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France

French judge clears billionaire art mogul Wildenstein of tax fraud

© Family patriarch Guy Wildenstein, 70, was on trial for tax fraud and money laundering in a multi-generational inheritance squabble worthy of a soap opera.

Video by Anca ULEA

Text by NEWS WIRES

Latest update : 2017-01-12

The Franco-American patriarch of the Wildenstein art-dealing dynasty was cleared Thursday by a Paris court of massive tax fraud, in a long-running saga sparked by family battles that had gripped high society watchers.

The court said there was a "clear attempt" by Guy Wildenstein and seven co-defendants to conceal art treasures and properties worth hundreds of millions of euros from tax authorities.

But shortcomings in the investigation and in French legislation on tax fraud made it impossible to return a guilty verdict, presiding judge Olivier Geron said.

The "powerful and the poor" have an equal right to justice, he told a packed courtroom.

Wildenstein, 71, and other members of one of the biggest art-dealing families of the 20th century were accused of using a web of opaque trusts and tax havens to avoid paying tax on the bulk of a multi-billion-euro estate.

The allegations first surfaced over a decade ago when various Wildenstein widows and ex-wives, feeling shortchanged by the clan, began lifting the lid on its business dealings.

French tax authorities claimed the Wildensteins owe them some 550 million euros ($580 million) in unpaid inheritance taxes between 2001 and 2008.

Wildenstein's nephew Alec Junior, his estranged Russian sister-in-law, Liouba Stoupakova, a notary, two lawyers and two offshore trusts were also tried over their alleged role in the suspected fraud.

None of the Wildensteins were in court for the ruling.

Guy Wildenstein's lawyer Herve Temime said his client was "very relieved" by the verdict.

'Dallas-upon-Seine'

After a three-week trial last year, dubbed "Dallas-upon-Seine", prosecutors had called for the silver-haired art dealer to be given a two-year prison term and 250 million euro fine for what they called "the longest and most sophisticated" tax fraud in modern-day France.

The Wildensteins have roots in eastern France but during World War II part of the clan fled to New York, where Guy was born.

French authorities alleged that on the death of their father Daniel in France in 2001, Guy and his brother Alec began hastily transferring assets from New York to Switzerland.

The brothers together declared just 40.9 million euros in France for inheritance tax purposes in 2002. To pay the bill, they handed over bas-reliefs sculpted for Marie-Antoinette, the wife of Louis XVI.

Their stepmother Sylvia Roth later claimed she had been hoodwinked by the pair into relinquishing her share of the inheritance and successfully sued.

The Wildensteins argued that there was no legal obligation at the time in France to report trust-held assets.

On Thursday, the Paris court expressed "astonishment" that French lawmakers waited until 2011 to pass a law on the taxation of trusts.

Alec, who ran the family's thoroughbred horse breeding business until his death in 2008, is best remembered for his messy divorce from Jocelyn Perisse, a Swiss cosmetic surgery devotee.

Their divorce proceedings in the late 1990s provided a first peek inside the eye-popping riches of the secretive Wildensteins.

After Alec's death, Guy Wildenstein 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 setting 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 one billion dollars.

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

The case caused blushes for former French president Nicolas Sarkozy, who had made Guy Wildenstein a commander of the Legion of Honour in 2009, one of France's highest honours.

(AFP)

Date created : 2017-01-12

  • JUSTICE

    Heir of Wildenstein art-dealing empire on trial over massive French tax fraud

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