Asset Search Blog : Asset Search & Hidden Assets : Lawyer & Attorney Fred Abrams : Tax Fraud, Asset Investigations

The July 4th "Asset Search News Roundup" concentrates on Rudolf Leopold and cross-border activities:
 

1. Austrian museum director and art collector Rudolf Leopold died on Tuesday, as pointed out by both the Associated Press and the New York Times.  According to the Copyright Litigation Blog's July 2nd article, Mr. Leopold's death basically raises the issue of Austria's willingness to return Nazi-looted art, the subject of Holocaust-era art restitution claims.
    
    
2. "Tracking Trevor Cook's Assets Across U.S.-Swiss Borders" highlights how one particular Ponzi schemer could have used cross-border elements to launder criminal proceeds. The "Egmont Group" case study which follows, similarly demonstrates the use of cross-border elements, (i.e. multiple jurisdictions), by human traffickers and / or terrorist financiers.

 

Copyright 2010 Fred L. Abrams

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Holocaust-era assets and securities fraudster Trevor Cook are the focus of this week's "Asset Search News Roundup":
 

1. An April 21, 2010 Bloomberg.com article explained that Berlin's Free University went live with its website about Holocaust-era assets / "degenerate" art confiscated by the Nazis.  "During A War Everybody Loots A Little Bit", earlier mentioned that as much as 20 percent of Europe's art is thought to have been looted by the Nazis.
   
    
2. At "Hopes of cash stash dashed in Minneapolis money manager Trevor Cook case", the Minneapolis Star Tribune reported about a failed meeting between securities fraudster Trevor Cook and Cook Receiver R.J. Zayed.  As explained by "Interdicting A Ponzi Schemer's Assets", Receiver Zayed is trying to recover Cook Receivership assets.  The Receiver's comments about his meeting with Mr. Cook, can be read below.

 

 

Copyright 2010 Fred L. Abrams

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The plaintiffs' complaint in Grosz v. The Museum of Modern Art had alleged that The Museum of Modern Art (MoMA") was the wrongful transferee of three Holocaust-era paintings.  The Court's Order dismissed this contested provenance complaint last month on the ground that the complaint was barred by the statute of limitations. 

Since the Grosz complaint was dismissed, attorney Raymond Dowd filed a Notice of Appeal on behalf of the plaintiffs.  Mr. Dowd will also be lecturing on March 24, 2010 at Sotheby's Institute of Art where he will present "Egon Schiele's Dead City: Current Issues in Nazi Art Looting and Recovery".

Perhaps more interesting than the dismissal of the Grosz complaint, are the historical letters discussed by Grosz.  The following letters for example, were respectively mentioned during Grosz, at ¶¶39 & 48 of plaintiffs' June 23, 2009 Declaration of Jonathan G. Petropoulos:  

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Holocaust-era assets and Mutual Legal Assistance Treaties are the subjects of this "Asset Search News Roundup":

1. My article "During A War Everybody Loots A Little Bit", discusses Nazi-looted art.  A December 1, 2009, press release also raises this issue.  The December press release explains that U.S. authorities recently recovered a painting in a Holocaust-era assets case.  The "Jeune Fille à la Robe Bleue" painting depicted below, had been looted from a Jewish family that fled Belgium during WWII.  A Long Island, N.Y. gallery owner ultimately cooperated in the painting's forfeiture.
   
   
   
   Image: U.S. Immigration and Customs Enforcement
    
   
2. Mutual Legal Assistance Treaties are sometimes used to locate assets that are parked or hidden offshore.  A Swiss prosecutor proceeded in Florida last month under such a treaty in The Matter of Jarred Kaplan, 2:09-mc-00040-UA-DNF.  As outlined by a memorandum of law, the prosecutor sought to interview a possible witness in Florida pursuant to The Treaty for Mutual Assistance in Criminal Matters, May 25, 1973, United States-Switzerland, 27 U.S.T. 2019, T.I.A.S. 8302.  This suspected witness was believed to be related to the purchase of a watch stolen from Watchmaker's Watch Center in Lugano, Switzerland on September 11, 2008.

Copyright 2009 Fred L. Abrams

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Holocaust-era assets and drug-related assets are both covered by this "Asset Search News Roundup": 

*My article "Searching For Nazi-Looted Art" described the Holocaust-era assets / contested provenance case of Bakalar v. Vavra, Index No. 05-CV-3037 (S.D.N.Y.).  The trial court in Bakalar rejected the claim that Egon Schiele's "Seated Woman With Bent Left Leg (Torso)" was Nazi-looted art ransacked during the Holocaust from Austrian-Jewish entertainer Fritz Grunbaum.  Bakalar, is now on appeal in the Second Circuit of the U.S. Court of Appeals and there was an oral argument in it on October 9, 2009.

 **"Interdicting The Assets Of Mexico's Narco-Traffickers" included a U.S. Treasury Office of Foreign Assets Control link chart and press release from October 2008.  This link chart and press release basically indicated that Telesforo Baltazar Tirado Escamilla was subject to sanctions under the Foreign Narcotics Kingpin Designation Act (21 U.S.C. § 1901-1908, 8 U.S.C. § 1182) and Executive Order 12978 of October 21, 1995.

Telesforo Baltazar Tirado Escamilla was sanctioned for supposedly using his "Productos Farmaceuticos Collins" company to supply the Mexican narco-trafficking Amezcua Contreras Organization with the precursor materials for methamphetamine production.

The Office of Foreign Assets Control recently claimed via its September 2009 link chart and press release, that Telesforo Baltazar Tirado Escamilla had attempted to evade the sanctions.  He is accused of evading the sanctions by using "key front individuals", as the September 2009 link chart reveals:

Link Chart: U.S. Treasury Office Of Foreign Assets Control

Copyright 2009 Fred L. Abrams

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The criminal conviction of former Taiwanese President Chen Shui-bian; the death of suspected Ponzi schemer Danny Pang; and the dismissal of a Holocaust-era assets case; are the subjects of this week's "Asset Search News Roundup":

•  Former Taiwanese President Chen Shui-bian's arrest was discussed in the November 19, 2008 "Asset Search News Roundup".  As the New York Times and / or the BBC reported, former President Chen Shui-ban has now been convicted of public corruption charges and for hiding monies by laundering them through foreign financial accounts in Switzerland.

• "No apparent foul play in financier Pang's death" from Reuters, provided information about the circumstances of Mr. Danny Pang's death.  As my May 4, 2009 "Asset Search News Roundup" explained, Mr. Danny Pang had been arrested for the suspected structuring of deposits, in violation of 31 U.S.C. §5324.  He was additionally accused of defrauding investors out of hundreds of millions during a Ponzi-like securities fraud.

• On August 11, 2009 a New York appellate court decided Schoeps v Andrew Lloyd Webber Art Found. (2009 NY Slip Op 06155).  The August 11th decision, affirmed the trial court's dismissal of the Holocaust-era art restitution claim brought by Mr. Schoeps in Schoeps v Andrew Lloyd Webber Art Found. (2007 NY Slip Op 52183 {U}). 

Raymond Dowd, Esq. who spoke at the June 2009 Holocaust Era Assets Conference in Prague, analyzed the August 11th decision in "German and Other Foreign Heirs in New York: Standing To Sue Clarified In Andrew Lloyd Weber Picasso Case". 

As my April 30, 2009 article "Holocaust-Era Art Restitution Revisited" stated, Mr. Schoeps was also a party to another art restitution case.  In Schoeps v. The Museum of Modern Art, et. al., Index No. 1-07-CV-11074, Mr. Schoeps had argued that he was entitled to restitution of the two Picassos, “Boy Leading a Horse” & “Le Moulin de la Galette”.

Copyright 2009 Fred L. Abrams

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"Goering Hoards Nudes, Jingles Emeralds in Catalog of Looted Art", quotes Reichsmarschall Hermann Goering as having said: "During a war everybody loots a little bit".  The May 28, 1945 Time Magazine article "Art: Goring's Beauties", valued Goering's collection of Nazi-looted art at $200,000,000. 

Here is a June 9, 1945 photograph of part of that art collection recovered from Goering, as it was being cataloged and temporarily stored near Berchtesgaden in the German Bavarian Alps:  

  Photo: National Archives and Records Administration

  

Since more than 20% of Europe's art is believed to have been looted by the Nazis, it is no surprise that Holocaust-era art restitution cases continue to this day.  Articles I have written about these cases include:

*Searching For Nazi-Looted Art

*Mr. Curt Valentin's Nazi-Looted Art

*Holocaust-Era Art Restitution Revisited

*Laundering Holocaust-Era Loot?

*Asset Search News Roundup: June 25, 2009

Copyright 2009 Fred L. Abrams

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On October 6, 2008 I wrote that an asset search  / investigation focusing on Nazi-looted art could culminate in a Holocaust-related art restitution case.  Holocaust-era art restitution cases are also going to be discussed at the "Holocaust Era Assets Conference", which starts tomorrow.  This conference is being held in the Czech Republic and  Nobel Laureate Elie Wiesel will be one of its attending delegates. 

"US lawmakers press Poland, Lithuania, on Holocaust assets" additionally explains that twenty-five U.S. legislators, (some of whom are delegates of the conference), have just executed letters in favor of restituting property stolen by the Nazis.  In New York meanwhile, the Museum of Modern Art recently moved to dismiss the Holocaust-era art restitution case of Grosz v. The Museum of Modern Art. 

As I mentioned in "Laundering Holocaust-Era Loot?", Grosz is about three paintings possessed by The Museum of Modern Art since the 1940's and 1950's.  The plaintiffs' amended complaint in Grosz, alleges that the three paintings had been stolen from expressionist and Dadist painter George Grosz, due to Nazi persecution. 

Also according to plaintiffs' amended complaint: "the greatest art looting in history occurred during the reign of the National Socialists ('Nazis') in Germany (1933-1945)". (Amended Complaint, at p. 2 ¶4).  Some of this Nazi-looted art is in fact, pictured below.  It had been hidden at a church in Ellingen, Germany and was discovered in 1945 by troops of the U.S. Third Army.

 Photo: National Archives and Records Administration

Copyright 2009 Fred L. Abrams

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In Grosz v. The Museum of Modern Art, the plaintiffs allege that The Museum of Modern Art (MoMA") acquired three Holocaust-era paintings which had been stolen from expressionist and Dadist painter George Grosz.  These particular paintings have been possessed by MoMA since the 1940's or 1950's and are: "Republican Automatons", "Self-Portrait with a Model" and "Portrait of the Poet" a.k.a. The Poet Max Herrmann-Neisse.  The collective value of these paintings could be as much as $10 million, according to "German painter's heirs suing MoMA". 

The complaint in Grosz alleges that George Grosz was the first artist designated as an 'enemy of the state' by the Nazis. (Complaint at p. 3 ¶ 7).  Subsequent to their confiscation, some of his paintings had even been displayed in Munich at the Nazi's infamous 1937 "Degenerate Art" exhibition.  The complaint also essentially claims that George Grosz had been the victim of both Nazi persecution and unscrupulous art dealers who had laundered the title of  "Republican Automatons", "Self-Portrait with a Model" and "Portrait of the Poet". (Id., at p. 6  ¶ 13)  (paintings' true beneficial ownership obscured by sham transfers, "multilayered" deceptions, etc.).

The complaint for example, alleges that Dutch art dealer Carel van Lier, had stolen Grosz's "Self-Portrait with a Model" and "Republican Automatons" and had "sanitize[d]" (i.e. laundered) their title via a 1938 sham transfer to himself.  (Id., at p. 28 ¶138 & p. 6 ¶12).  The complaint similarly claims that "Portrait of a Poet" was stolen by the Nazis and then "flipped" to MoMA via N.Y. art dealer Curt Valentin.  (Id., at p.17 ¶76).  Allegations at page 13 ¶¶54 & 55 of the complaint also suggest that Mr. Valentin was possibly used by MoMA's then vice president and director Alfred H. Barr, Jr., as the nominee purchaser of Nazi-looted art at Galerie Fischer in Lucerne, Switzerland in 1939. 

MoMA is next expected to file its response to the Grosz complaint by June 4, 2009.  As my post "Holocaust-Era Art Restitution Revisited" however recently indicated, Mr. Valentin had in fact transferred Nazi-looted art to MoMA.  A June 30, 1942 letter from MoMA to U.S. authorities additionally suggests that MoMA had an especially good relationship with Mr. Valentin.  In this letter, MoMA / Aflred H. Barr, Jr. asserted that Mr. Valentin was loyal to the U.S. and "devoted to democratic ideals": 

Copyright 2009 Fred L. Abrams

(Last Edited October 10, 2009)

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"Germany Rejects Call for End to Restitution of Nazi-Looted Art" and "An End to Restitution of Nazi Looted Art?", raise the issue of Holocaust-era art restitution.  The upcoming "Holocaust Era Assets Conference" in Prague on June 26-30 2009, will of course also deal with the very same thing. 

Furthermore, Holocaust-era art restitution cases often focus on documents that help explain how artwork may have been transferred or alienated from its owner.  One such document was included in a link at my post "Mr. Curt Valentin's Nazi-Looted Art ".  This particular document revealed that former N.Y. 57th Street art gallery owner Curt Valentin was permitted by Nazis to transfer Holocaust-era artwork.  Said document is reproduced below: 

As "Mr. Curt Valentin's Nazi-Looted Art" also mentioned, Mr. Valentin had undeniably provided Nazi-looted art to The Museum of Modern Art ("MOMA") on April 13, 1939.  This particular transfer of loot is demonstrated by the webpages of MOMA's own "Provenance Research Project".  These webpages indicate that Mr. Valentin's April 13, 1939 transfer of Nazi loot involved: Andre Derain's "Valley of the Lot at Vers"; E. L. Kirchner's "Street, Berlin"; Paul Klee's "Around the Fish"; and Henri Matisse's "Blue Window".

MOMA meanwhile, filed a complaint along with The Solomon R. Guggenheim Museum over other Holocaust-era artwork, in Schoeps v. The Museum of Modern Art, et. al., Index No. 1-07-CV-11074. In Schoeps, the museums asserted their complaint for declaratory relief against the heir of the original owner of  the two Picassos, “Boy Leading a Horse” & “Le Moulin de la Galette”.  Based on the complaint, this particular heir had no valid claim to the Picassos, which the museums respectively possessed.  This was allegedly true because a February 8, 1935 German will mentioned that the Picassos' original owner had given the PIcassos as a wedding gift to his wife in 1927. 

Mr. Schoeps contrarily asserted via his amended counterclaim attached hereto at part 1, part 2 & part 3, that the original Jewish owner had never actually made a 1927 gift of the Picassos.  The amended counterclaim alleged that the Nazi-era provenance of the Picassos was highly suspect.  As an heir of the Picasso's original owner, Mr. Schoeps argued that he was entitled to restitution of the Picassos.  As a museum press release and Bloomberg.com however mentioned, the case was settled and Mr. Schoeps agreed to permit the two museums to keep the Picassos.

(Last edited February 19, 2010)

 Copyright 2009 Fred L. Abrams

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As I mention at "Searching For Nazi-Looted Art", the most challenging asset searches / investigations can be those in a Holocaust-related art restitution case.  The October 30, 2008, Minneapolis Star Tribune article "MIA sends Nazi 'loot' home to Paris", suggests the very same thing.  It explains that the Minneapolis Institute of Arts engaged in ten years of detective work about Fernand Leger’s “Smoke Over Rooftops".  The Star Tribune article advises that "Smoke Over Rooftops" was recently returned to its claimants in Paris, as Nazi-looted art.  Also according to the article, "Smoke Over Rooftops" was purchased in 1951 from New York art dealer Mr. Curt Valentin and his Bucholz Gallery.

Although Mr. Valentin passed away in August 1954, he is portrayed in a number of different ways.  The above-mentioned Star Tribune article reports that Mr. Valentin's "role in the transfer of modern art out of Europe is ambiguous at best".  A biographical note at the Museum of Modern Art's "Curt Valentin Papers" meanwhile, states that Mr. Valentin was "widely respected as one of the most astute dealers in modern art...".  Time Magazine even published "Domesticated Chisels" on January 13, 1941, which was about Mr. Valentin's Bucholz Gallery formerly on 57th Street in Manhattan.  In it, Mr. Valentin said: 'Gallery business is sometimes fun, but I hate having to make money'. 

The 1994 New York Times letter to the editor "Nazi Loot Found Its Way to New York's Modern Museum", however, alleges that MOMA concealed its direct purchase of five antiquities at a Nazi auction in Lucerne, by using Mr. Valentin / the Bucholz gallery as a middleman.  Of these five antiquities, MOMA's Provenance Research Project identifies four of them as Nazi-looted art which was acquired on April 13, 1939, from Mr. Valentin's Bucholz Gallery: 

1. Andre Derain's "Valley of the Lot at Vers";
2. E. L. Kirchner's "Street Scene";
3. Paul Klee's "Around the Fish";
4. Henri Matisse's "Blue Window". 

During one Holocaust-related art restitution case, I too learned all about Mr. Valentin.  In that particular case, documentary evidence demonstrated that Mr. Valentin was granted Nazi permission to sell art in America.  Among the attached documents for example, is a translated copy of a November 14, 1936, Nazi permission letter sent to Mr. Valentin.  U.S. authorities also acted in 1944 pursuant to the Trading With The Enemy Act and seized art  belonging to Mr. Valentin's Bucholz Gallery.  Said art was seized on the ground that it was beneficially owned by a German enemy national.

Copyright 2008 Fred L. Abrams

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Perhaps most challenging, are asset searches and / or investigations seeking to uncover Nazi-looted art.  Such searches can ultimately end up in the filing of a Holocaust-related art restitution case.  As suggested at the article "Thousands of Nazi-Looted Works Are Held by Museums, Survey Says", lawyers, auction houses, genealogists and art detectives, may all have roles in these cases.  Even with all of the foregoing, parties to a Holocaust-related art restitution case still face a difficult litigation.

The Plaintiff in Bakalar v. Vavra, Index No. 05-CV-3037 (S.D.N.Y.) for example, essentially claimed that he had purchased Egon Schiele's drawing "Seated Woman With Bent Left Leg (Torso)", in good faith.  According to Plaintiff, the Schiele drawing once belonged to Austrian-Jewish entertainer Fritz Grunbaum.  Fritz Grunbaum's sister-in-law Mathilde Lukacs, had supposedly sold the drawing in 1956 to art dealer Eberhard Kornfeld at Galerie Gutekunst & Klipstein.  That very same year, Galerie Gutekunst & Klipstein next sold it to New York's Galerie St. Etienne-- where it was finally purchased by Plaintiff in 1963.  Stated differently, Plaintiff argued that the Schiele drawing was lawfully purchased and had never been stolen by the Nazis. 

Defendants contrarily argued that the drawing was Nazi-looted art which had been ransacked from the Vienna art collection of their long-deceased relative, Fritz Grunbaum.  Defendants specifically alleged that Eberhard Kornfeld had never acquired the Schiele drawing from Mathilde Luckas and that they were therefore entitled to contest its provenance.  Defendants made these and many other arguments in their closing statement, which they presented via PowerPoint at trial.  The Court's September 2, 2008 Opinion and Order however, ruled against Defendants' art restitution claim by concluding that Plaintiff held lawful title to the Schiele drawing.

Copyright 2008 Fred L. Abrams

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