The French press is calling it “The Tax Fraud Case of the Century” and “The Trial of the Missing Millions.” Another headline read, “Dallas sur Seine.”
Guy Wildenstein, 77, the trim, silver-haired patriarch of the French-American art-merchant dynasty that spans four generations, is back in court for a third time, facing tax-fraud and money-laundering charges.
The case, which opened in late September in Salle 17 of the Palais de Justice, on Paris’s Île de la Cité, has France buzzing. Wildenstein, a once cozy confidant of former president Nicolas Sarkozy’s, is being tried in France’s highest court. There is no appeal, and the bill will cost him almost $1 billion, plus serious jail time, if he is found guilty.
Wildenstein isn’t the only one in trouble. Sitting alongside him on the bench is a coterie of high-end notaries, lawyers, and representatives of offshore banks and trusts, not to mention family members—his nephew, Alec Wildenstein Jr., 43, and his late brother’s widow, Liouba Stoupakova, 49, who, ironically, was one of the first people to blow the whistle on Guy Wildenstein to the French authorities.
One headline read, “Dallas sur Seine.”
Guy has been acquitted twice on the same charges (once in 2017 and once a year later, when the decision was upheld in a higher court). Now that the Court of Cassation, France’s highest court, has overturned those decisions, French prosecutors are getting one last chance to convict.
As in the previous cases, the French government is alleging that the Wildenstein family failed to pay their fair share of estate taxes following the death of Guy’s father, Daniel Wildenstein, in 2001, and his brother, Alec Wildenstein, in 2008. Instead, the government believes the family hid their assets in an intricate web of trusts and shell companies mostly based in remote locales such as the Channel Islands and the Caribbean.
And the assets, it turns out, were many. The family real-estate portfolio alone is said to include a compound in the British Virgin Islands, a ranch in Kenya where Sydney Pollack’s Out of Africa was filmed, racing-horse stables filled with hundreds of prize-winning Thoroughbreds in Chantilly, and a building on the Avenue Montaigne in Paris.
Following Daniel’s death, in 2001, the Wildenstein sons declared the value of their father’s estate to be slightly more than 40 million euros, choosing to pay the bill in bas-reliefs sculpted for Louis XVI’s wife, Marie-Antoinette. When Alec died in 2008, Guy declared an inheritance of less than 60 million euros. Neither figure jibes with reality, say French prosecutors—and they have the found the paintings to prove it.
In 2011, a government task force specializing in lost art raided the Wildenstein Institute in Paris, uncovering an Ali Baba treasure trove of hundreds of paintings and sculptures (30 of which were considered lost or stolen). Then, in 2015, another discovery was made, this time in a Bahamian vault, where the works stored were valued at more than $1 billion.
Conservative estimates peg the Wildenstein fortune somewhere between $5 and $10 billion. French tax authorities are using that number to demand a clawback of around $582 million in back taxes, plus a fine of almost $265 million.
The trial, which began in early September, has just wrapped. Judges are now deliberating.
The lead prosecutor on the case, Monica D’Onofrio, has referred to the alleged Wildenstein tax dodge as “the heaviest and most sophisticated” of the Fifth Republic.
Hell Hath No Fury
The Wildenstein-family fortune dates back to the 19th century, when Nathan Wildenstein, an antiques dealer and son of an Alsatian rabbi, sold a painting for a client and converted the commission into a down payment to buy more art.
By the end of the 1800s, Nathan had amassed an enormous collection of 18th-century French paintings, drawings, and sculptures, and founded Wildenstein & Co. in his hôtel particulier at 57 Rue la Boétie, in Paris. Twenty-five years later, the family had galleries in London, New York, and Buenos Aires, and a client list that included Gilded Age families such as the Fricks, the Rockefellers, and the Mellons.
Nathan’s son, Georges, grew the family’s collection even more, acquiring works by Rembrandt, Cézanne, Degas, Renoir, Van Gogh, Monet, Gauguin, and Picasso.
When Germany invaded France in 1940, Georges fled with his family to the U.S., where he made New York his home and the family’s base of operations. In his 1981 book The Cultural Power Under the Fifth Republic, the author Pierre Cabanne described Georges Wildenstein’s art collection as “simply the biggest gathering of paintings of any school of masters of any style from any era, and they occupy the safe rooms of New York and Paris, which are better guarded than the Pentagon and more secret than the Vatican.”
Under Daniel, Georges’s son, Wildenstein & Co. continued as the rainmaker in the postwar art world by publishing an exhaustive series of catalogues raisonnés, which chronicled the location and history of thousands of paintings (many of which he owned, giving him control over their scholarship and, in a way, their authenticity).
Pierre Cabanne described Georges Wildenstein’s art collection as “better guarded than the Pentagon and more secret than the Vatican.”
During this time, the Wildensteins largely kept a low profile, which spared them bad press and added to their dark-arts mystique. “In my family, we have raised discretion to the highest rung of mutism,” Daniel Wildenstein said in a 1999 story in the French magazine L’Express. “We don’t talk. We don’t talk about ourselves. We’ve always been terribly secretive. For us, it’s better to pass as an idiot than to be someone who’s talkative.”
This family omertà remained unbroken until the late 1990s, when Jocelyn Wildenstein (née Périsset), wife of the late Alec Wildenstein (son of Daniel), became the first in a line of scorned Wildenstein women to shine a light on the family’s opaque past and secretive tax-avoiding measures.
Jocelyn was a “Page Six” fixture in 90s New York due in part to countless plastic surgeries gone wrong—which earned her the nicknames “Cat Woman” and “the Bride of Wildenstein”—and in part to her high-profile divorce from Alec, in 1999. After discovering her husband in bed with another woman, Jocelyn demanded a split, and when a fair financial restitution, in her eyes, wasn’t met, Jocelyn turned to the tabloids, revealing never-before-heard details about the Wildenstein family’s hidden, undeclared art collection, as well as their labyrinth of trusts. She went so far as to imply that the family allegedly dealt in art stolen by the Nazis.
The ordinarily secretive Wildensteins shot back, denying her claims in a series of interviews. Yet, according to the French publication Les Jours, several American investigations of declassified material conducted in the 90s revealed that the Office of Strategic Services (O.S.S., the W.W. II–era precursor of the C.I.A.) had indeed marked Georges Wildenstein on a red list “for having acquired works of art in countries occupied by Axis powers.”
And when Daniel Wildenstein, Jocelyn’s father-in-law, wrote a book in his own defense, he included, seemingly by accident, a mention of a series of paintings by Bonnard that he had owned but had never declared.
In 1999, Jocelyn agreed to a settlement of $2.5 billion plus a yearly allowance of $100 million. But in 2015 the allowance was stopped, and by 2018 the New York Post’s “Page Six” was reporting that Jocelyn had filed for bankruptcy. The multi-million-dollar trust she inherited was worthless, she said, partly because it had allegedly been guaranteed by a Diego Velázquez painting that had turned out to be fake. She also claimed another painting of hers, a Cézanne, had been severely overvalued at the time of the divorce.
Jocelyn, now 83, claims to have lived with zero revenue for the past eight years. In 2020, her three Trump World Tower apartments were repossessed. As a way to make money, she and her fiancé, the French-Canadian designer Lloyd Klein, are working on a two-part docuseries for HBO and a potential reality-TV show with the producers of Keeping Up with the Kardashians.
The lead prosecutor on the case has referred to the alleged Wildenstein tax dodge as “the heaviest and most sophisticated” of the Fifth Republic.
Following Daniel’s death, in 2001, his sons, Guy and Alec, assumed control of the family company. But shortly after their father’s estate was settled, Jocelyn’s claims were corroborated by another scorned wife.
In 2009, Sylvia Roth Wildenstein, Guy and Alec’s stepmother, whom Daniel had been married to from 1978 until his death, said she was duped by both brothers in 2005, when they convinced her to renounce her inheritance in order to escape her late husband’s bankruptcy and an eventual tax audit, both of which turned out to be untrue. (Sylvia’s story, as revealed by the New York Times journalist Rachel Corbett, helped bring the Wildenstein family into the public’s scrutiny.)
According to Sylvia, the agreement came with a wink-wink understanding that she could keep her prized horses and a healthy monthly stipend while also being allowed to live in her 3,500-square-foot apartment in Paris. But after the apartment was gutted, her horses sold off, and her payments suspended, Sylvia hired an attorney, Claude Dumont-Beghi, who in 2009 filed a criminal complaint against the Wildenstein brothers for breach of trust and concealment, money-laundering, fraudulent insolvency, and forgery.
“They were very well advised, for a long time, and it all went down with the utmost secrecy,” said Dumont-Beghi, who added that certain paintings owned by the Wildensteins allegedly traveled by private jet to Geneva or Zurich from the Bahamas in order to avoid customs. She claimed that others were painted over, so as to cross borders unnoticed.
Despite Sylvia’s death, in 2010, at age 77, Dumont-Beghi pressed ahead with her case against the brothers, ultimately handing it off to French prosecutors, who formally charged the Wildensteins in 2013.
“We don’t talk.... For us, it’s better to pass as an idiot than to be someone who’s talkative.”
A trend began to emerge of ex–Wildenstein wives walking away from their marriages with next to nothing. And despite the inevitable questions raised by billionaires divorcing their wives without spending a penny, or leaving them out of their wills entirely—not to mention the allegations about hidden assets—the Wildensteins came out the other side largely unscathed.
Then, in 2011, Liouba Stoupakova, Alec’s second wife, joined the fight.
Claiming she needed to pay a $5 million tax debt following her husband Alec’s death, Stoupakova, a Russian former model, clashed with the Wildenstein family after finding she could not access funds from a secret trust set up by her late husband in the British Virgin Islands.
Rather than give her free access to the trust, Guy Wildenstein offered to make a series of opaque loans to his sister-in-law, which Stoupakova agreed to pay back. The payments were made from an offshore trust to an account in Switzerland, then rerouted back to the U.S.
What Stoupakova didn’t anticipate at the time was that by accepting these loans, and then bringing them to light to tax authorities after the fact, she was implicating herself in a money-laundering scheme that would eventually land her in court as a defendant—sitting next to her brother-in-law.
The Trial
Despite the colorful backdrop of vengeful Sue Ellens and rumors of paintings smuggled under cloak of a Learjet, not to mention Stoupakova alerting Paris police in 2011 that a contract had been put out on her head, much of Wildenstein Round Three has been quite dry.
The extent to which the Wildensteins allegedly hid their assets is, in a word, dizzying. The prosecution has spent countless days attempting to map out how each of the Wildenstein trusts was set up, who had access to it, who signed off on what, and, most importantly, what the Daniel Trust, the Sons Trust, the Sylvia Trust, and the David Trust each held.
The fact that a lot of the family’s paintings were either kept in secretive free-port (import-tax-free) storage units in Switzerland, or enveloped inside entities based in foreign territories operating under distinct tax laws, has made following the money trail incredibly complicated. In her 2013 book, The Wildensteins, the French author Magali Serre writes that this was always the Wildensteins’ alleged intention—that “attempting to hide their fortune from the eyes of the world by using borders and foreign law,” the Wildensteins were following a “family tradition” dating back 150 years.
The Wildensteins, of course, aren’t the only .01 percent family to employ trusts to their advantage. The late Las Vegas Sands C.E.O. Sheldon Adelson used a complicated trust mechanism called a Grantor Retained Annuity Trust (GRAT) to pass on $7.9 billion to his children, avoiding a $2.8 billion hit on gift and estate taxes. And one of the largest personal art collections in the world, belonging to the Nahmad brothers (Ezra and David) and housing 4,500 to 5,000 works including paintings by Monet, Matisse, and Renoir, sits in a 15,000-square-foot tax-free Geneva Free Port storage facility. The collection has been valued at over $3 billion.
What makes the Wildenstein case different from the others is not only the enormous discrepancy between what they declared and what they owned, but a pesky little thing called the French law. If you are French and own a trust abroad, you are obliged by law to declare it and whatever assets lie inside. That, at least, has been the case since 2011, when a law ironically nicknamed the “Wildenstein Law” was passed by the French Assembly the same year the Wildensteins were first charged.
Part of the family’s defense has been to claim that Guy Wildenstein should not be charged for a law that has been retrofitted for him alone. (Earlier decisions said the 2011 law could not apply to the Wildensteins’ past court cases, because Guy couldn’t be charged for a crime that didn’t exist before 2011.) “It’s dangerous precedent to judge people on laws that didn’t exist before,” said one of Wildenstein’s lawyers, Olinka Malaterre, before the court. Another defense attorney, Jean-Yves Le Borgne, seconded her stance that same day. “We are in archeological judiciary here, and that’s not a good thing.”
For Round Three, Guy Wildenstein’s go-to stance in the courtroom has been to plead ignorance, just as he did on the second day of the trial when questioned about his involvement. “I knew there were trusts, but I didn’t know how they worked,” he said, shrugging his shoulders before the judge.
In his closing remarks in late September, the prosecutor, Yves Micollet, disagreed. “This family has always had two obsessions,” he said. “Protect the patrimony by putting everything in trusts, then maintain, at all costs, control over those trusts.”
The prosecution’s strategy is not to contest the legality of the trusts in question, but to establish that Wildenstein not only failed to declare them as part of his father’s and brother’s estate but actively used them as piggy banks over which he maintained complete operational control, while never declaring them to the French tax authorities. “There were constant cash infusions and deductions which were never agreed upon by trustees or in the bylaws of these trusts,” said Micollet before the court.
La Chute
The almost two decades of legal woes may be taking their toll on the Wildenstein checkbook. In 2009, the Abu Dhabi Louvre bought The Bohemian by Manet from the Wildensteins, and in 2005, Christie’s sold off a giant furniture collection for over $38 million, considered at the time “one of the most important sales of French furniture ever held.” In 2012, the family sold their Château de Marienthal, located just outside Paris, for $5.16 million, a sum the French tax authorities estimated as five times less than its real value.
In 2016, over 100 Thoroughbreds were sold. And in 2017, the family sold their mansion on Madison Avenue for $79.5 million, as well as an old atelier of Andy Warhol’s on 87th Street, for $9.98 million.
The Pace-Wildenstein gallery is now just Pace, and last May, it was leaked to the Daily Mail that former British prime minister Liz Truss was looking to buy a $24 million taxpayer-funded town house in New York, which she planned to use as a pied-à-terre, from Guy Wildenstein. (Truss denied this. According to Crain’s, the Sutton Square town house ended up selling for $26.1 million in August, not to the U.K., but to a shell company linked to a Westchester couple, for $7 million less than what Wildenstein had paid for it.)
In the spring of 2022, ARTnews reported that the Wildenstein estate had settled a dispute with the I.R.S., agreeing to pay $17 million in back taxes. (Like the French tax authorities, the I.R.S. claimed that the Wildensteins underestimated the assets they held in the U.S.)
Dumont-Beghi, who wrote a book, The Hidden Billions of the Wildensteins, in 2016, estimates the current Wildenstein fortune to be upwards of $10.6 billion—which, if true, would make both the current French and I.R.S. settlements peanuts.
“Take the example of the Caravaggio painting,” she says—The Lute Player, purchased by Daniel Wildenstein over 30 years ago and not included on the Wildensteins’ tax declaration in 2002, but included on a 2008 declaration at an estimated 100 million euros. “Considering there are thousands of these paintings of the same standing, I’ll let you do the math.” (Guy Wildenstein testified in the 2016 trial that the painting was not originally considered a true Caravaggio, and since it was owned by a trust, it did not need to be declared.)
“Attempting to hide their fortune from the eyes of the world,” the Wildensteins were following a “family tradition” dating back 150 years, according to one author.
In part because the trial was fairly technical, and in part because there were other court cases in the Palais that were more sexy—just down the hall, Rédoine Faïd, a bank robber who fashioned his career on Michael Mann’s Heat, was being tried for escaping prison by helicopter—the attorneys for Guy Wildenstein and his cohorts in Salle 17 far outnumbered the people in attendance.
And during most of the trial, spirits seemed high. Many of Guy Wildenstein’s attorneys, clad in black robes, could be seen huddling with him in the hallowed halls of the 800-year-old Palais, smiling and looking confident about their case. They were the same smiles that flashed inside the courtroom when Alec Wildenstein Jr.’s attorney read a letter to the court on the part of his client. “I am living at the ranch in Kenya, and cannot attend the trial,” the letter read. “I’m living on a salary south of 30K a year, and, anyway, I have no knowledge of any trusts or assets that may have been left to me.”
Three weeks later, after a bevy of documents established that Alec Jr.’s ranch in Kenya was owned by a company named Old Jogi Ltd., based in Kenya, which was then owned by another company, Old Jogi, of Liechtenstein, which then fell into the David Trust, the same faces looked a bit less confident.
“For some of these trusts, any decision or action requires the agreement of the family, and yet here we have paintings flying over the Atlantic and passing from Switzerland to the U.S. without anyone knowing when or how they left?,” Monica D’Onofrio asked the court, feigning astonishment. “And if everything was so legal, why hide it?”
After Guy Wildenstein was acquitted in 2018, his then lawyer Hervé Temime warned of a backlash that could come from what looked like “justice for the rich.” Now, with a surging populist movement once again gaining momentum in France, perhaps that moment has come.
A verdict is expected in March.
John von Sothen is a Paris-based writer, a frequent contributor to AIR MAIL, and the author of Monsieur Mediocre
