US Government Repatriates 95 Artworks Linked to Disgraced Brazilian Financier

The blue-chip collection was part of a massive money laundering scheme.

By Henri Neuendorf

The United States has seized and returned 95 artworks valued in the tens of millions of dollars that once belonged to the disgraced Brazilian banker Edemar Cid Ferreira. The founder and former president of Banco Santos, Ferreira was convicted of money laundering and crimes against the national financial system in 2006 and is currently appealing against a 21-year prison sentence.

During his tenure as president of Banco Santos, Ferreira bought dozens of works by blue-chip names including Jean-Michel BasquiatLouise BourgeoisFrancis PicabiaHenry Moore, and Anish Kapoor. In 2006, a Brazilian court found that he bought the works with illegally obtained funds from Banco Santos and ruled that they should be seized and used to repay the bank’s creditors.

But when Brazilian officials searched Ferreira’s home, storage facility, and offices in 2006, they discovered that much of the collection was missing. They have been on the hunt for them ever since.

The collection was illegally smuggled out of Brazil between November 2004 and March 2005, according to authorities. The works were shipped through the US with false documentation, inaccurate valuations, and fabricated titles to locations in Switzerland, France, the Netherlands, and the UK. (For example, when the work by Basquiat, which has been appraised at $8 million, was sent to a New York storage facility from the Netherlands, the shipping invoice stated it was worth only $100.)

Over the next 11 years, the US worked with Interpol and governments across Europe to locate the star-studded collection. Dutch authorities seized three crates containing 85 of the missing artworks from a storage facility and turned them over to US authorities; a UK-based auction house voluntarily handed over seven artworks to US law enforcement; the underwriters of an insurance policy to a company controlled by Ferreira handed over a painting by Rufino Tamayo; and an unnamed New York gallery reached a settlement to  jointly sell a painting by Helen Frankenthalerwith the Brazilian judicial administrator in a deal approved in March 2017. Most recently, a Henry Moore statue was seized by French authorities from a storage facility and handed over to US authorities this summer.

Why did it take so long to find and return the works? According to Arnoldo B. Lacayo of Sequor Law, one of the attorneys representing the Brazilian Judicial Administrator, the repatriation process was drawn out because the art was subject to complex criminal and bankruptcy cases in Brazil and the US. “The recovery process… has taken time but represents an important success on behalf of the many creditors of the Estate of Banco Santos who were hurt as a result of the illicit activity which resulted in the bank’s demise,” he says. “In short, while some of the art left Brazil as long ago as 2004, the criminal, bankruptcy and forfeiture cases only came later.”

The latest repatriation comes after the US attorney returned five works—paintings by Jean-Michel Basquiat, Roy Lichtenstein, Joaquin Torres Garcia, Serge Poliakoff, and a Roman sculpture—valued at a combined $20–30 million to Brazil in June 2015.

“These works were used to mask an audacious criminal scheme by Edemar Cid Ferreira,” acting Manhattan US attorney Joon H. Kim says in a statement. Thanks to efforts of the US attorney’s office and Homeland Security Investigations, “these treasured pieces will be returned to their rightful owner, the bankruptcy estate of Ferreira’s insolvent Banco Santos.”

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Global Restructuring Review Top 100 Law Firms Listing

Miami’s newly rebranded Sequor Law is the Chilean liquidator of bankrupt investment vehicle Onix Capital

 Global head of restructuring and insolvency  Gregory Grossman

History of the practice

Shareholders Edward Davis and Gregory Grossman launched boutique Sequor Law in April, in what was effectively a rebrand of Miami firm Astigarraga Davis’ cross-border insolvency, international asset recovery and financial fraud team.

Davis and Grossman, two of the founders of Astigarraga Davis, decided to establish the new outfit when their former firm’s international arbitration practice left to join global law firm Reed Smith.

All of the attorneys from Astigarraga Davis’ cross-border insolvency, international asset recovery, and financial fraud practice were retained by Sequor Law.

Network

Grossman heads up the firm’s international insolvency and financial litigation practice, which operates out of a solitary office in Miami.

Who uses it?

The team represents international banks, sovereign governments and government institutions, liquidators and receivers, lenders and multinational corporations, as well as individuals.

Some notable clients include Big Four professional services firm PricewaterhouseCoopers and the Republic of Trinidad and Tobago.

Historic track record

The practice, under Astigarraga Davis and Sequor Law, has made over 20 Chapter 15 filings in the US to recognise insolvency proceedings in diverse jurisdictions including Antigua, Austria, Barbados, Brazil, the BVI, the Cayman Islands, Chile, Mexico, Romania and the UK. Indeed, Grossman says the firm has filed more Chapter 15s than any other law firm in the US.

Notably, Davis and Grossman filed the first Chapter 15 bankruptcy petition in the state of Florida, on behalf of PricewaterhouseCoopers as the custodian of failed financial institution Bancafe International Barbados.

Davis also served as lead civil counsel for the government of Antigua and Barbuda in relation to an alleged fraud in the payment of debt owed to a Japanese leader that sponsored the building of the Crabbs Desalination and Power Plant in northeast Antigua.

Elsewhere, the team was instructed to represent the joint liquidators of Stanford International Bank in efforts to recover assets relating to a US $7 billion Ponzi scheme- the second largest Ponzi scheme in world history, which has seen filings in Antigua, the UK, the US and Canada.

Recent events

During our research period, Sequor Law was instructed as counsel to the court-appointed liquidator and foreign representative of bankrupt Chilean investment firm Onix Capital in Chapter 15 proceedings in Florida. The liquidator is seeking to recover assets in excess of $100 million* relating to an alleged Ponzi scheme operated by the group’s CEO, Chilean businessman Alberto Chang-Rajii.

The Sequor team also continues to act as primary US counsel to the joint liquidators of Stanford International Bank.

As it transitioned to Sequor Law, the team from Astigarraga Davis hired attorney John Silbermann from the enforcements division of the US Securities & Exchange Commission.

The complete GRR 100 guide will be accessible at http://globalrestructuringreview.com/grr-100

 

* The GRR 100 incorrectly values the Onix case as a $7.4 million dollar Ponzi scheme. The correct value of the Ponzi scheme is in excess of $100 million.

Internationally Noted Attorneys Establish Sequor Law

New Firm to Focus on International Asset Recovery, Financial Fraud, Cross-Border Insolvency and Financial Services Litigation

MIAMI – April 11, 2017 – Edward H. Davis, Jr., a founding shareholder of Astigarraga Davis, today announced the opening of Sequor Law to focus on representing clients internationally in asset recovery, financial fraud, cross-border insolvency and financial services litigation. Sequor Law’s attorneys include all members of the Astigarraga Davis top-ranked asset recovery team.

Jose Astigarraga and the other attorneys in the firm’s international arbitration practice have moved their practice to join a global law firm.

Davis and Gregory Grossman, another founding shareholder, consider this a natural next step in the development of their respective law practices.

“We are energized about the evolution of our practices. The new platform of Sequor Law will better position us to meet a growing global demand for our high-quality legal counsel,” said Davis, a certified fraud examiner who has been recognized as the Asset Recovery Lawyer of the Year for the past four years by Who’s Who Legal and who has an internationally recognized financial fraud, asset recovery and international litigation practice. “It will enable the attorneys at Sequor Law to continue building upon our unique strengths and pursue significant new opportunities in areas we excel, while also becoming more nimble in today’s ever-changing legal environment.”

Added Davis: “Sequor Law derives its name from the Latin word ‘to pursue, to chase, to attain,’ and signifies our core values: the agile, aggressive, and relentless pursuit of assets and success on behalf of our clients.”

Sequor Law’s international insolvency and financial services litigation practice is headed by Grossman. He will focus his practice on creditors’ rights, bankruptcy, insolvency litigation, and operational bank litigation.  Grossman filed the first Chapter 15 Petition in the state of Florida and is recognized as a thought leader in the use of cross-border insolvency proceedings on behalf of creditors and fraud victims.

Sequor Law’s multi-lingual team includes:

  • Annette Escobar, a shareholder and certified financial crime specialist who focuses her practice on representing insolvency practitioners in international insolvency cases
  • Arnoldo Lacayo, a shareholder, certified specialist in asset recovery, and incoming chair of The Florida Bar International Law Section who focuses his practice on international corruption investigations and asset recovery for governments and state-owned enterprises
  • Daniel  Coyle, an associate who represents creditors and insolvency practitioners in domestic and international insolvency matters
  • Nyana Abreu Miller, an associate who focuses her practice on asset recovery for women in cross-border divorce cases
  • Andrés Sandoval, an associate focusing his practice on international judgment and arbitral award collection
  • Cristina Vicens Beard, an associate focusing her practice on representing victims in the recovery of assets in cross border frauds

In addition, attorney John Silbermann, most recently with the Office of Collection in the Enforcement Division of the U.S. Securities & Exchange Commission, joins the firm as senior counsel and will focus his practice on international asset recovery.

At Sequor Law, the attorneys will continue their collaboration with ICC FraudNet, a world-class network of specialized attorneys, best-in-class investigators, and forensic accountants.

About Sequor Law

Sequor Law is a Miami-based international law firm representing financial institutions, sovereign governments and state owned enterprises, public and non-public companies, insolvency practitioners and individual clients in the areas of asset recovery, financial fraud, insolvency and financial services litigation. More information is available at www.SequorLaw.com

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