The art dealer Guy Wildenstein and several members of his family, tried for tax fraud and money laundering and organized crime, were released Thursday, January 12, 2017. Shortly before the opening of the trial, in January 2016, “M” painted the portrait of a clan on the verge of explosion.
A financial empire, a family tearing each other apart, disputed estates and a slight hint of political scandal. The umpteenth scenario of “Dallas”? No, that of the judicial soap opera that began on Monday, January 4 at the Paris Criminal Court and will resume on May 4. At the heart of the storm: the Wildenstein family, and in particular its patriarch, Guy. Aged 70, a resident of the United States, where he was born, this art dealer is not only a very influential figure on the international art scene, he is also one of the founding members of the UMP. And one very close to Nicolas Sarkozy. So many ingredients that promise exciting developments in the coming weeks. Charged with the heirs of his late brother Alec by the examining magistrates Guillaume Daïeff and Serge Tournaire, Guy Wildenstein will have to answer accusations concerning the succession of his father, Daniel, who died in 2001. The twilight of a dynasty that has ruled the art market since the 19th century?
In particular, he is accused of having hidden his assets in trusts located in tax havens. Two of these financial entities are themselves being sued as “legal persons”: Northern Trust Fiduciary Services and the Royal Bank of Canada Trust Company Limited for the action in this case of its subsidiary in the Bahamas. Also involved are a notary public and some lawyers close to the family.
"A stable, houses, a ranch, an island…"
After negotiations, the tax authorities are claiming the record sum of 550 million euros from the Wildenstein family. Among the assets of Daniel Wildenstein that should have been declared at the time of his succession, according to the order of reference of the examining magistrates: “real estate properties in Kenya, the British Virgin Islands, 740 Madison Avenue and 19 East 64th Street in New York, shares in Wildenstein & Co Inc, various art galleries, all housed in the Sons Trust, the David Trust, the Sylvia Trust and the GW Trust”.
A Prévert-style inventory, measured in the more romantic version of Daniel’s widow, Sylvia Wildenstein, who died in 2010. Interviewed by Le Monde a few years earlier, she talks about her memory of a vacation : the family is on a cruise in the West Indies. With their own boat, of course. Caught in a storm, the yacht tries to take refuge in the ports of Haiti or Santo Domingo. But he can’t get in, because it’s too big… So, in a protected bay in the Virgin Islands, Daniel Wildenstein decides to buy it in 1981, at his wife’s request, to establish a more stable vacation resort.
In addition to the private island, the family had a residence in Switzerland, a racing stable in Chantilly, the castle of Marienthal near Verrières-le-Buisson (Essonne) set on a park of more than 8 hectares. A pittance compared to their 30,000-hectare ranch in Kenya, where part of the film Out of Africa was filmed: two hundred buildings and fifty artificial lakes. It also has a bush hospital and a veterinary clinic for wild animals. One travels from one place to another by jet, privately, of course. The family also owns one of the most beautiful houses on the Upper East Side, the most upscale neighborhood in New York City. The art gallery is located in a nearby mansion. Its contents are mythical, the fruit of the labor of several generations.
From native Alsace to New York art galleries…
The birth of the family empire dates back to 1875. Its founder, Nathan Wildenstein, son of an Alsatian rabbi, left his native province five years earlier to stay French. After a quick passage through Carcassonne, where he got married, he started trading in antiques. Very quickly, he specialized in 18th century paintings. His rise was dazzling. At the beginning of the 1890s, he bought a private mansion at 57, rue La Boétie. In 1902, he opened a gallery in New York, then another one in London in 1925, and a last one, four years later, in Buenos Aires.
When he died in 1934, his son Georges (1892-1963) had long since taken over and extended his purchases to almost every field of art history, from painting to sculpture, from medieval manuscripts to the Impressionists. He is familiar with Pablo Picasso, Salvador Dalí, Max Ernst, a friend of the Surrealists. André Breton considered him to be a man of extraordinary distinction of spirit.
In 1940, fleeing the German invasion, Georges, his son Daniel and his grandson Alec, born in August in Marseille, left for the United States. Guy, Daniel’s second son, was born there in 1945. A member of the Institut de France, Georges Wildenstein’s sworn enemy was Malraux, who blamed him for the manipulative export of sensitive paintings, such as Georges de La Tour’s La Diseuse de bonne aventure (forbidden to leave the country, it had been granted a temporary export permit and was sold to the hussar at the Metropolitan Museum in New York, where it still stays today).
This did not prevent her from being one of the main donors to French museums and from managing the Wildenstein Foundation, which draws up and publishes Catalogs Raisonnés of artists. He died in 1963. It was then that Daniel was given the task of running the company, always maintaining, following the example of previous generations, the absolute discretion in their affairs. This, in itself, is not reprehensible, and is even recommended for any merchant who treats his client’s interests as has his own.
The embarrassing revelations of the deceived woman
But “qui femme a, noise a“, says the medieval proverb. One fine day, Jocelyn, wife of his eldest son, Alec, states her intention to divorce. Not without a few good reasons: she said she caught her husband in bed with another woman, and that he threatened her with a gun. Unhappy with her alimony, she uses the American media, from tabloids to the so-called “quality” press, not to mention television, as a sounding board and reveals some family secrets, not always very verifiable and rarely edifying. The least pretty of these, strongly denied by those concerned, concerns the art trade with the Nazis during the Occupation.
The scandal was such that the patriarch Daniel Wildenstein was forced to grant her the pension claimed and to come out of a silence as legendary as the extent of his collections. The statements to the press multiply and he goes so far as to produce a book of interviews with the journalist Yves Stavridès (Art Dealers, Plon). He elegantly tries – in the general opinion of those, who knew him, (the man was a seducer) – to put out the fire caused by the mention of the gallery’s activities during the war, without realizing that he is kindling new flames, such as a collection of Bonnard’s paintings, which will come back to haunt when it comes to his succession.
If Jocelyn is a panther – or at least she looks like one, after numerous cosmetic surgery operations that still contribute to her fame – Daniel’s own wife, Sylvia Roth-Wildenstein, could be called a bird of paradise. Very beautiful, very blonde showered with gifts by her husband but carefully kept away from bis business. This is forgetting that she was in her youth a non-commissioned officer in the Israeli army and had experienced a few wars. On the ground, she will turn out to be a lioness. Especially when she realizes that she has just been deprived of her beloved horses: “I reacted when a lawyer made me sign a paper,” she told Le Monde. I realized that my four horses no longer belonged to me. My husband, Daniel, had offered me my first horse, a mare that was well-born but condemned to the butcher’s shop. Her name was Neomenie and she became a champion show-jumper… “
After the death of her husband, on October 23, 2001, her stepsons Alec and Guy encouraged her to renounce “purely and simply her husband’s estate”, according to a decision of the Court of Appeal in 2005, which was a dramatic act by the two sons because “[they] falsely led her to believe that by renouncing the estate” she was exempting herself from the tax debt left by the deceased. This man during his lifetime had declared without batting an eyelid that he had an income equivalent to 500 euros per month! The source of this debt? A tax adjustment, in respect of income tax for the years 1996 to 1998, of about 67 million francs at the time.
In a fax dated August 6, 2003 addressed to Sylvia Roth-Wildenstein, her sons-in-law told her: “The tax authorities were considering criminal proceedings against you and Daniel; what do you think you would do if you were before an examining magistrate? “The court considered that this fax was “likely to disturb Mrs. Wildenstein, then 68 years old and an American citizen, as prosecution for tax fraud could lead to a long prison sentence in the United States of America…”.
After the panther and the lioness, the tigress…
Not only did Sylvia Roth-Wildenstein’s renunciation of her husband’s estate not protect her from the tax authorities, but Daniel Wildenstein had also left enough money to pay the costs of her estate. The tax was reduced after the transaction to 7.6 million euros and was largely covered by a bank guarantee of 9.6 million euros, which was established during his lifetime.
Here, the court of appeal was, in its least flowery language, severe: her sons-in-law, “with all the legal and tax experts advising Mrs. Wildenstein”, “refrained from enlightening her exactly on her financial situation, whereas she had never participated in her husband’s financial activities, she was not precisely informed about the state and composition of her assets” and she was “somewhat weakened by her age […]. …] and by the death of the man who had been her companion for forty years and who had just spent ten days at the clinic where he had just been operated on for cancer and was in a coma”.
All the main elements of the upcoming trial in January 2016 are there. But nobody knows it yet, except a lawyer, who is still little known. Claude Dumont-Beghi is not the sweet voice, but has a real passion for law, and knows all its mysteries. She will prove it in the decade to come. After the panther and the lioness, the Wildenstein will have to face a tigress. It was she who, pleading for Sylvia during the trial of April 14, 2005 at the Paris Court of Appeal, obtained the requalification of her marital status.
Two judgements declared in their grounds that “the evasion of assets in foreign companies and trusts [was] in accordance with the family tradition of transmission of property to direct heirs”.
They were deemed to be married under the regime of separation of property in New York. The fact that she and Daniel lived mainly in Paris allowed her to demonstrate that, in law, the applicable regime is French, in this case, and in the absence of a contract, that of community of property, and therefore that Sylvia has the usufruct of half of her late husband’s fortune. It is also she who finds it strange, if not miraculous, that Daniel Wildenstein, in the days preceding his death, plunged into a “reactive coma”, was able to sign the sale of sixty-nine racehorses for the benefit of a company owned by his two sons, and to be declared as having attended the holding of a board of directors… She would then be followed by the court, which does not believe in miracles either, on these two points.
The reader will be spared the decade of proceedings that followed. The norias of lawyers, each one more prestigious than the other, called upon to defend the Wildensteins. The Courts sometimes reached surprisingly clear decisions. Two judgments, one on appeal, confirmed in cassation, declared in their judgments that “the evasion of assets in foreign companies and trusts [was] in conformity with the family tradition of transmission of property to direct heirs”…
These famous trusts, what are they? Claude Dumont-Beghi dissects them in a book to be published on January 6 by Les Milliards cachés des Wildenstein, published by L’Archipel, in which she describes the whole affair. Originally a British invention dating back to the Middle Ages. If the chastity belt that knights going on crusade girdled their wives with is a myth, they nevertheless did not want to leave the unfortunate woman unprotected, and entrusted their fortune to a trustworthy man, a “trustee”, who was responsible for administering it and providing for the needs of a family that the crusader knew he had little chance of seeing again one day.
Paintings “disappeared” in the family’s cellars
Today, according to the lawyer, the machinations have become a perfectly opaque tool to defraud the tax authorities and launder money, and not just that of the art dealers. Such seems to be the opinion of the tax authorities and the two examining magistrates. However, Claude Dumont-Beghi and Sylvia Wildenstein had to move up a gear in the last few months of their lives before they could get started. The former by reporting her findings to the tax authorities and to two successive ministers – Eric Woerth then François Baroin (only the latter followed up) -, and Sylvia by finally agreeing to take the case to the criminal justice system.
From then on, the judicial machine, that is the real one, was launched. With collateral damage for Guy Wildenstein: in November 2010, police officers from the Central Office for the Repression of Serious Financial Crime (OCRGDF) searched the Wildenstein Institute, where for decades the family had published catalogs raisonnésd’artistes and kept its archives, and which adjoins the headquarters of the UMP in Paris, rue La Boétie. Their surprise was to find works that had no place there. Notably a painting by Berthe Morisot, Chaumièreen Normandie, which disappeared in 1993 along with about forty other paintings during the inventory of the Anne-Marie Rouart estate. The heir, her nephew Yves Rouart, filed a complaint at the time. That is why this time it was the police officers of the Central Office for the Fight against Trafficking in Cultural Property (OCBC) who, on January 11 and 12, took over the premises of the Wildenstein Institute. And Guy Wildenstein was indicted for “concealment of breach of trust”. Other families then realized that paintings they thought were lost were lying in the cellars of the Wildensteins. These cases are still being followed.
Finally, given Guy Wildenstein’s friendships, the affair soon took a political turn, all the way to the National Assembly, where several deputies harassed Nicolas Sarkozy’s government on the subject. This is the normal functioning of a democracy. But before being a political affair, before being a matter of big money, it is first of all a matter of stating the law, which is what the criminal court will have to do.
Source: Lemonde.fr
Author: Harry Bellet
Photo: Complément d’enquête