Sales tax investigation nabs NYC art dealers

From today's NY Times:

Otto Naumann Ltd., a Madison Avenue art gallery, has pleaded guilty to a charge of failing to collect sales tax on two transactions. It has agreed to pay a $500,000 fine.

The plea . . . came a year after L. Dennis Kozlowski, the former chief executive of Tyco International, was indicted on charges of evading more than $1 million in sales tax on six paintings he bought from art dealers in Manhattan and London.

Since then, the records of galleries on Madison Avenue and in Chelsea — Manhattan's centers for the sale of art — have been subpoenaed by the Manhattan district attorney, Robert M. Morgenthau. Gallery owners have been given a month to produce five years' worth of transactions, dealers who have been subpoenaed said.

The district attorney's office is interested both in the transactions of the art galleries and in any evidence of sales-tax evasion by their customers, who include many of the nation's leading business executives.

Posted by David on June 20, 2003 2:16 PM