How Wives Brought Down the Wildenstein Art Empire
What do a Manhattan-based billionaire, a naked Russian model, and a loaded gun have to do with one of the biggest tax fraud trials in French history now underway in Paris?
Students of Wildenstein & Company, once the world’s richest and most ruthless art dealers, know that until 1997 the powerful Franco-American-Jewish dynasty ruled with impunity and obsessive secrecy from their storied limestone headquarters on New York’s Upper East Side—and did so despite damning allegations that they had acquired artwork stolen by the Nazis during World War II.
This week, disgraced Guy Wildenstein, 70, son of the late and widely feared Daniel Wildenstein, is standing trial—along with his nephew, sister-in-law, and their financial advisers—in a Paris courtroom where they are charged with tax fraud and money laundering to the tune of $600 million. Prosecutors say that beginning in 2001 the Wildensteins began hiding money from French tax officials in offshore tax havens and mysterious trusts as Daniel lay dying in Paris.
According to French investigators, art worth an estimated $250 million was spirited out of company vaults in New York to Switzerland, for example, and Daniel Wildenstein’s ownership of an elite stable of thoroughbred racehorses was transferred to a brand-new family company while Daniel was still in a coma.
Longtime observers of the domineering and controlling Daniel say that Guy and his late brother Alec learned everything they knew about creatively moving assets around the world from the old man himself. French media is calling the case “Dallas on the Seine.”
Guy Wildenstein denies all the charges. In October, in a rare interview, he told Paris Match that he was “neither a tax nor a financial specialist,” and while he knew his father had used trusts, he didn’t know details.
Guy is the great-grandson of Nathan Wildenstein, who came from humble beginnings near Strasbourg to build an art-dealing empire in Paris in the late 1800s. Much of the Wildensteins’ fortune involves priceless artwork by painters such as Fragonard, Monet, Renoir, and Picasso secreted in anonymous vaults on several continents. The family also has an extensive real estate portfolio and a horse breeding and racing business. Vanity Fair reported in 1998 that the Wildensteins were worth at least $5 billion, but Guy and Alec Wildenstein estimated the value of the estate after their father’s death at only $60 million.
If convicted after what is expected to be a month-long trial, Guy Wildenstein faces a maximum of 10 years in prison and hefty fines.
But not even a controversial 1995 book, The Lost Museum: The Nazi Conspiracy to Steal the World’s Greatest Works of Art, which claimed that Daniel Wildenstein’s father Georges collaborated with the Nazis in the art trade throughout World War II, did much to damage the Wildenstein empire—especially after the Wildensteins sued author Hector Feliciano for defamation and lost.
So what happened to finally bring down the famed House of Wildenstein?
Try a bride—or three.
French officials opened the case in 2001 after Daniel’s widow, a former Israeli Army sergeant named Sylvia Roth, and later Alec’s widow, the Russian-born Liouba Stoupakova, showed them highly incriminating family financial documents. The women feared they were being cheated out of their inheritances by the suspicious manipulations of the vast estate after Daniel’s death.
Roth filed the first criminal complaint in 2001. She was angry because Guy and Alec had reduced her monthly cash allowance, sold the family’s Paris apartment, and moved her to a smaller one—after, she said, they had convinced her to sign away her inheritance to avoid possible tax bills and a criminal investigation, the Independent reported at the time.
French prosecutors also owe a lot to Jocelyne Wildenstein, now 75, who got the ball rolling way back in September 1997, when she returned to the palatial Manhattan townhouse she shared with her husband, Alec Wildenstein, and caught him in bed with a nude 21-year-old Russian model. Alec pulled out a revolver and aimed it at her and her bodyguards, telling police after his arrest and a night in jail that he had mistaken them for intruders.
The messy divorce that followed turned the Swiss-born Jocelyne, a plastic surgery addict, into a household name after George Rush, former columnist for the New York Daily News, dubbed her the “Bride of Wildenstein” because of her bizarre, distorted face, which she felt made her look like one of the big cats on her husband’s 66,000-acre ranch in Kenya. The split also put an unwelcome spotlight on the publicity-averse Wildenstein family and the extreme control Daniel Wildenstein exercised over the business—and his two sons, Guy and Alec. Jocelyne eventually netted $2.5 billion in the divorce.
“The divorce made more people aware of the Wildensteins’ staggering wealth,” Rush told The Daily Beast on Monday.
“Jocelyne knew a lot about the family’s business dealings and shrewdly exploited that knowledge,” Rush said. ”The Wildensteins couldn’t tolerate a forensic accounting in an American court. So, she was in a strong position to dictate her terms. Sylvia was in an even stronger position, having been married to the patriarch, Daniel. The Wildensteins are sensitive to even the slightest glare of publicity. Whether or not Guy is convicted of tax fraud, the look on his face as he left court on Monday suggests that the media burn he’s suffering must be excruciating.”
Unfortunately for Liouba Stoupakova, she’s suffering, too. Despite dropping a dime on the Wildensteins, she is now a co-defendant alongside Guy Wildenstein. She’s accused of money laundering in connection with what French officials say were secret contracts she signed for loans from Wildenstein that she needed to pay income taxes after her husband’s death, The New York Times reported.
Stoupakova said that she resorted to taking loans from Guy Wildenstein because the family’s tax manipulation had left her unable to pay her bills.
“Liouba is a victim in this affair,” said her lawyer, Julien Vernet. “The trusts were hidden from her and she was used by French justice to obtain as many documents as possible.”
The case won’t end in Paris. Documents in the French investigation indicate that the IRS also plans to go after the Wildensteins.