4 ms·

Fascinating to watch Rybolovlev move money in the open like this with the help of the art market apparatus. What a time to be alive. If you're not keeping trac

by brm 9y ago

Fascinating to watch Rybolovlev move money in the open like this with the help of the art market apparatus. What a time to be alive. If you're not keeping track this was almost double the price expected for a da Vinci of questioned provenance sold by the fertilizer magnate who bought Donald Trump's Palm Beach mansion for double the estimated price and then never lived in it.

omarchowdhury 9y ago
Wouldn't he need someone to pay that same amount or more for the painting to effectively have moved money with this apparatus? And if the next buyer is similarly motivated, isn't the valuation akin to a Ponzi?
- byebyetech 9y ago
  Ponzi scheme is a scam where buyer is fooled into buying something that has no value. Here if the painting is used as an apparatus to move money, it becomes sort of a currency to move $450 million dollars. As long as the big money movers honor its price it could be used for such purpose. Almost like Bitcoins!
  - jhulla 9y ago
    Some ideas are ancient. The painting doesn't have to move. The money doesn't have to move. We just all agree to assign it to someone else. "Because these stones are too large to move, buying an item with one simply involves agreeing that the ownership has changed. As long as the transaction is recorded in the oral history, it will now be owned by the person it is passed on to and no physical movement of the stone is required." https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones
    - wmf 9y ago
      The painting doesn't have to move. Sadly, this appears to be true. Tons of art just sits in secure warehouses like gold bars, never seen by anyone. https://www.artsy.net/article/artsy-editorial-freeports-operate-margins-global-art-market https://www.artsy.net/article/artsy-editorial-freeports-oper... (I've never heard of Rybolovlev before, but his name comes up in this article as well.)
- gowld 9y ago
  You can see some of the debate in the articles linked from here: https://www.google.com/search?q=art+market+money+laundering https://www.google.com/search?q=art+market+money+laundering
  - kawera 9y ago
    A good overview of the problem here: https://www.nytimes.com/2017/02/19/arts/design/has-the-art-market-become-an-unwitting-partner-in-crime.html?pagewanted=all https://www.nytimes.com/2017/02/19/arts/design/has-the-art-m...
- hidenotslide 9y ago
  Rybolovlev was the seller, the question is who is paying him and who did he buy it from for $127 million in the first place? At this high a price it seems more like money laundering than painting the tape, but who knows.
  - stevenj 9y ago
    It says in the article that Dmitry Rybolovlev (his family's trust to be exact) bought it from Yves Bouvier for $127.5 million in 2013, which occurred soon after Bouvier had purchased it earlier in 2013 for $80 million in a private sale via Sotheby's. Rybolovlev and Bouvier have been in a legal battle over their business dealings (including the da Vinci sale): https://en.wikipedia.org/wiki/The_Bouvier_Affair https://en.wikipedia.org/wiki/The_Bouvier_Affair If you want to read a long-form story on Bouvier (which does touch on this situation), I'd recommend this: https://www.newyorker.com/magazine/2016/02/08/the-bouvier-affair https://www.newyorker.com/magazine/2016/02/08/the-bouvier-af...
- Gargoyle 9y ago
  If you have $400 million in funds whose origin you can't account for, you move it into some opaque account to buy the painting for that $400 million. The buyer (you) remains "unknown" but now you have $400 million that you can account for, since it came from selling a painting. In the art auction world, either or both sides can remain as anonymous as they wish, which makes this whole scheme possible.
  - null0pointer 9y ago
    But how do you explain your acquisition of the $400MM painting when the taxman comes knocking?
    - ctdonath 9y ago
      You don't. Tax man cares not how you bought it, only that tax is fully paid when sold.
      - jvln 9y ago
        Is not it cheaper to pull this trick with higher number of no-name artists paintings by moving the money betweent two ofshore companies that belong to you. Therefore I believe this purchasecwas was a status purchase like yachts. It is a show off that a person has so much resources that can spend part of it on a peace of art that nobody can get.
      - mm4 9y ago
        if that was the case you might just keep the initial money and not launder them...
aaronbrethorst 9y ago
Holy shit, I totally missed that this was the Fertilizer King! That eyesore of a house was actually torn down. Back story: http://www.chicagotribune.com/classified/realestate/ct-donald-trump-mansion-and-the-russian-fertilizer-king-20170306-story.html http://www.chicagotribune.com/classified/realestate/ct-donal...
raldi 9y ago
Your summary was a little too clever for its own good, and I'm having trouble following. But I do find the idea intriguing that rare art presents a unique and seemingly-safe, almost "perfect-crime"-level opportunity for money laundering and bribery. Could you dumb it down a little? Who are you alleging was the ultimate source of this money, and what was their real objective?
- toyg 9y ago
  Even if the seller is not “in” any scheme, this could be money-laundering in action: buy an asset in cash from a seller that won’t ask too many questions, then resell it for a little bit less - voilà, clean money without losing much of it. If the seller is actually “in”, the price might actually include some sort of commission for other services of dubious nature. This happens all the time in sports and other “emotional” markets.

by brm 9y ago

omarchowdhury 9y ago

Wouldn't he need someone to pay that same amount or more for the painting to effectively have moved money with this apparatus? And if the next buyer is similarly motivated, isn't the valuation akin to a Ponzi?

byebyetech 9y ago
Ponzi scheme is a scam where buyer is fooled into buying something that has no value. Here if the painting is used as an apparatus to move money, it becomes sort of a currency to move $450 million dollars. As long as the big money movers honor its price it could be used for such purpose. Almost like Bitcoins!
- jhulla 9y ago
  Some ideas are ancient. The painting doesn't have to move. The money doesn't have to move. We just all agree to assign it to someone else. "Because these stones are too large to move, buying an item with one simply involves agreeing that the ownership has changed. As long as the transaction is recorded in the oral history, it will now be owned by the person it is passed on to and no physical movement of the stone is required." https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones
  - wmf 9y ago
    The painting doesn't have to move. Sadly, this appears to be true. Tons of art just sits in secure warehouses like gold bars, never seen by anyone. https://www.artsy.net/article/artsy-editorial-freeports-operate-margins-global-art-market https://www.artsy.net/article/artsy-editorial-freeports-oper... (I've never heard of Rybolovlev before, but his name comes up in this article as well.)
gowld 9y ago
You can see some of the debate in the articles linked from here: https://www.google.com/search?q=art+market+money+laundering https://www.google.com/search?q=art+market+money+laundering
- kawera 9y ago
  A good overview of the problem here: https://www.nytimes.com/2017/02/19/arts/design/has-the-art-market-become-an-unwitting-partner-in-crime.html?pagewanted=all https://www.nytimes.com/2017/02/19/arts/design/has-the-art-m...
hidenotslide 9y ago
Rybolovlev was the seller, the question is who is paying him and who did he buy it from for $127 million in the first place? At this high a price it seems more like money laundering than painting the tape, but who knows.
- stevenj 9y ago
  It says in the article that Dmitry Rybolovlev (his family's trust to be exact) bought it from Yves Bouvier for $127.5 million in 2013, which occurred soon after Bouvier had purchased it earlier in 2013 for $80 million in a private sale via Sotheby's. Rybolovlev and Bouvier have been in a legal battle over their business dealings (including the da Vinci sale): https://en.wikipedia.org/wiki/The_Bouvier_Affair https://en.wikipedia.org/wiki/The_Bouvier_Affair If you want to read a long-form story on Bouvier (which does touch on this situation), I'd recommend this: https://www.newyorker.com/magazine/2016/02/08/the-bouvier-affair https://www.newyorker.com/magazine/2016/02/08/the-bouvier-af...
Gargoyle 9y ago
If you have $400 million in funds whose origin you can't account for, you move it into some opaque account to buy the painting for that $400 million. The buyer (you) remains "unknown" but now you have $400 million that you can account for, since it came from selling a painting. In the art auction world, either or both sides can remain as anonymous as they wish, which makes this whole scheme possible.
- null0pointer 9y ago
  But how do you explain your acquisition of the $400MM painting when the taxman comes knocking?
  - ctdonath 9y ago
    You don't. Tax man cares not how you bought it, only that tax is fully paid when sold.
    - jvln 9y ago
      Is not it cheaper to pull this trick with higher number of no-name artists paintings by moving the money betweent two ofshore companies that belong to you. Therefore I believe this purchasecwas was a status purchase like yachts. It is a show off that a person has so much resources that can spend part of it on a peace of art that nobody can get.
    - mm4 9y ago
      if that was the case you might just keep the initial money and not launder them...

aaronbrethorst 9y ago

Holy shit, I totally missed that this was the Fertilizer King! That eyesore of a house was actually torn down. Back story: http://www.chicagotribune.com/classified/realestate/ct-donald-trump-mansion-and-the-russian-fertilizer-king-20170306-story.html http://www.chicagotribune.com/classified/realestate/ct-donal...

raldi 9y ago

Your summary was a little too clever for its own good, and I'm having trouble following. But I do find the idea intriguing that rare art presents a unique and seemingly-safe, almost "perfect-crime"-level opportunity for money laundering and bribery. Could you dumb it down a little? Who are you alleging was the ultimate source of this money, and what was their real objective?

toyg 9y ago
Even if the seller is not “in” any scheme, this could be money-laundering in action: buy an asset in cash from a seller that won’t ask too many questions, then resell it for a little bit less - voilà, clean money without losing much of it. If the seller is actually “in”, the price might actually include some sort of commission for other services of dubious nature. This happens all the time in sports and other “emotional” markets.