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HomeWorldGuy Wildenstein, Art Family Patriarch, Found Guilty in Tax Trial

Guy Wildenstein, Art Family Patriarch, Found Guilty in Tax Trial

Guy Wildenstein, the international art dealer, was found guilty in France on Tuesday of massive tax fraud, the latest twist after years of legal entanglements that have unraveled the secrecy that once surrounded his powerful family dynasty.

Mr. Wildenstein, 78, the Franco-American patriarch of the family and president of Wildenstein & Co. in New York, was sentenced by the Paris Appeals Court to a four-year prison sentence, with half of it suspended, and the other half to be served under house arrest with an electronic bracelet. The court also sentenced him to pay a one million euro fine, or about $1.08 million.

He stood accused of hiding significant chunks of his family’s art collection and other assets in a maze of trusts and shell companies when his father, Daniel, died in 2001, and after his brother, Alec, died in 2008.

Prosecutors had said that he was trying to dodge hundreds of millions of euros in inheritance taxes. At the trial, which was held in the fall, they had requested a slightly more lenient prison sentence for Mr. Wildenstein, but they had also requested a much larger €250 million fine, or about $270 million.

The Wildensteins, a family of French art dealers spanning five generations, were historically secretive about the exact details of their collection, which has included works by Caravaggio, Fragonard and many other blue-chip artists.

Prosecutors said that the family was responsible for “the longest and most sophisticated tax fraud” in modern French history, by concealing art and other assets under complex foreign trusts and by shielding artworks worth millions of dollars in tax havens. By doing this, prosecutors said, the family grossly underestimated its enormous wealth when the time came to pay inheritance taxes.

The Wildenstein family’s defense was that it did not have to disclose artworks to tax authorities if they were technically owned by trusts and not by the family itself.

But the court disagreed and said the family was responsible for a fraud of near-unprecedented “scope” and “sophistication.”

Pascale Cladiere, one of the court’s three judges, who read out the verdict, said Mr. Wildenstein had “knowingly” underestimated his wealth and “systematically chose opacity.”

“He presented himself as an art dealer who couldn’t measure the legal consequences at stake,” Mr. Cladiere said. “The evidence shows the opposite,” he added.

Mr. Wildenstein had previously been acquitted of the tax fraud and money laundering charges in 2017, an acquittal was then upheld by a higher court.

At the time, judges had ruled that the family had shown clear intent to conceal its wealth but that its actions were either past the statute of limitations or fell into a legal gray area, before France enacted a law in 2011 that requires foreign trusts to be declared to the authorities.

But in 2021, in a stunning reversal, Mr. Wildenstein’s acquittal was overturned by France’s top appeals court, which ordered the latest trial and asked for clarifications over whether the family had actually relinquished ownership of its assets to the trusts — determining whether or not they had to be declared to French tax authorities for inheritance purposes.

Mr. Wildenstein did not attend the court hearing on Tuesday. But he testified in September that for years he was oblivious to the intricacies of trusts and how they function, even though his family used them liberally to structure its wealth.

“I knew there were trusts,” he told the court. “I had absolutely no idea how they worked.”

He also argued that he spent much of his time outside of France and did not closely follow tax matters there. The Wildenstein family has galleries in New York and Tokyo, as well as a prestigious research institute in Paris.

Asked in September if his father, Daniel, had told him about the trusts before his death, Mr. Wildenstein said that “it might be strange, but he did not tell me anything.”

“We were neither consulted nor informed,” Mr. Wildenstein told the court.

But prosecutors said that the family had never truly given up ownership of the assets that were placed in the trusts, which were a mere “facade” to hide immense wealth — ranging from masterpiece paintings to high-end real estate and thoroughbred horses — from tax authorities.

The Wildenstein family remain a leading authority on old masters and Impressionists and have published definitive catalogs on painters including Monet and Gauguin, which give them all but final say over some authentication questions.

But repeated legal entanglements since the 2000s have gradually shed a harsh light on their business, often involving legal suits filed by women in the family who were cut off from its vast fortune during messy divorces and inheritance squabbles.

Seven other defendants — who had also been previously cleared — stood accused alongside Mr. Wildenstein.

They included Mr. Wildenstein’s nephew, Alec Jr., and his estranged sister-in-law, Liouba Stoupakova, who had been married to his brother Alec and had also complained that the Wildensteins had cut her off from her share of the family’s wealth. Several Swiss and French legal and financial advisers, as well as foreign trust companies, also stood trial.

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