Billionaire Art-Family Accuser Turns Accused Over Secret NY Cash
Since his father’s death two decades ago, French billionaire
art dealer Guy Wildenstein has faced a familiar foe at almost every turn.
Lawyer Claude Dumont-Beghi has doggedly pursued him over
accusations he cheated his stepmother Sylvia out of a fortune from the
inheritance. The dispute sparked a criminal probe in which Wildenstein was
accused of concealing from French tax authorities paintings worth hundreds of
millions of dollars in offshore trusts.
As it turns out, Dumont-Beghi had a little secret of her
own. The longtime attorney for the late Sylvia Wildenstein hid about 4.5
million euros ($5.1 million) she got from her client in the mid-2000s in an
undeclared account at HSBC Holdings Plc in New York. But French authorities
eventually found out, leading to her conviction for tax fraud and money
laundering in a case where she was criticized for using a setup in the British
Virgin Islands to conceal the assets.
The yet-unreported guilty verdict emerged as part of a top
court attempt by Dumont-Beghi to challenge her conviction that was only partly
successful. Cour de Cassation judges in Paris suggested this month her sentence
may need to be lightened. Dumont-Beghi admits some passivity as she was facing
a personal drama but denies any intent to conceal assets. She says she has paid
tax authorities what she owed.
The conviction adds an ironic twist to the Wildenstein saga
as the family’s most vociferous critic stands accused of something she has
denounced all along -- tax evasion.
For years, Dumont-Beghi publicly excoriated the Wildenstein
family for dispossessing the second wife of Guy’s father, Daniel. Tax fraud,
she told a group of senators shortly after publishing her first book on the
Wildensteins in 2012, “dooms” the economy if it’s not tackled.
Dumont-Beghi’s campaign culminated in a widely-watched Paris
criminal trial against Guy in 2016, with the proceedings focused on the
offshore trusts set up by his father Daniel to stash artworks worth more than
$1 billion. The Wildensteins have maintained that the art wasn’t legally
Daniel’s, but belonged to the family trusts and shouldn’t count for estate
taxes.
Over weeks of hearings, prosecutors accused Guy of misusing
trusts and transforming them into “piggy banks,” and sought a 250 million-euro
fine and a prison sentence. Guy was spectacularly cleared in early 2017. The
acquittal was challenged by the Parquet National Financier but the art dealer
won again on appeal.
The final outcome of the case remains uncertain after
France’s top court ordered its reexamination earlier this year and hinted that
the path toward a victory for Wildenstein would be much narrower. Separately,
the Wildensteins lost the first round of their civil battle against tax
officials worth hundreds of millions of dollars.
Turn the clock back to Daniel’s death two decades ago to
understand how Dumont-Beghi entered the picture. When it came time to settle
their father’s estate, Guy and his brother claimed he had a net worth of 40.9
million euros and offered to cover the bill by giving a set of bas-reliefs by
Marie Antoinette’s favorite sculptor. Unaware of the existence of the trusts
back in 2002, French tax officials accepted.
The matter seemed settled until Sylvia hired Dumont-Beghi a
few years later and turned against the family. Daniel’s second wife sued,
claiming her stepsons had told her the taxes would bankrupt her if she didn’t
relinquish her estate rights. She won a key round in 2005. French tax
authorities took notice, as did criminal investigators, launching Guy’s legal
woes.
Meanwhile, far away from the public eye, the Dumont-Beghi
tax case has also been a roller-coaster ride that has now reached France’s top
court. Tax officials say she skipped nearly 150,000 euros in income tax and a
little over 120,000 euros in wealth tax. They also brought in the criminal
authorities, who built a court case against her.
A Paris criminal court initially found Dumont-Beghi guilty
in February 2019 of aggravated tax fraud and money laundering. Her 18-month
suspended sentence was confirmed on appeal a year later but she got a heavier fine
-- 750,000 euros, up from 100,000 euros.
The case then went to the Cour de Cassation, which
maintained the money laundering conviction but questioned the aggravated
circumstance applied to the tax fraud accusations by appellate judges. The top
court pointed out in a Dec. 1 ruling released this week that such aggravated
circumstances -- having an account or an interposed structure abroad -- were
specified in France law after the fact.
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