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Justice will render a third decision, on March 5, in the Wildenstein heirs’ tax fraud case

After two acquittals, will the heirs of the Wildenstein family of art dealers be convicted of tax evasion? Justice rules again on Tuesday in this case with exceptional figures and a unique legal history.

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Justice will render a third decision, on March 5, in the Wildenstein heirs’ tax fraud case

After two acquittals, will the heirs of the Wildenstein family of art dealers be convicted of tax evasion? Justice rules again on Tuesday in this case with exceptional figures and a unique legal history. During the trial which took place from September 18 to October 4, the public prosecutor's office requested in this case described as "extraordinary" four years of imprisonment including one year closed, as well as 250 million euros in compensation. fine against Guy Wildenstein, 78 years old.

The Franco-American, who denies having committed any offense, is suspected of having concealed from the French tax authorities a large part of an estate estimated at several billion euros, at the time of the death of his father Daniel Wildenstein in 2001, then from his brother Alec senior in 2008. Sumptuous ranch in Kenya, paintings by Bonnard, Fragonard or Caravaggio, race horses, art galleries... all these assets were placed in trusts, companies under Anglo-Saxon law which shelter assets entrusted by their owner to a trusted person (the trustee).

For the prosecution, these trusts were “misused”: they were only “screens”, “screens” allowing the men of the extremely wealthy dynasty to hide their assets from the tax authorities, who in 2014 demanded from the heirs more than half a billion euros in evaded duties and penalties.

The prosecution requested a six-month suspended prison sentence against Guy Wildenstein's nephew, Alec junior (43), also retried for tax fraud but in his absence. A one-year suspended sentence and a fine of 150,000 euros were also requested against his ex-sister-in-law, Liouba Stoupakova, 50, prosecuted for complicity in money laundering.

The intermediaries of sophisticated financial arrangements, which passed through the British Virgin Islands, Guernsey or the Bahamas, are also implicated. For two lawyers and a notary, the public prosecutor's office requested a two-year prison sentence suspended to one year, as well as fines of 40,000 to one million euros, and for two asset managers the maximum fine of 187,000 euros. .

In order to respond, the defense criticized the “fantasies” and the “conspiracy theory” of the prosecution, asserting that there had been “no desire for tax evasion, no awareness of having to make tax declarations of these trusts ". The councils pleaded for a third acquittal, in line with those pronounced in 2017 and 2018, arguing that there existed at the material time an “artistic vagueness” in the law and French jurisprudence on trusts and therefore not obligation to declare.

On January 12, 2017, the court rendered a decision in total contrast to the severe requisitions of the National Financial Prosecutor's Office (PNF), which had depicted the "heaviest and most sophisticated" tax fraud of the Fifth Republic.

At the time, the judges invoked the shortcomings of the investigation and especially of French legislation: it was only in 2011, i.e. after the two declarations of succession, that a law came to organize taxation in France trusts. On June 29, 2018, the court of appeal confirmed the acquittal along the same lines, further considering that the facts were partly time-barred. But on January 6, 2021, the Court of Cassation overturned the decision and ordered a new trial. The high court rejected the limitation period and considered that before the 2011 law, there was indeed a reporting obligation, under certain conditions. She urged the appeals court to determine whether the Wildensteins had actually divested themselves of their assets by placing them in the trusts, or whether they could freely dispose of them. In the first case it was not necessary to declare, in the second it was.

The case began against a backdrop of family rifts: the referral to justice in 2009 by two women who felt wronged, Sylvia Roth, widow of Daniel Wildenstein (since deceased), and Liouba Stoupakova. Several civil proceedings are still ongoing in parallel. They relate to the considerable tax adjustments addressed to heirs.

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