprus should be placed on the customs officials who enforce the Cultural Property Implementation Act's (CPIA) import restrictions. One judge during oral argument commented that there is only a "slight burden" placed on importers to explain where regulated coins would have been located during the last few years. A unanimous court ultimately pointed out that importers bear responsibility for complying with customs rules, writing that "CBP [U.S. Customs and Border Protection] need not demonstrate that the [Chinese and Cypriot] articles are restricted; rather, the [CPIA] statute 'expressly places the burden on importers to prove that they are importable.'"

The case of United States v. One Tyrannosaurus Bataar Skeleton also advanced the proposition that the cultural property importer has legal responsibilities that cannot be shirked.  In upholding the sufficiency of the government's complaint to forfeit imported dinosaur bones, the New York federal district court disagreed with the dinosaur importer's "conten[tion] that the failure of the government to provide regulatory guidance on determining the proper country of origin or value of fossils leaves importers 'hard-pressed to respond to a customs broker's inquiry about the country of origin of a dinosaur fossil that existed millions of years before the emergence of Homo sapiens and even longer before the concept of a 'country' was established.'"  The court wrote that "[t]he prohibition in [the anti-smuggling statute] against importation by means of 'any false statement' is not vague or ambiguous, and it does not make reference or in any way depend upon regulatory guidance concerning the proper country of origin or value of fossils."

Meanwhile, an October 2012 Customs and Border Protection (CBP) tariff classification ruling (N233501), which addressed ancient coins, affirmed that cultural property importers bear the burden to comply with legal requirements. (The case also demonstrates the mechanism by which U.S. Customs can help importers who seek assistance with compliance).  In this case, the goods reviewed by CBP's National Commodity Specialist Division were "a collection of 12 ancient Greek coins ... obtained from different places and spanning different periods of time" and collectively labeled "The Ancient Greek World – 12 Silver Coin Collection." Also examined were "The Roman Love," described as two coins from the Roman Empire bearing portraits of Antonius Pius and Faustina I.

The customs ruling explained the importer's duty under 19 CFR 134.1(b) to declare the coins' "country of origin," accurately describing the country of manufacture or production. The ruling proposed the following sound advice to help the petitioning importer comply with the law: "Ionia (ancient Greek) is an ancient region of central coastal Anatolia in present-day Turkey. As such, it would not be unreasonable that some or all of the coins in The Ancient Greek World – 12 Silver Coin Collection be marked with country of origin Turkey and the 2 coins in The Roman Love in Genuine Silver (Pius and Faustina I) be marked with country of origin Italy.  If evidence exists that the coins were made in multiple modern day countries, but uncertain as to which specific country or countries, then list all possible countries in which the coins could have been made."

What these cases demonstrate is that cultural property importers who bring goods into the United States must openly and accurately--to the best extent possible--disclose where cultural objects come from as well as any other legally required information. Arguments to the contrary will continue to be rejected by legal officials.  That is because importers are in the best position to describe their products to customs officers, who often must rely on importers' declarations to either permit or stop goods from entering the country.

More on this topic can be found by reading Importing Cultural Objects Legally.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT:

Sunday, November 18, 2012

Mousa "Morris" Khouli will be sentenced this week in federal court in Brooklyn.  Khouli's lawyer, Gerald Shargel, seeks a sentence of probation while the prosecution wants imprisonment.

[UPDATE 11/21/12: Judge Edward R. Korman on November 20 sentenced Khouli to terms that included six months home confinement, one year probation, up to 200 hours of community service, and a criminal monetary assessment of $200.  Judge Korman departed from the federal sentencing guidelines when issuing the order.  Khouli also agreed to forfeit the property seized.]

Assistant United States Attorney Karin Orenstein submitted written arguments to the U.S. District Court for the Eastern District of New York in advance of the sentencing, asking for 46-57 months of incarceration. The prosecutor writes:

Source: ICE
"The smuggling of the Egyptian antiquities that are the subject of the Indictment comprised but a small part of the defendant's smuggling career. ... His willingness to invent provenances to 'launder' cultural property has added an air of legitimacy to items that should be scrutinized as potential stolen property. Indeed, the defendant sold at least one antiquity, the terre-crue head, that was stolen from Iraq. Last, the defendant lied to government agents repeatedly to cover up his criminal conduct."

But Khouli's lawyer argues in court papers that similarly situated defendants have not received sentences of imprisonment. Cultural property dealers, an American soldier, a book author, and a hand surgeon have all received probation for smuggling cultural property, the defense argues.  The defense points to ten criminal cases involving 25 defendants to show that probation is the typical sentence handed down by the courts.

Federal prosecutors counter in their pleadings "that the combination of the rarity of cultural property smuggling prosecutions accompanied by a pattern of non-incarcerative sentences has failed to have a deterrent effect. To the contrary, the remote possibility of a non-jail felony conviction has become the cost of doing business." They add, "Unlike securities dealers or government contractors, dealers in cultural property can continue to work in the same field despite convictions for smuggling and lying to government agents."

Prosecutors concede that "smugglers of cultural property have generally received non-incarcerative sentences" but observe "that that these sentences often include a period of six months or a year of home detention as well as forfeiture and fines." Cases cited by federal prosecutors include (with descriptions and sentences supplied by this author):
  • United States v. Malter, (a case that includes Malter Galleries, Inc.) 09-CR-834 (C.D. Cal.): Pleas of guilty in 2012 to illegal trafficking of artifacts from federal land in violation of the Antiquities Resources Protection Act. Charges dropped involving illegal pre-Hispanic ceramic vessels and artifacts from El Salvador.  Sentence imposed of one year home detention, two years probation, payment of $10,000 of community service to the National Park Foundation Pacific West Region Archaeological Investigation fund, special assessment of $100, restitution in the amount of $6,215.57, and a fine of $8,000.
  • United States v. Perez, 07-CR-499 (C.D. Cal.):  Plea of guilty in 2012 to a single count indictment of smuggling a pre-Hispanic bowl from El Salvador in violation of 18 USC 545 without an export permit as required by 19 USC 2606(a) of the Cultural Property Implementation Act (CPIA). Sentenced to six months house arrest and a fine of $10,000.
  • United States v. Johnson, 08-CR-491 (S.D.N.Y.):  Egyptian stolen property case with a plea of guilty in 2008 to misdemeanor count (dropped from a felony) of receiving stolen property within special maritime and territorial jurisdiction pursuant to 18 USC 662.  Sentenced to restitution in the amount of $21,200 plus a special assessment of $25 and 18 months probation with the first six months served in home detention.
  • United States v. Braude, 03-CR-1009 (E.D.N.Y.):  Pleas of guilty to smuggling under 18 USC 545 and false statements under 18 USC 1001 for trafficking three Iraqi cylinder seals. Sentenced to six months house arrest and a fine of $2000 plus $300 assessment.
"Khouli's professional life has suffered tremendously," argues Khouli's attorney, adding that others do not want to engage in business with a felon who is seen a "a pariah in the industry."  That is why "the government's deterrence arguments [in favor of incarceration] are meritless," he writes.

The defense additionally takes issue with the prosecution's assertion that Khouli had knowledge that an Iraqi terre-crue artifact was stolen.  The defense also emphasizes that "their is no claim that any antiquities at issue in this case were stolen or looted, possessed by Khouli in violation of U.S. law, or imported in violation of Egyptian patrimony laws" (emphasis in the original).

Federal prosecutors want the court to consider that "the defendant flouted Customs regulations time and time again for his own pecuniary gain" and that "Khouli lied to Customs for years and covered up those lies by making false statements directly to investigating agents." They conclude, "A nonincarcerative sentence under these circumstances does not promote respect for the law."

Mousa "Morris" Khouli pleaded guilty on April 18, 2012 to smuggling Egyptian cultural property into the United States and making a false statement to law enforcement authorities.  The antiquities dealer was indicted by a federal grand jury in 2011.  Also indicted were Joseph A. Lewis II, Salem Alshdaifat, and Ayman Ramadan who continue to litigate their cases. Ramadan remains at large.

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at Text copyrighted 2012 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT: