Verdict due in art dynasty scion’s French tax fraud case
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Verdict due in art dynasty scion’s French tax fraud case

Guy Wildenstein accused of secreting hundreds of millions of dollars of family's assets away from tax authorities

This file photo taken on September 22, 2016 shows French American art dealer Guy Wildenstein arriving for his trial over tax fraud at the courthouse in Paris. (AFP Photo/Eric Feferberg)
This file photo taken on September 22, 2016 shows French American art dealer Guy Wildenstein arriving for his trial over tax fraud at the courthouse in Paris. (AFP Photo/Eric Feferberg)

PARIS, France (AFP) — A French court will on Thursday rule in the case of Franco-American art dynasty scion Guy Wildenstein, who is accused of keeping paintings and properties worth hundreds of millions of euros from the taxman.

Prosecutors have asked for the 71-year-old to be sentenced to two years in prison and fined a whopping 250 million euros ($264 million) over what they call “the longest and most sophisticated” tax fraud scheme in modern-day France.

The silver-haired Wildenstein was one of eight defendants tried over allegations at the heart of a high-society inheritance spat dubbed “Dallas-on-Seine.”

Prosecutors accuse the family that began dealing in art in late-19th century Paris of using a web of opaque trusts and tax havens to avoid paying tax on the bulk of a multi-billion-euro estate.

French tax authorities believe the Wildensteins owe them some 550 million euros ($582 million).

Franco-American art-dealer Guy Wildenstein (right), and his lawyers leave the Paris courthouse on January 4, 2016, after the first day in the trial of several members of the Wildenstein art-dealing dynasty on charges of tax fraud and money-laundering. (AFP/Alain Jocard)
Franco-American art-dealer Guy Wildenstein (right), and his lawyers leave the Paris courthouse on January 4, 2016, after the first day in the trial of several members of the Wildenstein art-dealing dynasty on charges of tax fraud and money-laundering. (AFP/Alain Jocard)

Guy Wildenstein’s co-defendants include his nephew Alec Junior and his estranged Russian sister-in-law, Liouba Stoupakova, along with a notary, two lawyers and two offshore trusts.

The case would likely never have seen the light of day had various Wildenstein widows and ex-wives, feeling shortchanged by the clan, not lifted the lid on its business dealings.

French tax authorities believe that the Wildensteins grossly undervalued their estate to minimize inheritance taxes.

The authorities allege that on the death of their father Daniel in France in 2001 Guy and his brother Alec began hastily transferring assets abroad.

Sarkozy friend

The brothers’ stepmother Sylvia Roth later claimed she had been duped into relinquishing her share of the inheritance and successfully sued.

During the most recent trial, held over three weeks ending mid-October, the court attempted to get a clear picture of the Wildenstein estate.

Guy and Alec Wildenstein together declared just 40.9 million euros ($43.3 million) for inheritance tax purposes in 2002. To pay the bill, they handed over bas-reliefs sculpted for Marie-Antoinette, the wife of Louis XVI.

Alec, who looked after the family racehorse business, is best remembered for his messy divorce from Jocelyn Perisse, a Swiss socialite hooked on face-lifts who became known as the “Bride of Wildenstein.”

Their divorce proceedings provided a first peek inside the business affairs of the secretive Wildensteins.

In 2008, after Alec’s death, Guy declared an inheritance of $61 million — an amount seen as conservative given the family’s ownership of a trove of works by rococo painter Fragonard and post-impressionist Bonnard.

The estate also includes property, with the jewel in the crown being the game-filled Kenyan ranch that served as the backdrop for the film “Out of Africa.”

The assets were mainly registered in tax havens in a series of trusts, one of which allegedly holds paintings worth an estimated billion dollars.

During the trial Guy claimed he himself was mystified by the labyrinth tax schemes put in place by his father and older brother Alec.

He has also argued that there was no legal obligation to report trust-held assets on his father’s death.

Former French President Nicolas Sarkozy arrives at a hotel in Paris, Friday, September 19, 2014. (AP Photo/Thibault Camus)
Former French President Nicolas Sarkozy arrives at a hotel in Paris, Friday, September 19, 2014. (AP Photo/Thibault Camus)

The case has caused blushes for former French president Nicolas Sarkozy, who made Guy Wildenstein a commander of the Legion of Honour in 2009, one of France’s highest honours. Sarkozy called Wildenstein a “friend.”

The prosecution has recommended suspended sentences for Stoupakova and Alec Junior.

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