Luxury watch smuggling in Türkiye: Inside Istanbul’s tax evasion crackdown 

The Istanbul Police Department’s Anti-Smuggling and Organized Crime Branch recently executed a high-profile operation targeting luxury watch smugglers and tax evaders. The investigation, which focused on luxury watches being sold without proper taxation, revealed a complex network of high-end watch traders, including social media influencers and prominent business figures.

The case shines a spotlight on the increasing use of luxury watches in Türkiye for money laundering – a phenomenon that has been gaining attention as luxury goods become more intertwined with financial crimes. 

Police crackdown on tax evasion in luxury watch market 

The investigation began when police received tips about businesses in Istanbul engaging in the sale of luxury watches, valued at hundreds of thousands of dollars, through unofficial channels. The illicit sales were reportedly taking place without issuing invoices or paying taxes, as the payments were made in cash to avoid government scrutiny. 

The operation revealed that a number of jewelry stores and watch dealers in Istanbul’s upscale neighborhoods – especially in Besiktas, Sisli, and Kadikoy – had been selling second-hand or new luxury watches on behalf of their wealthy clients, often for substantial commissions. These watches, some of which were priced as high as $375,000, were exchanged for cash to avoid the Turkish tax system. 

• Number of watches seized: 178 

• Total value of seized watches: $4 million 

• Locations raided: Five luxury stores, including three in Nisantasi and one on Bagdat Avenue 

Tax evasion through cash transactions 

Among those who delivered the luxury timepieces to be sold at these shops were several well-known social media influencers and high-profile businesspeople. By accepting cash payments for the sales, these individuals and businesses violated the Turkish Tax Procedure Law, as the transactions were conducted without proper documentation, avoiding both income reporting and taxation. 

The police meticulously identified all involved parties – the stores, the watches, and their owners – by examining the serial numbers and ownership records of the seized timepieces. A more comprehensive investigation into potential money laundering was launched, with authorities questioning how the watches had been imported into Türkiye and whether they were part of a larger international smuggling network. 

Broader pattern: Using luxury goods for money laundering 

The operation in Istanbul is not an isolated case. The use of luxury watches for money laundering has become a growing concern across Türkiye. As previously reported, a criminal gang involved in smuggling luxury watches through Turkish airports was exposed for laundering money through the sale of high-end timepieces. This practice involves purchasing watches abroad, smuggling them into Türkiye, and then selling them for a profit to avoid taxation and legal oversight. 

Recent examples: 

• Hezbollah and luxury watches: Members of Hezbollah were recently implicated in smuggling luxury watches into Türkiye as part of a larger money-laundering scheme. 

• Brazilian Case: A similar case involving former Brazilian President Jair Bolsonaro showed how luxury watches were used to transfer wealth discreetly across borders. 

Unveiling Türkiye’s role in global watch trade 

Türkiye’s role in the international luxury watch market has been growing steadily. According to the latest reports, the sales of luxury Swiss watches to Türkiye have reached record levels. Türkiye has become a key destination for high-end timepieces, but the rapid growth of this market has also attracted criminal elements. 

Istanbul police’s operation uncovered a startling case involving a Patek Philippe watch, priced at 1 million euros ($1.11 million). This particular watch was one of only 170 in the world and had passed through the hands of a Chinese billionaire and a football player from Real Madrid before ending up in Türkiye. The final owner, a businessman involved in the livestock industry, had delivered the watch to a dealer for sale when the police intercepted it. 

• Watch model: Patek Philippe, limited edition 

• Current value: 1 million euros 

• Previous owners: Chinese billionaire, Real Madrid footballer 

• Current seller: Turkish businessman in the livestock sector 

Luxury watches as financial instruments 

This latest operation highlights the broader problem of using high-end goods, especially luxury watches, to launder money in Türkiye. The international connections of these timepieces, their high value, and their ease of transfer make them ideal vehicles for illegal financial activities. The authorities’ detailed investigation into the serial numbers and ownership history of these watches is a crucial step toward curbing this growing problem. 

As Türkiye’s luxury goods market continues to expand, so too does the risk of it being exploited for illegal activities. With over $4 million in watches already confiscated and many more investigations likely on the horizon, Turkish authorities are working to close the loopholes that have allowed luxury goods to become instruments of financial crime.