Tuesday, December 21, 2021

Stag's Head Rhyton Manhattan District Attorney
Stag’s Head Rhyton, c. 400 BC from Milas, Turkey, site of
illegal excavations. Purchased by Steinhardt for $2.6 mil from
the Merrin Gallery in 1991. Loaned to The Met in 1993. Seized
by the DANY via judicial warrant. Currently valued at $3.5 mil.

Manhattan DA Cy Vance, Jr. signed a non-prosecution agreement with Michael Steinhardt in his last days as chief prosecutor.

What's in it, and what's not?

And why did the Antiquities Trafficking Unit not seek indictment?

In his final days as Manhattan’s district attorney, Cyrus Vance, Jr. stirred the cultural property world with the announcement of a controversial immunity deal between his office and New York hedge fund giant and philanthropist, Michael H. Steinhardt.

Steinhardt, a prolific collector of archaeological material whose name is synonymous with cultural property cases like U.S. v. An Antique Platter of Gold ("Golden Phiale") and the recently decided Republic of Turkey v. Christie’s, Inc, Michael Steinhardt, and Anatolian Marble Female Idol of Kiliya Type (“Stargazer”) will not be counted among the 17 that the NY district attorney’s antiquities trafficking team already has charged over the years. The last to be charged, in July, was a conservator for his alleged role in Subhash Kapoor’s smuggling ring.

Steinhardt, nevertheless, no longer will be able to purchase or sell archaeological material, a novel condition that prosecutors imposed to resolve the case of “IN THE MATTER OF A GRAND JURY INVESTIGATION INTO A PRIVATE NEW YORK ANTIQUITIES COLLECTOR.”

Accompanying the New York County District Attorney’s Office (DANY) non-prosecution agreement (NPA), filed on December 6, was a hefty “Statement of Facts” in which prosecutors coruscatingly advertised “the evidentiary basis for the conclusion that 180 antiquities possessed by Steinhardt currently valued at approximately $70 million, constitute stolen property under New York law.”

A supplemental press statement issued by DA Vance accused Steinhardt of having “a rapacious appetite for plundered artifacts without concern for the legality of his actions.” Manhattan's chief prosecutor severely criticized Steinhardt’s “decades-long indifference to the rights of peoples to their own sacred treasures” as “appalling,”

But Steinhardt flatly countered “that he did not commit any crimes related to his acquisition, possession, or sale of any antiquities,” a contention given weight by the Stargazer judge's conclusion—just 90 days earlier—that “found Steinhardt to be a credible witness, and [found that] Steinhardt detailed the efforts he took prior to purchasing the [Stargazer] Idol to gather more information about the history and the origins of the Idol.”

This article attempts to answer seven questions about the DANY's notable agreement with Steinhardt.

#1 What is an NPA?

A prosecution office's binding promise that it will not pursue criminal charges against a target or subject of a criminal investigation so long as the target or subject abides by conditions typically is documented in an NPA. Such agreements often are used by prosecuting attorneys to secure a person’s testimony against a more significant criminal target.

The NPA between the DANY and Steinhardt is not a witness cooperation agreement, however. Instead, it offers Steinhardt conditional immunity from prosecution for any potential wrongdoing committed over the course of 34 years of antiquities purchases, sales, and tax handling in exchange for the speedy restitution of 180 antiquities to their countries of origin.

Steinhardt’s agreement is with the DANY only, the agency that prosecutes state crimes like Criminal Possession of Stolen Property. There has been no announcement of lawyers reaching a parallel deal with the US Department of Justice (DoJ), the agency that prosecutes federal crimes like smuggling, making false statements on customs forms, or receiving stolen property in interstate commerce.

But that probably doesn't matter.

Bull's Head Manhattan district attorney
The Bull's Head investigation involved
Colorado art collectors Lynda and William
Beirwaltes, who purchased the marble object
in 1996 and sold it to Steinhardt in 2010, who
then loaned it to the Metropolitan Museum of
Art in 2017 before the DANY repatriated it to
Lebanon. The case spawned the creation of the
Steinhardt and federal authorities have wrangled before, most notably during the 1990s in the Golden Phiale case and in the Securities and Exchange Commission's Treasury notes investigation, which resulted in a $70 million settlement.

Yet it is highly unlikely that federal prosecutors would pursue antiquities-related charges against Steinhardt at this juncture given the resolution reached with NY prosecutors, and especially considering that the US Attorney's Office for the Eastern District of New York handed off its Bull’s Head investigation to the DANY in 2017. (See photo caption for more about the Bull's Head).

#2 What are the NPA's important conditions?

The terms of the NPA enjoin Steinhardt from obtaining antiquities ever again. Failure to follow this extraordinary condition—and several others—could result in prosecution. The DANY, in turn, has promised to free Steinhardt from the threat of any possible prosecution related to his decades-long antiquities collecting career.

Significantly, Steinhardt has agreed to:

  • “not acquire [as of December 3, 2021], either directly or through any assign or agent, any antiquities (defined as artifacts created before 1500 CE) for the remainder of his life;
  • “forever relinquish[] all right, title, claims to, and interest, if any, he may have under federal law or New York State law with regard to any and all [180 specifically listed] Antiquities” and not object to their repatriation;
  • “deliver [a sword, a 7-piece ivory set, and a red carnelian fish amulet] to DANY within 72 hours of locating them …;”
  • “not … make any public statement contradicting the provisions of this Agreement” unless he or his representatives “first consult with DANY to determine (a) whether the text of the proposed statement is true and accurate with respect to matters between DANY and Steinhardt; and (b) whether DANY has any objection to the statement;”
  • waive any delay of the statute of limitations or his rights to a speedy indictment and trial.

The DANY, meanwhile, has pledged to

  • “not prosecute Steinhardt for any crimes arising out of his current or prior acquisition, possession, sale, and tax treatment of antiquities;”
  • “not legally challenge the transfer, sale, gift, or bequest of [Steinhardt’s] remaining antiquities;
  • retain “the right to prosecute Steinhardt for the Antiquities” so long as “DANY determines that Steinhardt has violated any of the obligations of this Agreement.”

[Sidebar: Does the DANY's promise to forego any legal challenge to the sale of Steinhardt’s remaining antiquities infuse potential buyers with greater confidence to purchase those pieces, thereby increasing their monetary value?]

#3 What’s not in the NPA?

The DANY has not obligated Steinhardt to relinquish the Stargazer or any other artifacts that he owns or possesses beyond the 180 specified antiquities. The NPA also does not require him to admit to any of the information contained in the Statement of Fact's 167 pages (a common condition in an NPA); or to file annual reports to the DANY or, alternatively, to submit to periodic audits to confirm compliance with the NPA’s conditions; or to pay artifact repatriation costs; or to cooperate with authorities in antiquities trafficking investigations; or to testify against offenders, despite the Manhattan DA's sweeping allegation of a “sprawling underworld of antiquities traffickers, crime bosses, money launderers, and tomb raiders [that Steinhardt] relied upon to expand his collection.”

#4 Why did the DA make the NPA made public?

That was done, according to the DANY, “because of the strong public interest in the transparency of the criminal-justice process.” Moreover, prosecutors wished to reveal "[] the sheer volume of stolen antiquities currently in New York as a result of having been trafficked in the past by international trafficking networks; [] the scope of international antiquities trafficking networks that are still active; and [] the current efforts of law enforcement agencies around the globe...." The DANY correspondingly wanted "to share the results with our international partners so they may act pursuant to their official duties in their respective jurisdictions."

Also publicized were factors that DANY prosecutors consider when assessing whether an antiquity is stolen. Their publication gives notice to the antiquities trading and collecting communities in New York City—and their lawyers—that the Antiquities Trafficking Unit will scrutinize an individual, business, or institution for failing to apply basic due diligence when acquiring cultural property.

Prosecutors described these particular characteristics of stolen antiquities:
  • archaeological material that has made contact with known antiquities traffickers,
  • post-excavation photos in the hands of looters and traffickers,
  • dirt encrusting artifacts,
  • find-spot information known by non-archaeologists,
  • broken pieces orphaned from a whole piece,
  • archaeological objects sourced from an area experiencing violence,
  • unprovenanced antiquities appearing on the market following news of looting,
  • the abrupt debut of an unknown and unprovenanced hoard in the marketplace, and
  • sketchy provenance.

#5 What exactly is the Statement of Facts?

The Statement of Facts may look like a grand jury report, but it’s not. It is a prosecutor’s report. An order issued by the New York County Supreme Court permitted the DANY to summarize the grand jury's investigation, and the prosecutor's office added information that it learned on its own.

Prosecutors filed the Statement in support of the NPA. And while the NPA announced that the district attorney's “evidence would establish at trial that Steinhardt bought, sold, and otherwise dealt in antiquities, and that he knew, or should have ascertained by reasonable inquiry, that the [180] antiquities … were stolen,” in their Statement, prosecutors remarkably never wrote that Steinhardt actually knew the antiquities were stolen. They made numerous implications among the Statement's many pages, but the attorneys overwhelmingly focused attention on showing that the 180 antiquities possessed a stolen character. They did not demonstrate personal culpability through a clear offer of proof about what the actor said and did.

#6 What is written in the Statement of Facts?

In its pages, prosecutors described numerous antiquities; revealed their chains of custody through prominent dealers, galleries, auction houses, private collectors, and major museums; and named alleged criminal smuggling networks that looted, smuggled, laundered, and transferred antiquities.

Attorneys also explained the genesis of the DANY's interest in Steinhardt:
Over the course of this investigation [into the “Bull’s Head” and “Calf Bearer”], this Office learned that Steinhardt possessed additional looted antiquities at his apartment and at his Midtown-Manhattan office. As a result, this Office initiated a criminal investigation into Steinhardt’s acquisition, possession, and sale of antiquities in multiple locations in New York.

The DANY, importantly, revealed its legal thinking, offering insight about how Assistant District Attorney Matthew Bogdanos and the Antiquities Trafficking Unit that he leads respond to cultural property cases including:

“Once stolen, always stolen.”
Prosecutors highlighted this well-established legal principle in their Statement of Facts, "Once an antiquity is proven to have been stolen ... and regardless of when or where it was stolen, it can be legally seized and returned to the legal owner."

“In the business.”
The DANY likely would try to characterize Steinhardt, and those similarly situated, as "a person in the business of buying, selling or otherwise dealing in property" if it ever put him on trial for Criminal Possession of Stolen Property. Indeed, in the NPA, the district attorney's office wrote that "
the evidence would establish at trial that Steinhardt bought, sold, and otherwise dealt in antiquities, and that he knew, or should have ascertained by reasonable inquiry, that the antiquities ... were stolen."

A person in the antiquities business 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." NY Penal L § 165.55. This presumption, which is rebuttable, gives prosecuting attorneys in NY—and prosecutors in about a quarter of the states that follow Model Penal Code § 223.6(2)—a powerful tool to root out systematic fencing operations and property trafficking networks.

Unlike the search warrant application that seized the Bull’s Head, where the DANY argued that the Beirwaltes were in the antiquities business (para. 70), the DANY did not plainly assert in its Statement of Facts that Steinhardt was in the business of buying, selling, or otherwise dealing in antiquities. The Statement only implied it, reciting that "since at least 1987 Steinhardt has been acquiring and selling antiquities, totaling more than 1000 antiquities valued at more than $200 million at the time of their purchase and doubling in value since." Prosecutors also peppered language throughout the Statement to reinforce this picture (e.g., "Steinhardt's purchase," "sold to Steinhardt," "purchased by Steinhardt," "Steinhardt's acquisitions," "Steinhardt paid," "sale to Steinhardt," “tried to consign," "Steinhardt's consignment").

The Larnax Manhattan DA
The Larnax
The implication that Steinhardt was “in the business” and presumed to have knowledge was hinted in the DANY’s searing description of the Larnax matter: “Steinhardt was complaining to [HSI] Special Agent John Paul Labbat about a subpoena from this Office [in 2017] that was being served requesting provenance documentation. Scoffing at the subpoena, Steinhardt pointed to the Larnax, saying, ‘you see this piece? There’s no provenance for it. If I see a piece and I like it, then I buy it.’”

Yet the NY district attorney must be acutely aware of the federal district court’s recent observation in Republic of Turkey that Steinhardt could be characterized as “an ordinary purchaser” who had “no standalone duty to investigate [provenance of the ‘Stargazer’], even if such a duty would attach to art dealers, museums, or other commercial actors.”

“Continuing crime.”
In its Statement, the DANY asserted that NY’s criminal statute of limitations would not run out after possessing a stolen artifact for five years; it only ends once the property is dispossessed: “The crime of criminal possession of stolen property … constitutes what the law refers to as a 'continuing crime,' continuing as long as the stolen object is possessed by anyone other than the legal owner.”

The DANY accordingly floated a lifesaver to archaeologically-rich countries in the wake of Steinhardt’s win in Republic of Turkey, a case where the federal district court found “that Turkey slept on its rights, which bars recovery [of the ‘Stargazer’] under the doctrine of laches.” The district attorney’s office proclaimed emphatically that “the equitable defense of laches, i.e., that a long delay in asserting a claim has prejudiced the adverse party—often raised in civil cases—does not apply in a criminal case.”

McClain/Schultz applies.
When pursuing Criminal Possession of Stolen Property cases that involve undocumented archaeological materials, the DANY opined that a seminal federal doctrine from the Fifth and Second Circuits should apply to New York law. Citing U.S. v. McClain, 545 F.2d 988, 1001 (5th Cir. 1977), prosecutors wrote, “It is well-settled that, standing alone, wrongful exportation of an antiquity from its country of origin does not constitute a crime under New York State’s criminal law. But once a country establishes a patrimony law, its ‘declaration of national ownership suffices to render an illegally exported item ‘stolen.’’” And citing United States v. Schultz, 333 F.3d 393, 410 (2d Cir. 2003), prosecutors asserted: “Notably, this basis of theft is independent of any other basis, such as looting. This is because the illegal removal of an antiquity in violation of the applicable patrimony law does not merely violate export-restrictions but a legislative fiat that is ‘intended to assert true ownership of certain property.’”

In other words, if a nation clearly declares ownership of antiquities buried beneath the ground, legal title to those antiquities remains with the country even after they are unearthed by looters and smuggled out of the country. These archaeological objects cannot be legally transferred to a buyer—even a good faith purchaser—because they are owned by the sovereign nation. That is because “once stolen, always stolen.”

Here in the Steinhardt case, the DANY concluded that “all 180 antiquities were taken out of their countries of origin following the effective date of their respective patrimony laws.”

#7 Why didn't the DA seek a grand jury indictment?

The DANY acknowledged that "pillaging of cultural heritage and subsequent trafficking of the stolen antiquities" is "historically under-investigated and under-prosecuted...." So why seize and send the same way that federal lawyers did in the Golden Phiale case?

There are many reasons why prosecutors choose not to pursue criminal charges when they have probable cause. They may not have compelling evidence to convict. They may have too few financial or human resources, particularly in a complex case. The crime might not be a priority. The likely sentence might not justify the investment of time and effort. There may be concerns about a defendant’s age or health. The DA may want to conclude a major case before leaving office. The list goes on.

The DANY’s stated reason is “the interests of justice.” DA Vance explained in his press statement that the better course here is “a resolution that ensures that a substantial portion of the damage to world cultural heritage will be undone, once and for all.” In practice. that means “this agreement guarantees that 180 pieces will be returned expeditiously to their rightful owners in 11 countries rather than be held as evidence for the years necessary to complete the grand-jury indictment, trial, potential conviction, and sentence.”

There is no doubt that the stolen objects would have been returned without the NPA. That commonly happens in theft cases. The key term here is expeditiously.

In the event of litigation, photos possibly could be substituted if the objects were repatriated prior to trial. But that would be a herculean legal task for the prosecution to accomplish in a case like this. In any case, the DANY certainly would want to hand jurors the real evidence because tactile evidence that jury members can see, touch, smell, and hear is best. The evidence would be returned to their owners at the conclusion of the case, which could be years away.

In the present matter, the DANY suggested that it was compelled to return the cultural objects now, arguing that NY Penal Law § 450.10(5) and NY County Law § 935 “mandate the return of seized property to its rightful owner” upon request or demand. So Steinhardt's assent smooths the way toward quick repatriation.

Needless to say, several questions remain. Have any or all countries of origin formally demanded the return of the cultural objects? Would they persist with such a demand after realizing that a grand jury indictment was bargained away? And considering that the artifacts have been absent from their countries of origin for so long, would it make a difference if their return waited another few years so that cases could be pursued in court?

Notwithstanding these questions, the DANY affirmed that it "has a long tradition of promoting respect for the rule of law by bringing justice to victims of crime-no matter who they are or where they are."

DA Vance’s other stated justifications for the NPA were “to shield the identity of the many witnesses here and abroad whose names would be released at any trial, to protect the integrity of parallel investigations in each of the 11 countries with whom we are conducting joint investigations, and to avoid over-burdening resource-scarce nations who would be called upon to provide witnesses in any grand jury or trial.” All three explanations are legitimate prosecutorial objectives.

Still, one may reasonably ask: Why couldn’t the DANY just bring one or two charges forward, assuming it has sufficient evidence? Charges do not have to be brought that encompass all 180 objects from all 11 countries. Consider too that the DANY already has disclosed over five dozen named witnesses; that countries like Italy, Israel, and others among the 11 are not resource-scarce; that funds surely could be acquired to fly and lodge a handful of overseas witnesses in one or two cases; and that parallel investigations might actually benefit from revelations made from even one case placed on a trial track

[Sidebar: Is the DANY really conducting a joint investigation with Syria, one of the 11 countries, given that U.S. diplomatic relations with Syria were suspended in 2012?]

P.S. One important last question.

Will the Antiquities Trafficking Unit remain intact when newly elected Manhattan District Attorney Alvin Bragg takes office?

[UPDATE 12/23/2021: "In the event of litigation, photos possibly could be substituted" has replaced the original phrase "probably could be substituted." "Possibly" is the better word choice. That is because substituting photos in lieu of physical evidence in a case of first impression like this one, which involves unique objects that the DANY would argue are owned by foreign nations, poses significant hurdles to the prosecution.]

[UPDATE  1/3/2022: Some have wondered whether the NPA actually might be a deferred prosecution agreement. A deferred agreement contains a defined termination date in the future when a person's postponed case no longer may be prosecuted. By contrast, this agreement does not describe a postponed prosecution, and its timespan is indefinite because it does not calendar a known date. At best, it holds itself out as a lifetime agreement; but that still means the agreement lacks a date certain. (Sidebar: Indefinite agreements typically are difficult to enforce). This agreement is best labelled a non-prosecution agreement with conditions, where the prosecution has suspended its pursuit of indictments rather than deferred its prosecution to a later date.]

H/T Chasing Aprhodite for posting the NPA online here and the Statement of Facts here.

Photo credits: Manhattan District Attorney

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