Chapter 20 #2
I’m studying their demand from last month, going word by word, when my phone rings. This time, it’s Pyotr Tarasov. I stare at the screen deciding whether to pick up, or maybe I hope he’ll just get bored and go away.
Of course that will never happen. I finally answer: “Wolf.”
“I don’t like to be kept waiting,” Tarasov growls.
I don’t respond. He’s the one who placed this call. He can break the silence.
When he does, his voice is tight with annoyance. “I need an appropriate gift for Breagha Lynch. Something to mark our engagement.”
“I agreed to get you into the Canton Crew’s computers. Not to be your personal shopper.”
He giggles like a flute tuning up. “I want your painting, the one in your living room. To hang over our bed.”
He’s asking for Picasso’s Screaming Woman in Mirror, the one I bought from Fiona Moran. It’s a shattering portrait of Picasso’s much-abused first wife, and I can’t imagine a less appropriate engagement present.
“It’s not for sale,” I say.
Tarasov’s too-high laugh grates like teeth scraping the tines of a fork. “I do not intend to buy it.”
“Go to hell,” I say evenly.
“You have many other paintings,” Tarasov says. “It would be a pity if they all went up in flames.”
I wasn’t born into an organized-crime family, but I know the Baltimore bratva is famous for burning out its enemies—Molotov cocktails, gas explosions, car bombs, whatever. The painting cost me a lot—one hundred and sixty mill—but it isn’t worth dying over.
That’s a lesson I absorbed in Shannon’s womb: You walk away when the mark gets too smart, when the cops come too close, when your life or your limbs are literally at risk.
But there’s another lesson Shannon taught me: Greed makes smart men stupid.
A plan begins to simmer. On the one hand, Tarasov wants my Picasso without paying a cent. On the other, I need one hundred and twenty million dollars to pay off my blackmailer. If I play things right, one of my problems can solve the other.
Like any good sportsman, I cast out my line, checking to see if the fish are actually biting today.
“Fine,” I say, sighing with mock reluctance.
“I’ll hand over the painting. But you and I both know you won’t keep it.
Remember what the IRS did to Al Capone. Make sure you set aside funds now for the tax you’ll owe. ”
“Tax?”
There. That’s enough interest for me to play out the line.
“I bought it for one sixty, and I should have paid ten mill to the state. You can expect the same. More if you hold it a few years, so the value goes up.”
He noses at the bait. “You should have paid…”
“I bought the Picasso at Diamond Freeport.”
“What is Diamond Freeport?” He’s suspicious. As he should be.
“A tax haven. In Dover, Delaware. They have special status so all transactions at the freeport are tax-free. I buy and sell all my paintings there.”
I wait. He has all the facts he needs. I give him time to study my baited hook.
“You will give me the Picasso at the freeport,” he finally says. And then: “You have other paintings at the freeport?”
As Shannon always said: Greed. And I worried Tarasov would be a difficult fish to land…
“I do,” I say, making my voice wary. “Just last week, I took possession of three new works.”
“I will take them too, when I take my Picasso.”
“You—” I start, as if I’m furious. He doesn’t even care about the artists. His goal is to humiliate me.
The feeling’s mutual. My hook is set. Time to play out the line a little. “Wait,” I say. “How much do you know about taxation of art?”
“Enough to take your paintings.”
“If I hand over all four, we both get hit by Section 918.”
“Section 918?”
“Check with your obshchak.” The bratva’s treasurer would warn him off my budding con in one minute flat.
But I have to make Tarasov trust me. Suggesting he consult with his own man is a vital barb for the hook I’m setting.
Go ahead. Bring in your own expert. I have nothing to hide here.
“Or maybe your pakhan,” I add helpfully.
“Your father might want to be involved with a deal of this size.”
“I am a brigadier in the Tarasov bratva. I do not need my father to take your fucking property.”
Even though he can’t see me, I show my palms as I shrug.
Physically protesting my innocence lends the right tone to my voice as I say, “Look. You aren’t leaving me any options.
But given the freeport’s Section 918 status and Interpol’s reporting requirements for multi-work sales under the Geneva Compact, I just assumed… ”
It’s garbage, all of it. There isn’t a Section 918, and Interpol doesn’t require reports on art sales. If there is a Geneva Compact, it has nothing to do with the taxation of art because I’m making this up on the fly.
But Tarasov has already backed himself into a corner, saying he won’t check with his bratva moneyman. Now he pushes with all the aggression I anticipated. “You assumed what?”
“That you’d want to exercise the one-time single-transaction safe harbor. Then I don’t get hit with 338(b) penalties, and you can avoid the capital gains for my collection’s stepped-up value…”
That’s the trick to working a good con—weaving in the familiar with the unfamiliar. Tarasov has certainly heard the terms capital gains and stepped-up value, even if he doesn’t understand the rest of the gibberish I’m spewing.
“Wait!” I say, like I’ve just figured out something. “You were going to use Section 234 instead…” I pause, forcing myself to count to ten.
“Remind me of the details,” Tarasov says before I get to five. “About Section 234.”
“Section 234 transfers are exempt. If we establish fair market value, the three additional paintings would offset the capitalized basis of the Picasso. The buyers just have to hold their works for a year and a day to secure their above-the line deduction. Once their marginal tax rate maxes out at one percent, the bonus depreciation carries over because of the freeport’s non-cash status.
” I stop spinning out nonsense and pause for a full breath.
“All you need are three men you trust to hold your property for a year.”
“I have three men.” Tarasov sounds unhappy. It’s time to feed him something simple, something he’s sure to understand.
“Any Section 234 transfer will do. But an auction’s the easiest to pull off in one week.”
“One week.” Tarasov holds fast to the words. He understands the concept of one week.
“The transfer window,” I say, as if I’m jogging his memory. “Before the wash-sale regulations kick in.”
“My men must buy your paintings at auction by no later than next Monday.”
“Exactly.”
“And your freeport? It can handle this sort of auction?”
“It’s the best in the country.”
“Then do it,” Tarasov says.
“One week from today,” I promise. “Next Monday.” I give him the freeport’s address and tell him I’ll get back to him with a specific time.
I’ll lose the Picasso, but it was gone the instant Tarasov called to strong-arm me.
But now, given his greedy gullibility, I’ll end up with something far more valuable.
I’ll have the money to pay off my blackmailer.
And after a year and a day, when Tarasov tries to sell my other three paintings, he’ll discover the true cost of engaging in business transactions he doesn’t understand.
I can be patient. This is all part of making him pay for the name he called Kate. He’ll suffer. And then he’ll die.