What single biggest change would you like to see in how financial crimes in the art world are handled?
The biggest change needs to be improved vigilance in how business in the art world is transacted. The trend is to go with regulatory controls as they have been enacted in the EU, and the ongoing discussions of similar controls in the US. The bottom line is that in this sector there is a lot of value being moved with little control or responsibility. The “art world” serves to value transfer currency into works of art and antiquities with anonymity or simple masking of ownership, long term storage and ease of currency reappearing in sales with few, if any, questions. This can support, at minimum, instances of tax evasion, and at maximum the protection of revenue generated by illicit actions of all types. Add on to that the ability in the industry to provide financial “loans” against works of art and there is a very easy argument that the community acts as Money Services Businesses, which are regulated around the world. There need to be controls put in place, either by regulation or strong self-governance (I prefer the former), for elimination of willful blindness in this value transfer process.
How did you get involved in investigations?
Since I was a little kid I’ve been a fan of Sherlock Holmes. I would sneak down at 11:30 pm every Saturday night to watch Sherlock Holmes movies starring Basil Rathbone and Nigel Bruce. When I became a special agent in 1981, my wife gave me a huge poster of Rathbone in a Deerstalker cap, pipe, and staring through a magnifying glass–that is still on my wall today. Later, I was a die-hard fan of Peter Falk as Colombo and for THAT my daughter got me an autographed picture. So, I was always aiming toward this type of work, which led me to attend Northeastern University, where I graduated from the College of Criminal Justice. While there I had the opportunity to intern with the Drug Enforcement Administration for a short time, then with the US Department of Transportation Office of Inspector General. At graduation, the DOT OIG offered me a position as a special agent and I jumped at the chance. So, while many of my fellow classmates were at graduation I was at the Federal Law Enforcement Training Center. From 1981 to 2007, with a short year as a private investigator, I never regretted a day.
What is something that few people know about you?
That for a year I left my position as a special agent and tried the world of private investigations. One of my best friends was starting a business and asked me to join him. It was around the time of all the bank failures and the existence of the Resolution Trust Corporation, so I spent a lot of time working due diligence on developers applying for bank loans, some counterfeit watch sales cases, and a big bankruptcy bust-out case about a guy who ran a hardware business in New Hampshire, then ripped off a bunch of creditors and move his business to St. Croix. My very first computer forensic analysis was of this business, MacIntosh Classic computers, on a table on the balcony of the condo we were renting, overlooking the water. Other than not getting paid well, not a bad gig. After a year I came back to the government, working for the guy I had hired just before I left.
Michael Loughnane brings with him a wealth of experience in financial crime investigations. He is a former Director of Special Operations at the EPA Office of the Inspector General, whereas a special agent and senior manager he led complex procurement crime investigations, including fraud, public integrity, cybercrime, and information security investigations. He later joined Booz Allen Hamilton as a cybersecurity expert, and in 2010, became team lead in the development and delivery of CTF training programs for the DOD. Since 2016, he has delivered financial crime investigation training to law enforcement, military, intelligence, and the international AML/CTF community. Most recently, he completed work with George Mason University under a State Department grant concerning antiquities coming out of Iraq and Syria, wherein he led the effort to build a training program for foreign law enforcement. He is also a member of the Antiquities Coalition’s Financial Crimes Task Force, a multi-stakeholder initiative aimed to protect the $26.6 billion U.S. art market from criminals and violent extremists.