Transnational cultural heritage
trafficking thrives on an opaque art and antiquities market. Attractive
features of this marketplace include discretion surrounding business
transactions, easy creation of shell corporations, the high probability that
smuggled imports won't be detected, clever mechanisms to move money, infrequent
prosecutions of traffickers, and limited regulatory resources.
Police and prosecutors need
additional tools to build capacity, spot contraband, and capture the
criminals. Here are six recommendations.
#1 Specialized federal prosecutors
At least two federal prosecutors
should be assigned to focus exclusively on cultural heritage trafficking. One
might be placed in the U.S. Department of Justice in Washington , DC and
another in the criminal division at the U.S. Attorney's Office for the Southern
District of New York, the heart of America's art and antiquities marketplace.
Only federal prosecutors have
authority to prosecute federal felony crimes like importing goods illegally or
falsifying import paperwork, crimes which are typically part of
antiquities trafficking.
While there have been several
commendable cases where federal authorities have seized contraband antiquities
and sent them back to their country of origin--particularly in New York City--few have resulted in criminal convictions. This
"seize and send" policy must mature into an
"investigate and indict" objective, where authorities hold
individuals accountable through convictions and criminal penalties. Otherwise
thieves, smugglers, fences, and their accomplices will continue to
experience no specific deterrence or general deterrence that the criminal
justice system uses to curb criminal conduct.
Already the seizure and forfeiture
of cultural property in federal court depends on a U.S. Attorney proving that a
criminal statute was violated. So it only makes sense that the individuals
who commit the underlying crime should be prosecuted too. Once cultural objects
are sent away to their country of origin through the seizure and forfeiture
process, there is no case left to prosecute because the primary evidence has
been sent away, an outcome that occurred even in a
case where investigators suspected terrorist financing.
Without federal prosecutions, U.S.
attorneys fail to develop the trial or investigative skills needed to uncover
and describe to juries criminal networks and their subtle money trails,
clandestine trafficking routes, and shell corporations used to move contraband
cultural property into the American marketplace.
Specialized prosecutors would be
expected to work together to support Homeland Security Investigations and the
FBI, which in turn would sharpen prosecutors' white collar crime skills to
help guide investigations, craft search warrants, present cases before grand
juries, and try cases in the courtroom. The art and cultural property theft cases successfully handled by the team of former Assistant U.S.
Attorney Robert Goldman and former FBI Special Agent Robert Wittman serve
as an illustration. Roger Atwood's Stealing History tells some of
their stories.
#2 State prosecutions
Matthew Bogdanos, a
prosecutor at the New York County District Attorney’s Office, is
pioneering efforts to apply state law to cultural property crimes. One example
is the conviction he secured in the case of People v. Aaron Freedman.
Manager of Subhash Kapoor's Art of the Past gallery in New York City, Freedman pleaded guilty in 2013 to felony conspiracy and five counts of felony criminal
possession of stolen property. But we need more state prosecutors focused on these types of crimes.
While federal law has
jurisdiction over illegal import cases, state law is best used to
prosecute sellers of stolen cultural property. Since 2005, CHL’s author has
discussed how district and county attorneys--who generally have lots of
experience prosecuting property cases--may rely on state receiving stolen
property statutes to target culpable sellers of cultural heritage objects.
Every state has enacted a receiving
stolen property statute in some form, and these laws generally prohibit a
person from selling, transporting, or receiving stolen property. State
receiving stolen property laws are fundamentally similar to the National Stolen
Property Act (NSPA), the federal statute that outlaws different forms of
theft. But many states' laws give distinct advantages to district and
county attorneys, allowing them to more easily hold dirty dealers accountable.
For example, over two-thirds
of state laws require lower mental states. Where the NSPA requires proof that a
criminal defendant had full knowledge that a cultural object was stolen, most
state laws only require proof that the offender should know, had reason to
know, had reason to believe, or simply believed that the property in a
dealer's possession or offered for sale was stolen or probably stolen.
A federal prosecutor would need to prove that a dealer actually knew an
object was stolen, but a state prosecutor may simply need to prove that a
dealer had reason to believe that an artifact had been stolen, which is a much
lower legal burden.
More importantly, almost one
quarter of the states have a built-in legal assumption that a dealer in
goods is presumed to know an object was stolen when (a) the dealer
did not reasonably gather information about whether the good was lawfully sold
or delivered to the dealer, (b) acquired the good far below reasonable value,
or (c) purchased or sold the good outside the regular course of business. New York Penal Law § 165.55(2) is an apt example: "A … person in the
business of buying, selling or otherwise dealing in property who possesses
stolen property is presumed to know that such property was stolen if he
obtained it without having ascertained by reasonable inquiry that the person
from whom he obtained it had a legal right to possess it."
In New York, like in other
states, it is no defense that somebody else stole the property or
that the property was stolen from out of state. And states, for the most part, don't require the stolen property to be valued at $5,000 or more, in contrast to the federal NSPA statute.
All these legal advantages
give district and county prosecutors an edge to hold antiquities and other
cultural property dealers accountable when a crime has been committed.
#3 Detector dog research
Detector dogs that could sniff out
smuggled cultural heritage objects, particularly archaeological artifacts,
certainly would help customs agents at U.S. ports of entry.
Huge numbers of commodities pore
across America's borders each day. For customs agents to spot illicit art,
antiquities, and collectibles arriving by cargo ship or air freight among
the countless illegal drugs, guns, bird feathers, mangoes, jellyfishes,
seeds, counterfeit NFL jerseys, and the like can be overwhelming. Remember
too that their highest priority is intercepting radiological, biological, and
other explosives before they can cripple the homeland. That is why
cultural property detector dogs could prove useful.
Sniffer dogs already have
demonstrated their worth to U.S. Customs and Border Protection agents by
detecting pests and illegal agricultural goods. That is why research must be
undertaken to see if detector dogs can be trained to identify smuggled
antiquities and other cultural objects. Preliminary inquiries by Red Arch in consultation with
relevant experts suggests that such a research project is worthwhile.
#4 Recordkeeping laws
When a healthy trade becomes a blackmarket temptation for stolen and smuggled cultural heritage, new
recordkeeping laws could assist prosecutors and police. These
laws would require dealers, galleries, and auction houses to record the
identities and transactions of suppliers and buyers of cultural property while
upholding legitimate business privacy interests. See the detailed recordkeeping proposal
here.
When pawn shops became magnets for
stolen property, states overwhelmingly passed recordkeeping laws to help police
as well as crime victims. States similarly passed scrap metal
recordkeeping rules when stolen copper and aluminum flooded the marketplace.
For banks, the USA Patriot Act enacted another kind of recordkeeping
rule called Know Your Customer, which helps identify money launderers,
terrorist financiers, and foreign corrupt practices within the financial industry.
In like manner, law enforcement should have access to business records that
would help uncover perpetrators of cultural heritage trafficking.
#5 Enhanced AML/CTF statutes
To zero in on untraceable shell
corporations, laundered money, and terror financing associated with cultural
heritage trafficking, existing anti-money laundering and counter-terrorist
financing laws (AML/CTF) need to be enhanced to include the cultural property
market.
Current statutes are designed to
root out criminal exploitation of highly susceptible commercial and financial
industries. Yet the marketplace for art, antiquities, fossils, ancient
coins, and other cultural property remain absent from this list.
The Financial Action Task
Force (FATF), the seminal inter-governmental organization focused on
AML/CTF, specifically identifies illicit
trafficking of cultural goods, counterfeiting of antiquities, and the illegal
trade of antiquities as facilitators of money laundering and terrorist
financing. Moreover, the U.S.Department of State's Bureau of International Narcotics and Law Enforcement Affairs Office of Anti-Crime Programs specifically refers to "art
dealers" when discussing AML/CTF objectives. The Basel Art Trade Guidelines also point out, "Far more serious than shady
dealings in a legal gray area, the sector’s shadow economy encompasses issues
ranging from looted art, professional counterfeiting and fake certificates to
the use of art sales for the purpose of money laundering.
Pawnbrokers, car dealers, dealers
in precious metals and jewels, travel agents, and other NBFI's (non-bank financial
institutions) are identified by AML/CTF laws as industries where criminals are
known to clandestinely move large amounts of money or discreetly convert cash
into high value goods. But the art and antiquities marketplace is not included
in the Bank Secrecy Act, the USA Patriot Act, and other AML/CTF statutes. This
needs to change.
An additional legislative change is
needed to expose cultural property smugglers who set up myriad shell
corporations to discreetly hide their business operations. They create
untraceable companies that only exist on paper and whose officers remain
unknown, or they use layers of shell corporations to transfer cultural
contraband through a maze of paper trails to throw off investigators.
One proposal currently wending its
way through the U.S. Senate seeks a solution. The Trade Facilitation and Trade
Enforcement Act (S. 1269 and
similar companion bills) calls on the Department of Homeland Security to assign
a single registration number to importers of record. That way importers
can't set up multiple import companies to hide their identities or their trade
activities.
[Sidebar: Setting up a separate,
companion corporation is not illegal. But hiding illegal business
transactions in a shell corporation is. Cases involving "Bactrian Global Enterprises" and Nimbus Import Export are two examples where separate corporations were
maintained. Were they for legitimate reasons or not?]
#6 Adding the cultural property marketplace to consumer protection watch lists
Cultural property crimes impact
consumers who may pay substantial amounts for ancient Greek vases,
Egyptian sculptures, and similar cultural heritage objects. The objects might
be looted, stolen, or smuggled, or they might even be fakes. Because cultural
property markets contain a number of recently surfaced artifacts without
documented collecting histories, or with thinly veiled collecting
histories, or with entirely false histories, consumers risk purchasing illegal
or fake heritage objects. That is why state attorneys general should instruct
their consumer protection divisions to be watchful.
Attorneys general typically enforce
laws that protect consumers against deceptive, unfair, unconscionable, and/or
unlawful business practices, and they are endowed with civil and criminal
legal tools to investigate illegal misconduct by a particular company or
by an entire industry.
New York General
Business Law § 349(a) is one statutory example that
proclaims, "Deceptive acts or practices in the conduct of any
business, trade or commerce or in the furnishing of any service in this state
are hereby declared unlawful." ExecutiveLaw § 63(12) gives the Empire State's attorney general power to
investigate and issue subpoenas, even in cases where there was no actual intent
to deceive. Where representations or omissions may reasonably have misled
consumers, the NY attorney general can bring an action on behalf of the
affected consumers.
An example of an industry-wide
consumer protection investigation is NY Attorney General Eric Schneiderman's
recent probe into abuses found within the concert and sports ticket industry. Other investigations might focus instead on
a single business. Oftentimes, state attorneys general will partner each
other and/or with federal consumer protection agencies to confront systematic
problems that are widespread.
So when the National Association of
Attorneys General meets this month, its Consumer Protection Committee should
add the cultural property market to its watch list.
Photo credits: Pixabay / David Mark, Freeimages.com / Marc Dorsett, Freeimages.com / Joe Zlomec, Freeimages.com / dgood007, Freeimages.com / Bob Smith, Pixabay / Edward Lich
Text copyrighted 2016 by Cultural
Heritage Lawyer, a blog commenting on matters of cultural property law, art
law, cultural heritage policy, antiquities trafficking, and museum risk
management. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of any blog post without the
express written consent of CHL is prohibited.
