Wildenstein tax-fraud case underway in France

In one of France's biggest-ever tax fraud trials, Guy Wildenstein, the heir of a New York art-dealing empire, is facing criminal charges of concealing much of his inherited fortune. Authorities have claimed a huge 553 million euros ($621 million) in unpaid taxes for fraudulently undervaluing the family's wealth, much of it held in tax havens.

Apart from small parts of the estate owned in France and London, "the whole patrimony of Daniel Wildenstein was held in trusts" located in tax havens like the Bahamas, Guernsey or the Cayman Islands, the French investigating judges have said in court documents.

Guy Wildenstein is the son of Daniel Wildenstein, an art dealer, racehorse owner and breeder in France who died in 2001. The 70-year-old Guy is a member of the Assembly of French Citizens Abroad, a former member of Nicolas Sarkozy's Union for a Popular Movement (UMP) and was one of the movement's major donors.

The intricacies of the case and the family feuding - some of it carried on after the death of an interested party - have made it a cause celebre in France. Over nearly a century, the Wildenstein family accumulated paintings by artists including Fragonard, Cézanne, Degas, Monet and Picasso which have for the most part, according to reports, been kept in the vaults of a Swiss bank and never been declared to the French tax authorities as they were held in offshore trusts.

According to a report in the Liberation French newspaper, the artworks were used as security to borrow money for investments. An agreement which it is claimed was made between the Wildensteins and Coutts Bank in the Bahamas used the $250 million (224 million euros) in artworks, held in a Zurich warehouse, as security for a $100 million facility for investments yielding $3 million a year.

When Daniel Wildenstein died in 2001, his wealth was declared at 40 million euros, with 18 million euros due in taxes.

Apart from the paintings, the Wildenstein family has two apartments in New York, one in Paris, a castle in Verrières-le-Buisson, a 30,000-hectare ranch in Kenya, a private jet and numerous valuable paintings. They are also known as racehorse owners and breeders, recently putting up more than 100 horses for sale with the Irish auctioneers Goffs.

Claiming widows

Crucial information for the case has come from the ex-wives of Daniel and Alec Wildenstein who believed they were being swindled by the family. Daniel's widow, Sylvia, complained about her 400,000 euro income from her late husband's estate for which she had been obliged, reportedly, to sign documents written in Japanese. She lodged a complaint, claiming 15 million euros, before she died in 2010.

However, Sylvia's lawyer, Claude Dumont Beghi, carried on the claim. In 2012 she appeared before a Senate inquiry on tax evasion and claimed: "With the Wildenstein, it could be possible to return 1.5 billion euros to the state coffers."

Other claims by ex-wives revealed more information about the family holdings. In 2009, following the death of Alec Wildenstein, Guy's brother, an intervention by his second wife, Liouba, revealed another family trust, this one holding about 30 paintings which had allegedly been declared as "stolen or missing."

Liouba is also a defendant in the trial, along with three tax lawyers and two trusts, all accused of committing or helping in tax fraud or money laundering. The trial is expected to continue for a month.

jm/jil (Liberation, AP)