An accountant facing questions about his handling of a reclusive Montana copper mining heiress' fortune has resigned from administering her estate as a city official said the accountant and a lawyer underpaid her taxes by tens of millions of dollars.
Irving Kamsler resigned Tuesday as an executor of Huguette Clark's $400 million estate, lawyers for the estate said in a letter that noted that the official was about to ask a court to strip Kamsler and Clark lawyer Wallace Bock from their roles managing the estate.
Kamsler and Bock, while paid thousands of dollars a month for responsibilities that included dealing with the aged heiress' taxes, let $90 million in unpaid federal gift taxes and penalties accrue by early this year, according a probate court filing Tuesday by the Manhattan public administrator, an official who gets involved in certain estate cases.
And the administrator believes "this wrongful conduct is just the tip of the iceberg," wrote the public administrator's lawyers, David R. Gelfand and Peter Schram.
They said that Kamsler and Bock campaigned to get Clark to make a will that left them money and named them executors and that the accountant and attorney asked and got her to pay their legal fees in connection with a Manhattan district attorney's office investigation into their handling of her affairs.
Kamsler and Bock deny any wrongdoing in their dealings with Clark.
"Their entire, decades-long handling of her affairs was an ongoing effort to protect and preserve her chosen lifestyle and on her explicit instructions," said lawyer John Dadakis, representing the two as executors of her estate. "At all times, they were acting in their clients' best interests."
The public administrator's allegations add to a swirl of uncertainty surrounding the life and estate of Clark, a U.S. senator's daughter who owned the largest residence on Fifth Avenue and mansions in California and Connecticut but chose to live for decades in hospitals. The childless Clark was 104 when she died in May.
It emerged last month that Clark had signed two wills within six weeks in 2005 _ the first leaving most of her estate to great-nephews and great-nieces, and the second benefiting mainly her nurse and charity, creating an arts foundation that Bock and Kamsler would oversee and leaving them each $500,000.
Clark's family has accused Bock and Kamsler of plundering her fortune. Meanwhile, the Manhattan district attorney's office has been looking into how Clark's affairs were managed in the past two decades, people familiar with the probe have said. They spoke on condition of anonymity because they were not authorized to speak publicly about the matter. The DA's office declined to comment Wednesday. State Attorney General Eric Schneiderman's office also is keeping an eye on the Clark estate as part of its oversight role over estates and the execution of them.
Bock and Kamsler say they dutifully carried out Clark's wishes and protected her privacy.
"For the past three decades, Mr. Kamsler has served professionally and diligently as Ms. Clark's accountant," but the family members and public administrator "have made it impossible for him to carry out her wishes," his lawyer, Elizabeth Crotty, said Wednesday.
She said he was resigning "with the hope that Ms. Clark's last wishes be respected and to put the whole matter behind him."
A hearing is scheduled Friday in Manhattan Surrogate's Court on matters including the public administrator's request to remove Bock and Kamsler as executors. Their handling of the gift taxes showed they were "unfit for the execution of their office, by reason of their dishonesty, improvidence, waste and want of understanding," Deputy Public Administrator Joy A. Thompson wrote.
The filing and attached exhibits say Bock and Kamsler did pay millions of dollars in estimated gift taxes and some other payments on Clark's behalf, and they advised her at times about the tax burden on the millions of dollars' worth of gifts she gave to her nurse and others in her life.
But the attorney and accountant didn't file needed gift tax returns from 1997 to 2003, underpaid by $34 million for those years and never told Clark about the magnitude of the growing tax debt and penalties, the public administrator said.
Meanwhile, Bock used his legal authority to write gift checks of $60,000 to himself and $110,000 to Kamsler in 2009, and Bock got Clark to make gifts to Jewish settlements on the West Bank, where his daughter lives, the public administrator noted.
Clark's relatives _ three of whom unsuccessfully asked a Manhattan judge to appoint a guardian for her last year _ say the gift tax issue shows "Bock and Kamsler are guilty of, at best, misfeasance and malpractice, and at worst fraud," as their lawyer, John R. Morken, put it in a court filing Wednesday.
Bock and Kamsler's lawyers portray the family members as distantly related interlopers drawing scurrilous inferences from Clark's generosity toward the people who worked for her.
"Mrs. Clark was not the first wealthy individual to give away her fortune, nor will she be the last," lawyer Faith L. Carter, who also represents them as executors, wrote in a filing Wednesday.
Clark's father, Sen. William A. Clark, built one of America's biggest fortunes of its day mining copper, building railroads and founding Las Vegas.
Born in Paris to the 67-year-old U.S. senator and a 28-year-old Michigan woman, Clark was married briefly in her 20s to a bank clerk. They parted after only nine months.
After her mother's death, Clark's once lively life amid New York's cultured world _ with forays to Europe _ became more solitary, and she rarely ventured from her Fifth Avenue home. She moved into a hospital in the 1980s.
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