A woman has been arrested in Argentina after a painting looted by the Nazis at the start of the Second World War mysteriously disappeared from her living-room wall.

Patricia Kadgien and her husband have been put under house arrest and accused of concealing a crime by police investigating the whereabouts of A Lady’s Portrait, a painting by the 17th-century Italian master Giuseppe Ghislandi.

The artwork was confiscated by the Nazis as part of the collection of Jacques Goudstikker, an art dealer based in Amsterdam who died while trying to flee the German invasion in 1940.

It was spotted hanging in the living-room of Ms Kadgien’s home when she listed it for sale through a local real estate agent. But when police went to the house in Mar del Plata last week, the painting had been replaced by a tapestry depicting horses, local newspaper La Nacion reported.

The painting, a portrait of the Contessa Colleoni, had been on the international list of lost art and the official Dutch list of artworks looted by the Nazis.

It is believed to have been taken to Argentina after the war by Ms Kadgien’s father, Friedrich Kadgien, who fled via Switzerland and Brazil and died in 1978, leaving his house to his two daughters.

Kadgien, described by US interrogators as “not a true Nazi” but “a snake of the lowest sort”, was an aide to Reichsmarshall and notorious art looter Hermann Göring during the Third Reich.

Goudstikker’s family, who successfully retrieved some 202 works of art from the Dutch state in 2007, have vowed to “bring back every single artwork robbed from Jacques’ collection”.

Kadgien and her husband, meanwhile, are reported to have claimed ownership of the painting and asked the local courts to take custody of it until the dispute has been resolved.