The auction house Sotheby’s reached an agreement with the New York justice system to pay a fine of 6.25 million for having Helped clients evade taxesthe prosecutor’s office announced this Thursday morning.
The office of New York State Attorney General Letitia James explained in a statement that the auction house, whose headquarters are in the financial capital, had “encouraged clients to fraudulently report that the works of art they purchased were intended for resale.”
This ploy prevented these clients from “paying taxes on the sale of tens of millions of dollars of artwork acquired between 2010 and 2020.”
According to Letitia James, who filed the lawsuit in November 2020, “a major client identified as ‘the collector’ purchased $27 million worth of artwork from Sotheby’s between 2010 and 2015. using the tax-exempt resale certificate system“.
The auction house “knew” the works were destined for his private collection, and “Sotheby’s employees even helped install them” in his home.
In November 2018, another out-of-court settlement was reached with the company Porsal Equities, belonging to an unidentified collector based in the British Virgin Islands, for the payment of more than $10 million in taxes, fines and damages.
Sotheby’s, owned by French-Israeli-Moroccan billionaire Patrick Drahi since 2019, also provided fake resale certificates “to at least seven other clients” between 2012 and 2020.
In addition to the financial penalty, the auction house must carry out “significant reforms” to guarantee the final intentions of its buyers.
Contacted by AFP, Sotheby’s did not immediately respond.
