News
Art market

Beaufort Securities broker pleads guilty to fraud involving art

Global money laundering scheme allegedly attempted to use Picasso to "clean up" £6.7m for undercover FBI agent

Pablo Picasso's Personnages (1965) Courtesy of Artnet Auctions

A London-based broker has pleaded guilty in New York to conspiring to commit securities fraud following a sting operation that culminated in 2018 and also resulted in the arrest of the Mayfair art dealer, Matthew Green, on suspicion of attempting to launder money through a Picasso.

Panayiotis "Peter" Kyriacou, formerly an investment manager at the brokerage firm Beaufort Securities (now in administration), was charged following an investigation into an alleged manipulative stock trading and money laundering scheme, which was run between 2014 and 2018 and proposed the sale of art as a way to "clean money".

A total of six individuals and corporate defendants were charged for varying levels of involvement in the scheme, which was reported to be worth an estimated $50m.

In the somewhat elaborate sting—spearheaded by the US Securities and Exchange Commission, with support from the UK’s Financial Conduct Authority, amongst other official bodies—an undercover agent approached Kyriacou in 2016 to open brokerage accounts for the purpose of manipulating stocks, by inflating their value and re-selling for financial gain. Court documents add that no attempt was made to report financial information to the Foreign Account Tax Compliance Act (FACTA), as required by law.

In a separate money laundering allegation, Kyriacou, with his uncle Aristos Aristodemou and Matthew Green, allegedly attempted to launder some of the proceeds through the "purchase and sale of artworks". Indeed, the 2018 indictment claims Aristodemou described the art sector as “the only market that is unregulated” and describes how the trio proposed buying and later re-selling Personagges (1965) by Picasso in order to “clean up” £6.7m for an undercover agent, which he represented as profits of securities fraud. Paperwork was drafted for the transaction, with payment due in March 2018, but the scheme was stopped by the FBI before the sale.

Kyriacou faces a maximum of 10 years imprisonment upon sentencing. Two other defendants, Arvinsingh Canaye and Adrian Baron, pleaded guilty in 2018.

Since he was charged in 2018, Green, who has yet to plead in this case, is believed to have undergone treatment for various addictions at a clinic in Spain.