Art collector Bernardo Paz has been convicted in Brazil of money laundering but the charges are not what anyone would have expected.
One of the oft-repeated canards about the art market is that art is regularly used for money-laundering. The perception comes from the reflexive comments of a few journalists who want to appear to be “in the know” but don’t want to actually do much in the way of reporting.
This isn’t because people in the art world are saints. Far from it. It’s because art is an inherently difficult medium to use for money-laundering especially when there are easier vehicles like real estate.
The news released over the weekend that Bernardo Paz and his sister have been charged in Brazil with the threat of jail—he for nine years; she for five—for money laundering would seem to confirm the popular idea.
But the case has an unexpected twist. Paz wasn’t using art to launder money, he was using his art foundation to funnel money secretly to his companies:
According to the statement, between 2007 and 2008, Mr. Paz received more than $98 million overseas in an account set up ostensibly to accept donations for his cultural center. Part of that money, prosecutors allege, was siphoned to Mr. Paz’s other companies.
Chinese investors bought Mr. Paz’s conglomerate, which included 29 companies, in 2010. Attorneys for Mr. Paz and his sister have said they intend to appeal the conviction. Mr. Paz has long denied allegations of financial impropriety.
Mr. Paz told the Times in 2012 that allegations of money laundering, which have dogged him for years, were a “mountain of nonsense and lies.” At the time, he expressed an ambition to vastly expand access to his 5,000-acre property by building 10 hotels and lofts for people who might want to live amid his artwork.
Creator of Brazil’s Outdoor Museum Inhotim Sentenced to Prison – (The New York Times)