The market for fine art is one of the strongest in the world, and even as other markets fall, art tends to hold steady or even increase in value. It’s a perfect example of how scarcity of a commodity drives value. After all, an artist can only produce a finite number of works. But what about stolen art? It’s more common than you may think and is ultimately a lucrative and profitable endeavor for thieves.
Art: The Third Biggest Criminal Enterprise
Would you be shocked if someone told you that, behind drugs and guns, art theft is the third biggest criminal enterprise in the world? Well it’s true, regardless of whether or not it gets as much press as the others. According to the U.S. Department of Justice, the art trade is the largest unregulated industry in the world, which makes it easy for criminals to compromise (and difficult for detectives to track). No paper trail means few legitimate leads, allowing thieves to move in relative anonymity.
When someone buys a painting or sculpture, there are rarely any official transaction records. While certain auction houses may require identification and ownership records from buyers and sellers, there’s no legal requirements, deeds, or titles, to be filed or transferred. Because of this, Kris Hollington of Newsweek.com reports that there are only 16 full-time art crime officers in the United States. That’s one for every 21 million citizens.
Thieves know this, which is why they choose to target fine art. However, it’s not just the lack of regulation that attracts criminals. The black market for stolen art can prove to be lucrative, when the theft is handled the right way.
When Stolen Art is Too Famous to Sell
Rewind to the morning of March 18, 1990. A whopping 13 pieces of art were stolen from a Boston museum. Collectively valued at more than $500 million, the Gardner Heist – as it’s commonly referred to – remains the largest private property theft in history. And while the thieves still haven’t been found after more than two and a half decades, you can’t exactly call the theft successful.
The issue for the thieves was that the heist received too much press. Despite sneaking away into the guise of the early morning with Rembrandt’s “Storm on the Sea of Galilee” oil painting and other valuable works of art, the unlawful owners weren’t – and still aren’t – able to sell. And if they ever do decide to sell, it will have to be on the black market, not at Sotheby’s or some other sanctioned auction house.
But what happens when art is sold in these black markets? According to a New York Times article by Ed Caesar, “their prices are inevitably a small fraction of the works’ legitimate value.” He puts an estimate at around 7 to 10 percent of the open-market value. And while that may not seem like a lot, 10 percent of a $10 million heist could net a thief a cool seven-figure return.
Buyers, however, are rarely ignorant to the fact that they’re purchasing stolen art. In fact, some art investors target these black markets knowing full well what they’re doing. Savvy buyers follow the press and keep close tabs on the original owner’s desire and motivation to reclaim the art. Though these situations aren’t publicized, sources close to art thefts say it’s not uncommon for a buyer to purchase stolen artwork with the intentions of reselling to the original owner at a much higher premium.
“Officially, art museums and their insurers keep to a ‘we don’t negotiate with terrorists’ policy when thieves try to ransom back stolen artwork,” writes Alex Mayyasi of Priceonomics. “In practice, it seems that they quietly pay from time to time under the guise of offering a reward for ‘information leading to the return’ of stolen works of art.”
The Stable Nature of Fine Art
Thieves put so much time and effort into stealing fine art because it’s relatively easy and stable. Whereas the value of money fluctuates over time, art always seems to increase. This is especially true when national economies are healthy. As Paul Brodsky of QB Asset Management says, “The more currency in existence, the more currency chases scarce items.”
Fine art will always be seen as scarce and valuable, leading thieves to target private collections that aren’t properly secured. While it’s difficult to truly know how large the stolen art market actually is, it’s certainly bigger than most people think. Regardless of where the economy is, fine art will always be stolen and peddled on the black market – one of the strongest markets in the world.