There is a long-running assumption by many not familiar with the art market that art is used to launder money. The accusers say the art market lacks transparency. Transparency must, they say, make it easy for bad actors to use art as a means to move money surreptitiously.

But there are at least two good reasons to doubt that art is being used to launder money. The first is that law enforcement has only the tiniest handful of cases where money laundering has used art. There are few cases where known money launderers are suspect of using art as a conduit for illicit funds.

That’s most likely because of the second reason. And it’s got nothing to do with art dealers being virtuous. Quite the contrary. Let’s see why.

The art market is difficult place to secure works that will have lasting value. Finding good works takes time and a lot of research. A money launderer is not going to waste the time and effort looking for the art that is going to be resalable. Even if the money launderer is willing to over pay for a work to be able to easily resell it in another venue, there are precious few works of art that can be secured easily that one knows will be resalable either privately or at auction.

Here’s a perfect example from the archives of the New York Times. In the mid-1980s, it was revealed that the Marcos family acquired a number of fake works of art for Imelda Marcos’s art collection:

The vast majority of works in a master painting collection of Imelda R. Marcos, including one she believed to be by Michelangelo, are inconsequential works by unimportant artists, according to the director of the Frick Collection and other art experts.

The wife of the ousted President of the Philippines paid $3.5 million to an Italian art dealer in 1983 for the purported Michelangelo, records found by the new Manila Government of Corazon C. Aquino show.

But Everett Fahy, the director of the Frick, said the painting could not possibly be by Michelangelo. Mr. Fahy said only one Michelangelo painting waa known to exist – the ”Tondo Doni” that hangs in the Uffizi Gallery in Florence, Italy.

MUCH MARCOS ART IS SAID TO BE BOGUS  (NYTimes.com)