Report: Oligarchs skirt US sanctions through shady art sales

NEW YORK (AP) — Russian oligarchs have skirted U.S. sanctions through murky high-end art deals, according to a congressional report released Wednesday that urged lawmakers to rein in an unregulated industry favored by money launderers.

The secrecy of the art world — in which buyers often remain anonymous — gave billionaire friends of President Vladimir Putin access to the American economy even after the United States sanctioned them following Russia’s 2014 annexation of Crimea, the report found.

Investigators traced $18 million in art buys to shell companies linked to Arkady and Boris Rotenberg, close Putin associates who American officials say benefited financially from the Crimean annexation.

The Senate’s Permanent Subcommittee on Investigations highlighted loopholes that exempt even the most lucrative art sales from financial safeguards aimed at stopping money laundering.

Major U.S. auction houses acknowledged never asking for the true identity of the buyer, the report found, dealing with an intermediary for the sales in question “even when it was well-known that the ultimate owner was someone else.”

In all, the shell companies linked to the oligarchs moved at least $91 million through the U.S. financial system after the sanctions were imposed, the report found.

"It is alarming and completely unacceptable that common sense regulations designed to prevent money laundering and the financing of terrorism do not apply if someone is purchasing a multimillion-dollar piece of art,” said U.S. Sen. Tom Carper, of Delaware, the subcommittee's top Democrat.

U.S. Sen. Rob Portman, Republican of Ohio, said he supports legislation to lift the “curtain of secrecy” that has made the art industry a preferred vehicle of money launderers.

The Rotenbergs could not...