Art Collector Michael Shvo Pleads Guilty to Tax Evasion, But Avoids Jail Time
Shvo must pay $3.5 million in unpaid taxes and fines.
New York real estate developer and art collector Michael Shvo pleaded guilty to tax evasion in Manhattan Supreme Court yesterday. He must pay $3.5 million in back taxes and fines, but will avoid jail time, which the Manhattan District Attorney’s office originally pushed for.
According to reports, Shvo admitted that he “willfully and intentionally” evaded both New York State and local taxes, including sales tax, compensating use tax, and corporate tax, in connection with the purchase and sale of a Ferrari, furniture, jewelry, and works of art. (No specific artworks were identified in the indictment.)
“We are pleased that the case against Michael Shvo has been fully resolved with the only requirement being that he pay the taxes that are due,” Shvo’s attorney, Benjamin Brafman, told artnet News. Shvo will avoid jail time on the condition that he pays the amount on or before June 1. There is no probation associated with the charge, Brafman says.
Between 2010 and 2016, Shvo “engaged in a long-term scheme to evade payment of state and local sales and use tax” on purchases and “falsely represented that purchases he made would be shipped to an out-of-state address in the Cayman Islands or other overseas destinations,” according to court documents. But the indictment claims that he really had the purchases shipped to his office or his Manhattan and Hamptons homes.
The DA also alleged that Shvo attempted to hide the assets of his company, Shvo Art Ltd, from taxation, by falsely claiming that the company and its assets were located offshore when Shvo instead operated out of New York.
Shvo attracted attention in the art world in 2013 when he turned a Getty gas station on West 24th Street into a temporary François-Xavier and Claude Lalanne “grass station” installation, complete with the Lalannes’ signature sheep. It has since been turned into a luxury condo building, titled The Getty, adjacent to the High Line elevated park.
Manhattan DA Cyrus Vance initially announced the indictment in September 2016 and said, “This indictment puts other purchasers of fine art on notice.”
By that time, high-profile art dealer Larry Gagosian and collector Aby Rosen had already settled tax evasion cases with the DA’s office.
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