Prosecutors Expose Jho Low’s Secret Schemes to Illicitly Acquire $137 Million in Art
Funds were used to buy works by Van Gogh and Monet
Following a press conference in Washington, D.C. this morning announcing a planned $1 billion asset seizure from troubled Malaysian financier Jho Low, the U.S. Department of Justice (DOJ) released detailed—and frequently mind-boggling—documents showing how hundreds of millions of dollars were inappropriately transferred from Low’s 1MDB fund, to personal accounts or unrelated business entities and in some cases, used to pay for tens of millions worth of art work.
The documents named three artworks in particular, a Vincent Van Gogh drawing, and two Claude Monet paintings that the government is seeking to seize, but there are more works named in the papers that Jho Low is seemingly connected to.
The DOJ alleges that from about May through September of 2013, funds from an account, with the title “Tanore” were used to purchase about $137 million in art. The account was said to be controlled by an associate of Low, Eric Tan—who is also reportedly under investigation by Singapore authorities—for the personal benefit of both men. Funds in the account are claimed to have been proceeds of a bond sale made by Low’s company 1MDB that were “diverted through the Tanore Account.” A spokesman for the Justice Department declined to comment on whether Tan is under investigation by US authorities.
In May 2013, Tan opened an account at Christie’s. At a New York auction that month, the fund acquired five artworks for a total of $58 million, including two at the May 13 “11th Hour” charity sale, organized jointly by Christie’s and celebrity art collector Leonardo DiCaprio to support wildlife preservation.
The works included one un-named work by Mark Ryden for $714,000 and one un-named work by Ed Ruscha for $367,500. At Christie’s postwar and contemporary evening sale just two nights later, the Tanore account was the buyer of Dustheads, by Jean-Michel Basquiat for a then-record $48.8 million; and two works by Alexander Calder, including Untitled—Standing Mobile for $5.4 million and Tic Tac Toe, for $3 million.
On June 28, Tanore purchased two works of art in a private sale arranged by Christie’s: Concetto spaziale, Attese, by Lucio Fontana; and Untitled (Yellow an Blue), by Mark Rothko, for a total purchase price of $79.5 million (the separate painting prices are not broken out in the DOJ documents).
In November 2013, after Tan reportedly asked for a Christie’s skybox with enough seating for 12 people, for sales on November 5 and 12, respectively, the Tanore account was the buyer of La maison de Vincent a Arles, a pen-and-ink drawing by Van Gogh, for $5.5 million. The DOJ document notes that a Christie’s employee emailed a colleague stating, “It better look like Caesar Palace in there. . .The box is almost more important for the client than the art.”
But Tanore had trouble making payments for the Van Gogh, according to the documents, due to concerns raised by the compliance department at the private Swiss bank, Falcon Bank.
After an email exchange—which included a dialogue about whether Tan or Low should be copied in the correspondence—Tan told Christie’s that Low had agreed to buy some of the items that Tan had acquired through private sales adding that Low could pay immediately.
The documents cite correspondence between Christie’s and Tan with agreements voiding some purchases and assigning control of payments to Low. Somewhat inexplicably at this point, the papers state that Tan wrote to Christie’s stating, “Please do not have Mr. Low in any document. I prefer just me null and void.”
In December, when a Christie’s employee transmitted related documents to Low, Low himself told the auction house: “Please remove any reference to Tanore” in the agreement.
Low ultimately bought the Van Gogh for which, the papers state, “Tanore was unable to make payment.” “He did so using money traceable to diverted 1MDB funds,” according to the DOJ.
Tan then gifted several artworks purchased from Christie’s to Low as well as to Wolf of Wall Street backer Joey McFarland. (Proceeds of the blockbuster film are also mentioned in the DOJ seizure claims).
In each case, individual letters from Tan to Low referenced each work separately with the heading: “GIFT OF ARWORK(S) AS STATED BELOW IN CONSIDERATION OF YOUR FRIENDSHIP, YOUR CHARITABLE CONTRIBUTION TO THE WORLD AND PASSION IN PROMOTING THE UNDERSTANDING AND APPRECIATION OF ART WORKS.”
In yet another bizarre twist, the closing section of each letter contained lines stating that the gifts “should not in any event be construed as an act of corruption since this is against the Company and/or my principles and I personally do not encourage such practices in any manner whatsoever.”
The DOJ papers alleged that based on Low’s presence at the auctions where Tanore bid on and acquired the art, as well as the fact that Tan subsequently gave more than $100 million in art to Low “for no consideration” (meaning for nothing in return, not even $1) is evidence of money laundering.
The papers note an that a senior vice president at Christie’s who served as a client representative for the Tanore account and Low, viewed them as “interchangeable,” and believed Low was making purchases for a corporate collection.
Monet Paintings Were Also Bought With Diverted Funds
In the case of the two Monets that the DOJ is seeking to seize, the money laundering was relatively more straightforward.
Low himself used funds “traceable” to Tanore in 2013 to acquire Claude Monet’s Saint Georges-Majeur for $35 million. The work once belonged to the Art Institute of Chicago, according to the legal papers.
Low was believed to have been the consignor of a different—though similarly titled— Monet work to a sale at Sotheby’s London this past February where it sold for a far lower $16.6 million, missing the low estimate of $17.2 million, even including the hefty premiums.
Nympheas avec Reflets de Hautes Herbes, the second Monet painting named in the government’s complaint, was purchased by Low at Sotheby’s London in June 2014 for $57.5 million (£33.8 million). Again, he used funds that were traceable to the Tanore account.
A Monet work with the same title was sold at Sotheby’s London in February 2013 for $14 million (£9 million).
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