Federal prosecutors are recommending that Mary Boone, the veteran art dealer, be sent to prison for as much as three years, saying she deliberately defrauded the government by filing false tax returns and evading $3 million in taxes.
Ms. Boone, who is to be sentenced on Jan. 18, pleaded guilty last year to two counts of filing false returns, a charge that carries a maximum three-year prison sentence. Her lawyers had asked Judge Alvin K. Hellerstein of Federal District Court in Manhattan to spare her any prison time, writing that her offenses were the product of depression and anxiety brought on by childhood trauma rather than greed.
Prosecutors rejected that argument in court papers this week, arguing that Ms. Boone had achieved a measure of financial stability and comfort that “most people can only dream about” and should serve 30 to 37 months in prison.
“Boone was the sole architect and beneficiary of this tax fraud scheme and, contrary to her assertions now, engaged in it out of pure greed — to line her own pockets by cheating the system,” the prosecutors wrote.
Ms. Boone opened her gallery in SoHo in 1977 and rose to prominence while showing the work of artists like Julian Schnabel and Jean-Michel Basquiat. She remained a constant in the ever-changing art world and now operates two gallery locations — one on the Upper East Side and the other in Chelsea.
In their court filing, prosecutors described a multipart scheme that Ms. Boone was said to have carried out between 2009 and 2011, using money from her gallery to pay for personal expenses and then claiming them as business deductions. They said the personal expenses included $793,003 used to remodel her Manhattan apartment and about $300,000 in personal credit card charges. Those charges, the prosecutors wrote, included beauty salon purchases of $24,380, nearly $15,000 spent on jewelry, nearly $14,000 on products from Hermès and more than $5,000 on items from Louis Vuitton.
As part of her fraud, prosecutors said, Ms. Boone tried to conceal the personal nature of some expenses by listing them as related to business in her handwritten tax ledgers. For example, they said, she identified $600,000 in payments to a contractor remodeling her apartment as a business expense under the categories “commission” and “fee/design.”
In addition, prosecutors said, Ms. Boone inflated the gallery’s stated expenses and income to fraudulently generate business losses when, in reality, the business was profitable.
Ms. Boone’s lawyers have argued that her troubled childhood led to mental health issues, a suicide attempt and drug and alcohol abuse. The poverty of her early life left her fearful that, despite her success, she would end up destitute and dependent upon others, they wrote, creating “a feeling of inevitable doom” and an “irrational fear that everything would fall apart.”
Prosecutors responded that Ms. Boone, in that case, might have been expected to have saved her undeclared, untaxed income instead of spending large amounts on apartment renovations and luxury purchases.
“Boone’s conduct clearly demonstrates that she was motivated by greed and a desire to maintain her lavish lifestyle,” they wrote. “Even if it meant breaking the law.”