Billionaire Bettencourt's inner financial circle are questioned

POLICE detained four figures close to France's richest woman for questioning yesterday as the scandal over her fortune, which has embroiled the French government, spread still further.

Francois-Marie Banier, a close friend of L'Oreal heiress Liliane Bettencourt; Patrice de Maistre, her wealth manager; Fabrice Goguel, her tax lawyer; and Carlos Vejarano, the manager of a property in the Seychelles islands, were pulled in by police.

They were questioned at the Parisian headquarters of the financial crimes division of France's public prosecutor over alleged tax evasion and money laundering, a spokeswoman said.

The four men were expected to be held for 48 hours, after which police must decide whether to press charges.

The affair has embarrassed president Nicolas Sarkozy's government because of allegations by Bettencourt's former bookkeeper that the billionairess and her late husband made illegal cash donations to conservative politicians in envelopes stuffed with money.

Banier, a society photographer, is already facing trial charged with abusing the 87-year-old Bettencourt's frailty to obtain gifts estimated at up to 1 billion euros.

Secret recordings made by a former butler in Bettencourt's household, of which transcripts were published by the French media last month, appeared to show her advisers discussing undeclared bank accounts and an island in the Seychelles, which was acquired through a bank in the tax haven of Liechtenstein.

Other alleged excerpts of the recordings, released to French media, Maistre tells Bettencourt he is thinking about transferring money out of accounts in Switzerland to Singapore, Hong Kong or Uruguay, noting that French tax authorities are cracking down on people with Swiss bank accounts.

Once the recordings became public, Maistre acknowledged that the L'Oreal heiress had 78 million euros in two foreign accounts, and he promised to get her affairs in order.

In the recordings, he also allegedly spoke about the island in the Seychelles, suggesting the heiress had not paid taxes on it and that it had been given to Banier.

The butler's lawyer, Antoine Gillot, has vouched for the recordings' authenticity.

"These four people are in custody for questioning about the contents of the secret recordings," the spokeswoman for Nanterre public prosecutor Philippe Courroye said.

Bettencourt is No 17 on Forbes magazine's rich list, with a net worth of 13.1 billion.

Mr Courroye has ordered three investigations into suspected laundering of the proceeds of tax evasion, invasion of privacy over the secret recordings, and the bookkeeper's allegations about an illegal donation to Mr Sarkozy's 2007 election campaign.

So far, no-one has been charged with any offence in those investigations.

Bettencourt, the main shareholder in the cosmetics giant, called in a statement on Wednesday for an audit into firms managing her fortune to show she knew "perfectly how to manage" her affairs.

The move came in response to a renewed attempt by her daughter, Francoise Meyers-Bettencourt, to have her mother declared mentally unfit and made a ward of court.

Olivier Metzner, lawyer for Meyers-Bettencourt, welcomed the fact that the four aides had been placed in custody.

"These four detentions are an important milestone because for months we have been denouncing the predators surrounding Liliane Bettencourt," he said.

The daughter has insisted she only wants to protect her ageing mother.

Meanwhile, Bettencourt told French television that her daughter's reaction was "petty." "Let her worry about herself," she said.

In the past several weeks, the family feud has also engulfed French labour minister Eric Woerth, who has denied receiving an illegal cash donation for Mr Sarkozy's campaign from the Bettencourts, as alleged by the former bookkeeper.

Mr Woerth, cleared by an official report of any interference in Bettencourt's tax affairs when he was budget minister and leading a crackdown on tax fraud, has stepped down as treasurer of the ruling UMP party and his wife has quit her job with Bettencourt's wealth manager.

Mr Sarkozy has vigorously dismissed the accusations. He has claimed his opponents were trying to destabilise the government as it tried to reform the pension system. Francois-Marie Banier, top right, is among those held Main Picture: AP

Thierry Leveque and PIERRE-ANTOINE SOUCHARD

Police detained four figures close to France's richest woman for questioning yesterday as the scandal over her fortune, which has embroiled the French government, spread still further.

Francois-Marie Banier, a close friend of L'Oreal heiress Liliane Bettencourt; Patrice de Maistre, her wealth manager; Fabrice Goguel, her tax lawyer; and Carlos Vejarano, the manager of a property in the Seychelles islands, were pulled in by police.

They were questioned at the Parisian headquarters of the financial crimes division of France's public prosecutor over alleged tax evasion and money laundering, a spokeswoman said.

The four men were expected to be held for 48 hours, after which police must decide whether to press charges.

The affair has embarrassed president Nicolas Sarkozy's government because of allegations by Bettencourt's former bookkeeper that the billionairess and her late husband made illegal cash donations to conservative politicians in envelopes stuffed with money.

Banier, a society photographer, is already facing trial charged with abusing the 87-year-old Bettencourt's frailty to obtain gifts estimated at up to 1 billion euros.

Secret recordings made by a former butler in Bettencourt's household, of which transcripts were published by the French media last month, appeared to show her advisers discussing undeclared bank accounts and an island in the Seychelles, which was acquired through a bank in the tax haven of Liechtenstein.

Other alleged excerpts of the recordings, released to French media, Maistre tells Bettencourt he is thinking about transferring money out of accounts in Switzerland to Singapore, Hong Kong or Uruguay, noting that French tax authorities are cracking down on people with Swiss bank accounts.

Once the recordings became public, Maistre acknowledged that the L'Oreal heiress had 78 million euros in two foreign accounts, and he promised to get her affairs in order.

In the recordings, he also allegedly spoke about the island in the Seychelles, suggesting the heiress had not paid taxes on it and that it had been given to Banier.

The butler's lawyer, Antoine Gillot, has vouched for the recordings' authenticity.

"These four people are in custody for questioning about the contents of the secret recordings," the spokeswoman for Nanterre public prosecutor Philippe Courroye said.

Bettencourt is No 17 on Forbes magazine's rich list, with a net worth of 13.1 billion.

Mr Courroye has ordered three investigations into suspected laundering of the proceeds of tax evasion, invasion of privacy over the secret recordings, and the bookkeeper's allegations about an illegal donation to Mr Sarkozy's 2007 election campaign.

So far, no-one has been charged with any offence in those investigations.

Bettencourt, the main shareholder in the cosmetics giant, called in a statement on Wednesday for an audit into firms managing her fortune to show she knew "perfectly how to manage" her affairs.

The move came in response to a renewed attempt by her daughter, Francoise Meyers-Bettencourt, to have her mother declared mentally unfit and made a ward of court.

Olivier Metzner, lawyer for Meyers-Bettencourt, welcomed the fact that the four aides had been placed in custody.

"These four detentions are an important milestone because for months we have been denouncing the predators surrounding Liliane Bettencourt," he said.

The daughter has insisted she only wants to protect her ageing mother.

Meanwhile, Bettencourt told French television that her daughter's reaction was "petty." "Let her worry about herself," she said.

In the past several weeks, the family feud has also engulfed French labour minister Eric Woerth, who has denied receiving an illegal cash donation for Mr Sarkozy's campaign from the Bettencourts, as alleged by the former bookkeeper.

Mr Woerth, cleared by an official report of any interference in Bettencourt's tax affairs when he was budget minister and leading a crackdown on tax fraud, has stepped down as treasurer of the ruling UMP party and his wife has quit her job with Bettencourt's wealth manager.

Mr Sarkozy has vigorously dismissed the accusations. He has claimed his opponents were trying to destabilise the government as it tried to reform the pension system.