A Beginner's Guide to Buying Art: Tips and Tricks on how to Spot Stolen and Looted Art

Art heists have an undeniable mystique. People cannot help but instantly feel invested in the topic, questioning the 'hows' surrounding the incident. Most recently, in October, the Louvre parted with a collection of French Crown Jewels valued at 102 million dollars after four masked thieves entered in broad daylight.

In this particular Parisian case, the detail which intrigues people the most is how is it even possible, considering how well protected such art collections are. A museum like the Louvre has a myriad of security guards patrolling the museums at all times.  How did four thieves who used chainsaws to execute the theft manage to pack in the entire antique jewellery collection in a mere span of eight minutes and left the scene on motorbikes?

Although it is the most recent one, it is definitely not the only heist to have raised eyebrows in the history of art heists. And although many focus on the actual theft, only a few consider what happens to stolen artwork if authorities do not catch the thieves and restore the artefacts. Do thieves keep an albeit stolen but rather valuable collection of art? Do they sell it under wraps? Do they, when it comes to jewellery, break it into pieces and sell parts of it to not draw attention? Welcome to the world of money-laundering and (stolen) art. 

I. What is money-laundering in the world of art?

Due to its price flexibility and purchase anonymity, the art market is quite an appealing option for racketeers to launder money. It involves the buying and selling of art and antiquities to conceal the origins of particular objects. This article in particular explores how stolen art works are sold in the market and effectively through a  seemingly legitimate sale their monetary value is ‘cleaned’. More often than not, such objects turn out to be cases of 'looted art', referring to situations in which cultural artefacts have been unlawfully taken from their rightful owners in the context of violence. This often happens in times of conflict, war, and places with low legal scrutiny.

Back to the topic of art money-laundering, criminal associations have quite a tactful way of going about it, using many factors of the art market to their advantage. There are several freeport warehouses known in such circles, which are commonly used to store artefacts of questionable origin. In these ports, merchandise is classified as 'in transit', thereby exempting it from customs duty. Therefore, these could be seen as the 'tax heavens of the art market', so to speak, and the first step towards getting the 'illegitimate artwork' on the market. Despite certain jurisdictions, like Switzerland, attempting to regulate and effectively combat such activities, such warehouses remain in existence, for instance, the Geneva Freeport, but there are also warehouses allegedly in Singapore and Delaware. 

So how do criminals get away with selling stolen art? Usually, to put an artefact on the market  in the first place, it needs to have a certified origin. However, to conceal its identity, usually such an origin is articulated in quite a vague manner. This often raises concerns in the eyes of experts, or at least it should, in auction houses. A popular origin for such cases is 'gentleman's collection'. A quite simple yet effective example: suggesting that the artefact remained in the owner's possession, perhaps through generations. This conveys a wealthy background and status, reducing the likelihood of it being questioned.

After successfully getting the artefact into an auction house and placing it on sale, members of such a criminal organisation need to establish a market price and ensure it is sold within their own circles. This is how they effectively 'launder' the art piece through the legitimate sale and hide its illegitimate origins. However, one successful sale is not enough to dispel doubt; therefore, thereby more often than not there is a continuous chain of sales occurring inside the same criminal circle to make sure that they establish a sort of history of transfer of ownership which could pose as a legitimate history on the information sheet of the artifact deceiving authorities further, in more notable auction houses. During such a chain of sales, however, there is price inflation. Since the artwork valuation process is not per se regulated, criminal groups use it to their advantage to drive up prices at auctions, allowing them to launder quite a bit of money during the sales.

Since many regulations in jurisdictions enable anonymity during such an auction by conducting sales through persons such as agents, brokers or advisors it is all the more difficult for authorities to be able to spot such crimes. Even if the members of such organisations are quite known, involved in 'shifty business deals in the art-world' so to speak, since their identity is concealed through the transaction the illegitimate nature of the sale is not apparent.

II. Why is it challenging to combat art money-laundering

Despite authorities' continuous efforts in various jurisdictions to regulate the situation, it remains quite challenging to combat such activity due to its intravenous nature and cunning execution. A pragmatic factor is auction houses' reluctance to become involved in such matters. The stance of such auction houses is, more often than not, to do their best to rule out questionable artefacts; however, it is not within their jurisdiction to impede the sale of cultural goods. They often have quite strict house rules to conceal information about their clientele, protecting their customers' circles, which more often than not consist of high-earning, well-connected people. It is also not such a far-fetched idea to suppose that such auction houses are notorious for taking bribes and profiting from such furtive sales. For example, top New York auction houses, Christie’s and Sotheby’s, have been repetitively accused of such actions.

Subjective pricing is another factor that plays into the hands of such criminal organisations. Art dealers, curators, and experts at auction houses value the artefacts in a pretty subjective process. Even experts can be mistaken in assessing the actual value of a particular artefact if they lack key details about its origin. Often, when it comes to well-known stolen artworks reappearing in auction houses or galleries, criminals claim they are detailed replicas of the originals, thereby effectively deceiving experts during the evaluation process, who establish a price range based on false information. Usually, this is precisely why stolen art eventually finds its way into auction houses. Moreover, it could also be deemed problematic when it comes to the 'inflation of the price' due to its continuous sale within the same criminal circle. It is difficult to determine, even for staff at auction houses who are supposed to monitor compliance, whether the pricing was illegitimately inflated to allow the owners to obtain a large amount of illicit funds. 

III. Red flags: tips and tricks on how to buy art

Despite, as established previously in the article, the difficulty in spotting whether artefacts have been indeed stolen or  looted artwork, there are indeed quite a few pointers which could raise suspicions even in buyers who do not possess a certain level of expertise concerning art. The following are the most worth mentioning.

One that is quite common is that the sale needs to be conducted in cash, preferably in quite large sums. An additional eyebrow-raising factor could be that such a sale is not conducted by the owner himself but rather agreed upon through his agents or other personnel to preserve his anonymity.

During the sales it is quite peculiar if, on the other side, the purchaser does not appear to contest an especially inflated price. When the purchaser is not concerned with paying a substantially higher price than the notional value of the artwork, as determined by the initial, albeit subjective, pricing examination. Moreover, it could be suspicious if the purchaser is not interested in the artwork's provenance, despite it being quite unclear based on the information provided, and does not ask about it. Touching on provenance, after quite a few names emerged from notorious organised groups involved in art money laundering, people have started erasing specific names from the history of ownership transfers to retain the artwork's integrity. However, such missing details should be frowned upon rather than accepted. It is advisable to question it during the sale, and if not getting a plausible answer as to why such information could not be reserved, authorities should be contacted to perform a more thorough search.

IV. Enhancing protection and encouraging repatriation of stolen art: a success story of Maastricht

Despite the difficulties described above, authorities sometimes succeed, albeit not often, in identifying such intricacies and repatriating stolen artefacts to their place of origin. An example of such successful actions has been in the news quite recently: at the 2022 TEFAF art fair in our beloved city of Maastricht, authorities managed to confiscate a looted piece of art, a pharaoh-era artefact smuggled out of Egypt. As Dutch and Spanish police joined forces to investigate the case, it emerged that the sculpture was most probably stolen during the unrest of the Arab Spring in 2011 or 2012. Such a case was reported to the authorities at the art fair when one of the potential purchasers raised concerns about the artwork's uncertain origin. The tip, however, remained anonymous even after the investigation's success. The Dutch government has reportedly promised to return the artefact to its country of origin, thereby repatriating it to where it belongs as part of Egyptian cultural heritage.

V. Parting words

Art heists in the news are performing quite well in terms of the number of spectators they draw, despite the audience being invested in learning more about the heists' commissions; many do not know what happens to stolen artwork after such criminal acts. Stolen art often emerges in the most unexpected places and gets into the hands of people who are unaware of the dangers the possession of such artefacts entails. It is essential to know what the most crucial 'red flags' are to look out for when one is interested in entering the art market, promising but at the same time notorious. Combating such criminal activity is crucial to repatriate stolen or, in some instances, looted pieces of art to their place of origin, as they form part of cultural heritage.