Implicated in Tax Fraud, Executors of Clark Estate Suspended

Implicated in Tax Fraud, Executors of Clark Estate Suspended

Wallace Bock and Irving H. Kamsler have been removed as executors of the estate of heiress Huguette Clark after being implicated in a tax fraud that could cost the estate more than $50 million in penalties, reports.

Manhattan surrogate Kristin Booth Glen suspended Bock, Clark's New York lawyer, and Kamsler, her accountant, from administering the $400 million estate after the city's office of the public administrator accused them of "fraud and gross negligence" for failing to file gift tax returns for the estate from 1997 to 2003. In addition, Kamsler was cited for filing gift tax returns from 2004 to 2009 that included "significant errors and misrepresentations." As a result, the estate now faces a tax bill in excess of $82 million, more than half of it due to penalties and interest fees.

Prior to the ruling, Kamsler, who secured power of attorney from Clark in 2009, offered to step down as executor. In November, a lawyer representing nearly all of Clark's relatives accused the men of "exploitation of a very elderly and extraordinarily wealthy woman." According to Reuters, Clark, who died earlier this year at the age of 104, had drafted two wills in 2005. The first offered a significant chunk of her assets to family, while the second benefited Bock, Kamsler, her nurse Hadassah Peri, and a foundation administered by the two executors.

"It appears from the allegations, supported by substantial documentary evidence, that the preliminary executors are unfit for the execution of their officer as fiduciaries by reason of dishonesty and improvidence, and for wasting estate assets," Booth Glen wrote in her ruling, "and that their continued service as fiduciaries could pose a risk of harm to the estate."

"." Reuters 12/27/2011.