Guy Wildenstein.

Image: Guy Wildenstein | Blouin Art Info

Guy Wildenstein, 70, is heir to one of the largest art dynasties in recent memory, has been put on trial for accusations of tax fraud and money laundering. Two relatives tipped off investigators about the family’s financial activities, prompting a quick response and a demand of the equivalent of $602 million in back taxes. The investigation was given a fresh face thanks to documents given to investigators by Guy’s stepmother, Sylvia, and his sister-in-law, Liouba, who were both concerned about the family’s business doings.

The accusations specifically suggest that Wildenstein concealed much of the family’s fortune in trusts held in offshore tax havens, knowingly undervaluing how much the family estate is actually worth to avoid inheritance taxes following the death of their famous father, Daniel, in 2001. Wildenstein could face up to 10 years in prison if he is convicted.

After Daniel Wildenstein’s death, the family shipped close to $250 million worth of art to Switzerland—even the family’s beloved thoroughbred horses were transferred to a “newly-formed family company.” Wildenstein’s behavior and the trial against him will cross uncharted territory in the art world, raising questions about art business practices and how law enters into the arts world.

Family records from 2008 indicate that the Wildenstein family estimated Daniel’s estate to be worth about $61 million when he died, but investigations conducted by the French government found that the estate was really worth at least ten times that amount. Since then, Guy Wildenstein has argued that there was no legal requirement to report assets held in trust in 2001, meaning that what he did was not illegal.

Wildenstein has admitted to knowing that his father had used trusts, but claimed he did not know any of the details as he is “neither a tax nor financial specialist.”

Other documents filed in the court case state that the IRS plans to pursue taxes owed for the $250 million that was secretly shipped out of the country and into private accounts.

The family owns many important pieces of art, including works by Monet, Picasso, Velazquez, and Rembrandt. It is unclear what will happen to those works of art next.