NEW YORK.- The US government has sued the Contemporary Art Holding Corp (CAHC), owned in part by Lawrence Gagosian. The suit was filed in a Manhattan federal court to recover $26.5 million in alleged back taxes and penalties. According to the prosecutors, CAHC was at the heart of a complicated scheme in which art was transferred between defendants to evade millions of dollars in taxes. CAHC was established in 1990 to acquire 62 contemporary art works. The defendants in the suit are Gagosian, his gallery, CAHC, magazine publisher Peter Brant and their alleged business partners including Geoffrey Kent, an executive at the Abercrombie & Kent travel agency.
Gagosian had filed a civil suit against the U.S. government where he alleged that the Internal Revenue Service wrongfully placed liens on paintings he alleges he rightfully owns as payments of deals with CAHC.
Federal prosecutors allege that the defendants owe taxes on transactions involving "Blonde Waiting, 1964" by Roy Lichtenstein; "Untitled R#2, 1947" by Clyfford Still, and "Onement #6, 1953" by Barnett Newman. The suit alleges that CAHC has admitted it owes more than $6 million in taxes. Prosecutors said the amount has grown to $26.5 million due to interest and penalties.