German fashion designer Karl Lagerfeld is suspected of evading more than €20 million ($21.7 million US) in taxes by setting up a series of companies to use as funnels to tax-favored Ireland, the British Virgin Islands and the United States, French weekly newspaper L’Express reported.
Lagerfeld, 82, who is known for his trademark shades, is also a photographer. An investigation has begun into the 7L bookshop in Paris, situated just across the River Seine from the Louvre, sells art and photography books, which Lagerfeld founded in 1999.
The paper claims it houses a photo studio owned by a British firm that takes the revenue from Lagerfeld’s photography. The store loses money and so pays no tax.
The paper said officials suspect the foreign transactions allowed the ‘concealing of the undeclared professional activity’ of Lagerfeld as a photographer. Tax authorities are also interested in two property investment companies and a tax adjustment Lagerfeld received in the Nineties.
According to ABC News, Caroline Lebar, a spokesperson for the designer, says that Lagerfeld “had no wish to evade the law,” and trusts his financial advisers to work out the situation with the tax authorities. The designer has not offered further comment about the controversy to the press or to his fans on social media, including his accounts on Twitter and Instagram.
The German-born Lagerfeld, whose cat brought in €3 million ($3.27 million US) in modeling gigs in 2014, is based in Paris, where he oversees the Chanel fashion house. He is also the fashion director for Fendi, an Italian-based label. There have been no indications that the investigation involves either Chanel or Fendi.
Karl shoots most of his own high-fashion campaigns, and even currently has a collection of his photographs on display at a gallery in Paris.
French authorities did not comment, citing the privacy of tax affairs.
— KARL LAGERFELD (@KarlLagerfeld) January 7, 2016
Lagerfeld is known to misrepresent his birth year, claiming to be younger than his actual age, and to misrepresent his parents’ background. For example, he has claimed that he was born in 1938 to “Elisabeth of Germany” and Otto Ludwig Lagerfeldt from Sweden, although these claims have been conclusively proven to be entirely wrong, as his father was from Hamburg and spent his entire life in Germany, with no Swedish connection whatsoever.
There is also no evidence that his mother Elisabeth Bahlmann, the daughter of a middle class local politician, called herself “Elisabeth of Germany.” He is known to insist that no one knows his real birth date. In an interview on French television in February 2009, Lagerfeld said that he was “born neither in 1933 nor 1938.”