The Art Industry and U.S. Policies that Undermine Sanctions/Section 4

by by the Permanent Subcommittee on Investigations

Layout 2

IV. ADDITIONAL U.S. DOLLAR TRANSACTIONS BY ROTENBERG-LINKED SHELL COMPANIES

While the Subcommittee investigation concentrated on certain high-value art purchases involving the Rotenberg-related shell companies Highland Business and Highland Ventures, those companies did not limit their activities to art transactions. Records indicate that the companies were also used for other purposes and conducted other transactions in U.S. dollars after Arkady and Boris Rotenberg were sanctioned in March 2014.

Between the announcement of sanctions by President Obama on March 16, 2014 and the addition of Arkady and Boris Rotenberg to the SDN list on March 20, 2014, shell companies linked to the Rotenbergs repatriated $121,966,500 to Russia. As explained below, these companies and others continued conducting transactions—including art purchases—in U.S. dollars totaling $91,554,202.30 after the imposition of U.S. sanctions on Arkady and Boris Rotenberg on March 20, 2014.

Steamort. Although the UBO of Steamort is unknown, it is clear the company served as an intermediary between Rotenberg-linked shell companies and BALTZER LLP in the purchase of art. Following the imposition of sanctions on March 20, 2014, Steamort was a part of 160 transactions totaling $22,643,828.05.^[1] The most recent transaction was dated May 15, 2017.^[2]

Highland Ventures. Highland Ventures sent $39,588,000.00 from its account at The Pictet Group in Switzerland to its Gazprombank account in Moscow on March 18, 2014, two days after President Obama announced sanctions on Russia related to its annexation of Crimea, but before Arkady and Boris Rotenberg were added to the SDN list on March 20, 2014.^[3]

Highland Ventures continued to operate in U.S. dollars through U.S.-based financial institutions post-March 20, 2014.^[4] Bank wire information shows that the company was involved in 36 transactions amounting to $16,433,804.16; most of these transactions were payments made by Highland Ventures to a variety of parties, including Steamort, Advantage Alliance, Ernst and Young, and other art galleries.^[5]

Advantage Alliance. Advantage Alliance also participated in U.S. dollar transactions through U.S.-based financial institutions following the imposition of U.S. sanctions in March 2014. From April 3, 2014 to June 6, 2016, Advantage Alliance was involved in 87 transactions totaling $29,048,139.65.^[6] Those transactions included the receipt of $16,033,224.30 and the payment of $13,014,915.35.^[7] Despite dealing in U.S. dollars, the counterparties to these transactions were not always located in the United States.^[8]

Other Rotenberg-related shell companies listed in the Panama Papers engaged in high-dollar transactions unrelated to art after March 2014.

Causeway Consulting. The Panama Papers linked Arkady Rotenberg to Causeway Consulting.^[9] An investigation by Barclays confirmed Arkady Rotenberg owned the shell company.^[10] Causeway Consulting sent $14,663,000 from its Gazprombank account in Moscow through a U.S.-based financial institution to entities located outside of the United States from January 13, 2015 to April 8, 2015.^[11]

Culloden Properties. The Panama Papers identified Boris Rotenberg as the owner of Culloden Properties.^[12] An investigation by Barclays confirmed Boris Rotenberg was the UBO for the company.^[13] Culloden Properties sent $82,378,500 from its Pictet Group account to an account at Gazprombank in Moscow on March 18, 2014, two days after President Obama announced sanctions on Russia for its occupation of Crimea, but before sanctions were imposed on March 20, 2014 on Arkady and Boris Rotenberg.^[14] Culloden sent $255,800 in two transactions on March 11, 2015 and August 12, 2015 from its Gazprombank account in Moscow to entities located outside of the United States.^[15]

Other companies linked to the Rotenbergs also continued to transact in U.S. dollars post-sanctions on Arkady and Boris Rotenberg:

Milasi Engineering. As explained above, the 2014 Financial Statement for Milasi Engineering listed Arkady Rotenberg as the UBO.^[16] Post March 20, 2014 sanctions on Arkady Rotenberg, Milasi Engineering sent $99,700 on March 13, 2015 to a shell company located in BVI.^[17]

Senton Holdings. An investigation by Barclays determined that Arkady Rotenberg was the UBO for Senton Holdings.^[18] After March 20, 2014, Senton Holdings was a part of transactions worth $8,409,930.44, with the most recent wire transfer dated June 26, 2018.^[19] The largest transfer of $7,555,000, as mentioned above, was tied to the purchase of La Poitrine by René Magritte.^[20]

---

1. DBAG0000024, line 548-707.
2. DBAG0000024, line 707.
3. DBAG0000013, lines 17-18.
4. DBAG0000013, lines 19-54.
5. Id.
6. BARC_000002, lines 23-109.
7. BARC_000002.
8. Id.
9. SGA_PSI_00063-82.
10. BARC_006124.
11. DBAG00000008, lines 3-5.
12. SGA_PSI_00063-82.
13. BARC_006068-69.
14. DBAG0000010, line 5.
15. DBAG0000010, lines 6-7.
16. BARC_006014-6043.
17. DBAG0000019, line 37.
18. BARC_006912−15.
19. DBAG0000022, lines 5−15.
20. DBAG0000022, line 5.