Guy Wildenstein, head of an international art-dealing dynasty, appeared in court yesterday in Paris to stand trial for the third time since a state prosecutor accused him in 2016 of operating “the longest and most sophisticated tax fraud” in modern French history.
The trial will determine once and for all whether Wildenstein and his co-defendants—including two lawyers, his nephew, and a former sister-in-law—are guilty of money laundering and tax evasion, and if they will have to pay nearly $1 billion in back taxes and fines.
The case stems from the 2001 death of Guy’s father, Daniel Wildenstein, until then the famously secretive patriarch of the family’s influential gallery, Wildenstein & Co. Guy and his brother Alec reported at the time that their father’s estate was worth just €41 million—an accounting that didn’t mention the family’s compounds in the Virgin Islands or Kenya, plus scores of artworks by the likes of Caravaggio, Gauguin, and Monet. Guy was accused of again under-reporting assets in Alec’s estate when he died in 2008.
The family, which for five generations has traded some of the most important Old Master and Impressionist masterpieces in the world, is widely believed to be worth billions.
The alleged financial crimes first came to light after Daniel’s widow, Sylvia Wildenstein, accused Guy and Alec, her stepsons, of tricking her out of her inheritance by telling her that Daniel died in financial ruin. She and her lawyer, Claude Dumont Beghi, went on to expose the family’s vast web of offshore trusts and undeclared artworks. Sylvia died in 2010, but the government used the evidence she and her lawyer brought forth to build their case.
Since then, Guy has twice been acquitted in the state’s suits, in 2017 and again in 2018, with judges ruling that there was no law at the time of Daniel nor Alec’s deaths requiring him to declare assets held in foreign trusts. The new trial in the Paris Court of Appeal, ordered after France’s highest court abruptly cancelled that acquittal two years ago, came as a surprise twist in the saga that French media have come to call “Dallas on the Seine.”
At issue now is whether the family’s trusts should have been reported after all, and whether or not they were truly independently managed. To be exempt from taxation, trusts must be “irrevocable,” a status that frees trustees to operate at their own discretion, without interference from the beneficiaries. Guy is accused of having personally directed trustees to carry out his will, in violation of the trust’s tax privileges.
When asked for comment on the new trial, Dumont Beghi, who also attended yesterday’s hearing, sent Artnet News a copy of a 2005 court order from the Supreme Court of the Bahamas, where Daniel Wildenstein had registered a trust—known as the “Sylvia Trust”—containing 19 paintings by Pierre Bonnard. His widow Sylvia had argued in court that the trustee wasn’t operating as an independent third party, and was not serving her interests as a beneficiary. The court order names Guy and Alec, along with Leadenhall Bank and Trust, as co-defendants, suggesting to Dumont Beghi that “they considered themselves to be the owners and that, on their father’s death, this estate had indeed become part of their own patrimony.”
Guy’s attorney Olinka Malaterre did not respond to requests for comment. She has previously told AFP: “After two successive acquittals in favor of Guy Wildenstein, we are confident in the upcoming decision.”
As the market wanes for 18th-century French art, which has long been the Wildensteins’ specialty, the family has been selling off assets, including real estate and, most recently, its storied thoroughbred horse racing and breeding business. Nathan Wildenstein, who started the family business in France in the 1870s, traded horses on the side, and each generation until now has grown the operation. In August, Chanel owners Alain and Gerard Wertheimer bought the last of the family’s stock.
The court will make its decision in the retrial in early October.
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