Cyrus Vance Jnr announced the charges against real estate developer Michael Shvo, 43, by saying: “This indictment puts other purchasers of fine art on notice: the purposeful evasion of New York state and city taxes is a crime, and those who scheme to avoid obligations will be held accountable.”
According to documents submitted to the Supreme Court, Shvo “engaged in a long-term scheme [2010-16] to evade payment of state and local sales and use tax on purchases of fine art, furniture, and jewellery”.
In communications with auction houses and art galleries he falsely represented that purchases he made would be shipped to an out-of-state address in the Cayman Islands or other overseas destinations, with no sales tax collected.
In fact, Shvo’s purchases were shipped to his office or homes in New York, including an apartment on Columbus Circle and a house in the Hamptons. In total more than $1m in taxes were evaded. The District Attorney’s Office has secured a temporary restraining order over approximately $1.5m of the defendant’s assets.
Shippers Charged
Shvo’s two shipping companies and their principals are also accused of participating in the scheme.
Sheridan ‘Tully’ Hedley, 33, who has worked in the family business Hedley’s Humpers for many years and based in New York since December 2009, is charged with criminal tax fraud and falsifying business records. The same charges have also been bought against another shipper, Best Guy Moving of Saddle Brook, New Jersey.
New York state commissioner of taxation and finance Jerry Boone said: “The arrest is part of a continuous and concentrated effort to crack down on criminal tax-evasion schemes.
“Those dealing in the high-priced art world and other luxury goods have an obligation to obey the same tax laws that govern all other New Yorkers.”
