Wildenstein Clan Cleared of French Tax Fraud—For Now
The judge saw a 'clear attempt' to hide assets but deemed the evidence faulty.
French courts today cleared art dealing heir Guy Wildenstein on charges of tax fraud and money laundering. The same verdict was pronounced for the case’s seven other defendants that included family members and counselors.
The Franco-American dealer had been accused of hiding works of art and large swaths of the family estate worth hundreds of millions of euros in a maze of offshore trusts in order to avoid inheritance taxes when family patriarch Daniel Wildenstein died in 2001. The monthlong trial was held last October.
Before announcing his decision, the judge spent almost an entire hour presenting his analysis of the case. He then said there wasn’t enough evidence to definitively say that Wildenstein intentionally committed tax fraud following the death of his father.
Despite the acquittal, presiding judge Oliver Géron said the Wildensteins’ financial arrangements, especially the infamous trusts, showed a “will to dissimulate,” and a “clear attempt to avoid” paying taxes. Géron implied he was not clearing Wildenstein of wrongdoing and said that his decision could be “misunderstood.” Ultimately the acquittal was granted on technical grounds of weaknesses in the investigation and faults in French tax fraud legislation.
The French law that requires the declaration of assets such as those in question in the Wildenstein trial was only instituted in 2011, 10 years after the Wildenstein patriarch’s death. The judge invoked the decision that the law was not retroactive and could not be applied to inheritance resulting from Daniel Wildenstein’s death, or assets transferred at the death of Guy’s brother Alec Wildenstein in 2008.
The prosecutor had previously described the case as “one of the longest and most sophisticated frauds of the Fifth Republic,” and had originally asked for a severe punishment of four years in prison, two of which would be actual hard time, as well as a fine of 250 million euros, or $265 million.
Neither Guy Wildenstein nor his nephew Alec Jr., also named in the case, were present for the verdict. However, Hervé Temime, Guy’s lawyer, told the press as he left the hearing that his client was “very relieved.”
“I think it was a mistake to make this a criminal case,” Temime said. “It should have been a purely fiscal civil trial.”
“When Daniel Wildenstein died there were no laws and no certainty about whether the assets in the trusts should be taxed,” Temime added. “The court explained that criminal justice cannot replace lawmakers.”
This case is but one hurdle Wildenstein has to clear in French courts. He still faces another civil lawsuit in which French authorities claim about 500 million euros in taxes. He also will have to explain how he came into possession of paintings seized by police at the Institut Wildenstein in Paris. Those works are believed to have been stolen from their legal owners.
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