Page:2020-07-29 PSI Staff Report - The Art Industry and U.S. Policies that Undermine Sanctions.pdf/14

 Information released in 2016 from the law firm of Mossack Fonseca—known as the "Panama Papers"—linked the Rotenbergs to certain shell companies involved in high-value art purchases reviewed by the Subcommittee. The Panama Papers included an email chain made public that listed nine shell companies in the British Virgin Islands ("BVI") linked to Arkady, Boris, and Igor Rotenberg. That email copied attorney Mark Omelnitski and identified Igor Rotenberg as the UBO for Highland Business Group Limited ("Highland Business") and Boris Rotenberg as the UBO for Highland Ventures Group Limited ("Highland Ventures").

Mark Omelnitski is a London-based attorney linked to the Rotenbergs and art advisor Gregory Baltser. Mr. Omelnitski—through his company the Markom Group—assisted the Rotenbergs in establishing and maintaining shell companies. He also assisted art advisor Gregory Baltser in establishing his art agency BALTZER in Moscow. In discussions Mr. Baltser had with Sotheby's and Christie's about partnering with BALTZER, Mr. Omelnitski served as Mr. Baltser's attorney and also represented that he administered Mr. Baltser's AML and sanctions policies as his Money Laundering Reporting Officer.

Both Highland Business and Highland Ventures received funding from companies linked to Arkady Rotenberg. Highland Business received funding from Advantage Alliance Ltd ("Advantage Alliance"), which an internal bank investigation linked to Arkady Rotenberg. Highland Ventures received over $124 million in funding from Milasi Engineering Limited. The 2014 Milasi Engineering Financial Statement listed Arkady Rotenberg as the ultimate beneficial owner of the company.

Gregory Baltser is a Moscow-based art advisor who facilitated art purchases linked to the Rotenbergs. Mr. Baltser purchased art in the United States with funds that the Subcommittee traced back to Highland Business and Highland Ventures. Prior to the implementation of sanctions on Arkady and Boris Rotenberg in March 2014, the funds Mr. Baltser used to purchase certain art followed a pattern: Highland Business wired the funds to purchase the art to Steamort Ltd ("Steamort"). Steamort then wired the funds from its bank account in Estonia to the auction house and took title to the art.

Steamort's UBO remains unknown. In 2012, Christie's questioned Mr. Baltser about the ownership of Steamort, a company formed in Belize. Mr. Baltser told Christie's that he did not know and could not provide the name of the owner. After Christie's threatened Mr. Baltser would be unable to bid at an auction unless he identified the owner of Steamort, Mr. Baltser told Christie's the UBO for Steamort was "Luisa Brown." Christie's accepted this verbal assertion and cleared Mr. Baltser to bid in the auction. Mr. Baltser never