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  • Judge bounces attorney and accountant from estate of heiress Huguette Clark

    W.A. Clark Memorial Library

    Huguette Clark's estate will now be managed by a public official, not her attorney and accountant. Still to be determined: Which of her documented wills should the court honor?

    NEW YORK — Based on "shocking" evidence of tax fraud, a judge on Friday suspended the attorney and accountant for reclusive copper heiress Huguette Clark from handling her $400 million estate.

    The judge said there was more than enough evidence that the two men engaged in a tax fraud that allowed the elderly woman to run up an IRS bill of $90 million in unpaid gift taxes, interest and potential penalties.

    The decision costs each man about $8 million he would have earned as an executor.

    Also Friday, a remaining executor of the estate said he will try to recover at least one of the gifts given from Clark's accounts in recent years, a $5 million check written by Clark's attorney to Clark's registered nurse, Hadassah Peri. Clark's attorney had no authority to make that gift, the executor alleged. The $5 million was part of about $26 million given to the nurse over the past 15 years, even before Clark left more than $30 million to Peri in her will.


    In Surrogate's Court in Manhattan, Surrogate Kristin Booth Glen took away the powers of Clark's attorney, Wallace "Wally" Bock, and accountant, Irving Kamsler. The two men remain under criminal investigation by the Manhattan district attorney for the way they managed her estate. They have not been charged with any crime and have said they acted appropriately.

    The judge only suspended the men's privileges in handling her estate, instead of revoking them permanently, because their attorneys said a conflict of interest has arisen, apparently indicating that the two men are starting to tell different stories about the handling of Clark's affairs over the past 15 years. Until that is sorted out, attorney Barry Vasios said, the attorneys couldn't file an answer to the claim of tax fraud.

    Even without hearing from the two men, the judge said she couldn't imagine how they could refute the claim that they are "unfit to serve" for wasting money from the estate, violating rules of conduct, dealing dishonestly with authorities and violating their fiduciary duty. She called the allegations shocking and suspended them immediately. If they want back into the case, she said, they can file a petition. And she said the two men may have to pay some of their own attorney fees, instead of having them paid by the estate, if their delay or dishonesty ran up the legal bills.

    The estate will now be managed entirely by attorneys for the public administrator, who earlier this week alleged the tax fraud. Details on the allegations are in our earlier story: Tax fraud alleged in estate of heiress Huguette Clark; accountant resigns. Earlier this week, the accountant, Kamsler, told the court through an attorney that he planned to resign as an executor. He had not yet resigned by the time of Friday's hearing, however.

    An attorney for the public administrator, Peter Schram, said an expert in legal ethics "could tell you how many ethical considerations and disciplinary rules Mr. Bock has violated. My guess is you'd need two hands and a couple of toes to count them."

    Huguette Clark, daughter of William A. Clark, who was a senator from Montana and a copper magnate.

    The judge also ruled on a second question, whether to allow Clark's relatives, descendants from her father's first marriage, to become parties to the case during the accounting of the estate. The judge blocked the family from entering the case now, saying that the interests of the estate are being well looked after by the public administrator, who was appointed at first as a third temporary executor to watch over Bock and Kamsler. This ruling will not keep the family from entering the case later. The family's entry was opposed by Clark's nurse, Peri.

    Clark, who died in May at age 104, gained public attention in a series of articles on msnbc.com over the past two years, focusing at first on the mystery of her empty mansions and then the financial dealings of her attorney and accountant. The full series of articles is at http://clark.msnbc.com. Born in 1906, Clark was the youngest child of former U.S. Sen. William Andrews Clark (1839-1925), a copper miner and U.S. senator from Montana, said to be one of the richest men in the world. Below are links to the full story.

    A dozen lawyers stood before Judge Glen on Friday morning in the courtroom in lower Manhattan, less than a mile from the office where Clark's father managed his mines, railroads and other properties until his death in 1925. Huguette, born in Paris in 1906, was his youngest daughter.

    Clark signed two wills, in 2005, at age 98. The first left $5 million to the nurse, and the rest to the relatives. The second, signed just six weeks later, left nothing to the family, more than $30 million to the nurse, about $12 million to a goddaughter, $500,000 each to her attorney and accountant, $1 million to Beth Israel Hospital in New York City, $100,000 to her physician, a Monet painting worth about $25 million to the Corcoran Gallery of Art in Washington. It also set up a charitable foundation to run an art museum at her oceanfront estate in Santa Barbara, Calif., to be controlled by her attorney and accountant. Her apartments on Fifth Avenue in New York City and her country home in Connecticut would presumably be liquidated.

    The public administrator alleges that while Clark lived as a recluse in New York City hospital rooms for the last 20 years of her life, attorney Bock and accountant Kamsler:

    • Failed to file federal gift tax returns for Clark for the years 1997 through 2003, when she made approximately $56 million in gifts to individuals. The gift tax and generation-skipping transfer (GST) tax due would have been about $41.5 million.
    • Charged her for filing tax returns that were not filed.
    • Paid only $7.5 million in estimated tax payments toward the gift tax in those years.
    • Failed to pay the remaining $34 million during the years since, exposing her to millions in IRS interest and penalties for failure to file.
    • Failed to tell Clark about the unpaid taxes or possible interest and penalties, even though she had sufficient liquid assets to pay the bill in full.
    • Filed false returns with the IRS for the years 2004 through 2009, claiming that previous gift tax returns had been filed, and understating Clark's current tax liabilities by more than $7 million.
    • Underreported and underpaid by millions her federal taxes.
    • Misrepresented to the IRS that returns had been filed.
    • Lied to the IRS, with Kamsler claiming he was unaware of a $5 million gift to Clark's nurse, when documents show he listed that gift on a profit and loss statement seven months earlier.
    • Lied to the public administrator, claiming that they were searching for the gift tax returns, until the IRS disclosed that none had been filed.

    The new allegations raise the possibility that the men could face federal charges, with the public administrator noting that it is a felony to willfully submit fraudulent tax returns.

    The accountant, Kamsler, 64, from the Bronx, N.Y., is a convicted felon and a registered sex offender who pleaded guilty in 2008 to attempting to distribute indecent materials to teenage girls in a chat room on AOL, under the moniker "IRV1040." The court granted Kamsler a "relief from civil disabilities," a document that allowed him to keep his state license as a certified public accountant. The attorney, Bock, 79, is from Queens, N.Y.

    Msnbc.com reported last year that the two men also handled the affairs of another elderly client, Donald Wallace, who in fact was the previous attorney for Huguette Clark. After the man's will was revised six times, during years when his relatives said he was suffering from dementia, Bock and Kamsler ended up as his executors and also beneficiaries in his will, getting his New York apartment and his Mercedes.

    An attorney representing Bock and Kamsler in the estate case, John Dadakis of the firm of Holland and Knight, issued this statement Wednesday through a spokesman: "For 30 years, Irving Kamsler was Mrs. Clark's accountant, and for 15 years Wallace Bock was her attorney. There is no allegation in the papers filed that either individual was taking anything out of her account for themselves. Their entire handling of her affairs was an effort to protect and preserve Mrs. Clark's chosen lifestyle."

    ---

    Documents (PDF files)

    Family reply to nurse Peri and Bock and Kamsler, Dec. 21, 2011

    Public administrator's petition to remove Bock and Kamsler, Dec. 20, 2011

    Bock and Kamsler reply to the family's motion to intervene, Dec. 16, 2011

    Nurse Peri's motion opposing the family entering the case, Dec. 7, 2011

    Family motion to intervene in the estate case, Nov. 28, 2011

    Huguette Clark's last will and testament, signed April 19, 2005

    Huguette Clark's previous will, signed March 7, 2005

    Family's petition seeking a guardian for Huguette Clark, September 2010

    Attorney Bock's sworn statement to the court, September 2010

    Judge's ruling rejecting her family's guardianship petition, September 2010

    Kamsler letter informing Clark of his guilty plea, February 2009

    Kamsler's criminal court file and investigator's report

    ---

    Previous stories in the Huguette Clark mystery on msnbc.com:

    Archive of all stories, photos and videos

    Photo narrative, "The Clarks: An American story of wealth, scandal and mystery," Feb. 26, 2010.

    Printable version of the photo narrative, Feb. 26, 2010. 

    Clark family notes and sources, Feb. 26, 2010.

    Investigative report, part one, "At 104, the mysterious heiress Huguette Clark is alone now: Relatives are kept away. Only her accountant and attorney visit. Who protects HuguetteClark, with 3 empty homes and no heirs?" Aug. 19, 2010.

    Investigative report, part two, "Who is watching Huguette Clark's millions? Reclusive heiress's assets are sold by two advisers, one an accountant with a felony conviction. Another elderly client signed over his property to the same accountant and attorney," Aug. 20, 2010. 

    "Criminal probe begins into the finances of reclusive heiress Huguette Clark: Manhattan DA's Elder Abuse Unit is on the case. The same unit prosecuted the Brooke Astor case — though Clark has about four times the wealth," Aug. 24, 2010. 

    "Report sparks welfare check on heiress Huguette Clark," Aug. 25, 2010. 

    "Generosity of an heiress: four homes for a nurse, gifts for attorney's family," Sept. 1, 2010. 

    "Huguette Clark, the reclusive heiress, has signed a will, attorney says," Sept. 2, 2010.

    "Family of copper heiress asks court to protect her from attorney, accountant," Sept. 3, 2010.

    "Attorney for 104-year-old heiress defends his handling of her finances," Sept. 7, 2010. 

    "Judge leaves pair under investigation in control of heiress Huguette Clark's fortune," Sept. 9, 2010. 

    "Huguette Clark, the reclusive copper heiress, dies at 104," May 24, 2011.

    "Family excluded from Huguette Clark burial," May 26, 2011.

    "Heiress Huguette Clark's will leaves $1 million to advisers," June 22, 2011.

    "The 1 percent of the 1 percent: How Huguette Clark's millions were spent," Nov. 19, 2011.

    "A $400 miillion twist: Huguette Clark signed two wills, one to her family," Nov. 28, 2011.

    "Tax fraud alleged in estate of heiress Huguette Clark; accountant resigns," Dec. 21, 2011.

    "Nurse, in line to inherit millions, battles family of heiress Huguette Clark," Dec. 22, 2011.

     

  • Nurse, in line to inherit millions more, battles family of Huguette Clark

    W.A. Clark Memorial Library

    Huguette Clark with one of her prized dolls. She reached age 98 without declaring who should receive her copper-mining fortune, and then signed two contradictory wills back to back. The latest will leaves much of her money, and her dolls, to her longtime nurse.

    NEW YORK — The longtime private registered nurse for heiress Huguette Clark, named to receive more than $30 million in her last will and testament, will be fighting in court on Friday to keep Clark's relatives from poking into the way Clark's money was spent.

    The nurse, Hadassah Peri, an immigrant from the Philippines, already owns a $200,000 Bentley Arnage luxury sedan and five houses. Money for four of those houses was given to her through the years by Clark, whom she joined almost 20 years ago when assigned by a home care agency.

    The total amount of money already given to Peri was about $26 million, according to court documents, even before the amounts left in the will. That's a far higher figure than previously disclosed. The reclusive Clark, heir to a share of one of America's largest mining fortunes from the 19th century, lived out her last decades in modest hospital rooms in New York City before dying in May at age 104.

    Nineteen of Clark's relatives have asked the court to make them a party to the first stage of the legal battle, the accounting for Clark's $400 million fortune. It's presumed that this step will lead to the family contesting Clark's last will, which leaves nothing to family. The family has filed in court a previous will, signed just six weeks before the last one. That earlier document left nearly everything to the family, and only $5 million to the nurse.


    Her nurse's attorney this month asked the court to keep the family out of court, supporting an effort by Clark's attorney and accountant to block the family. The attorney and accountant portray the relatives as distant, having no contact with Clark. The 19 relatives are descended from the first marriage of Clark's father, the former U.S. Sen. William Andrews Clark (1839-1925).

    Read the related story: Tax fraud alleged in estate of heiress; accountant resigns.

    On Friday the parties will argue in front of the judge in Surrogate's Court in Manhattan, Surrogate Kristin Booth Glen.

    Also on the judge's plate: whether or not Clark's longtime attorney should remain as an executor of her estate. That issue took the spotlight this week, as Clark's accountant resigned as an executor, just before a public official investigating Clark's finances accused the attorney and executive of fraud in handling Clark's taxes. The attorney and accountant, also the subject of an investigation by the Manhattan district attorney, have said they handled Clark's finances appropriately and according to her wishes.

    See the related story: Tax fraud alleged in estate of heiress Huguette Clark; accountant resigns.

    Speaking for nurse Peri, attorney Harvey E. Corn argued in court documents on Dec. 7 that Clark gave the money, and her doll collection, to her out of "gratitude for Ms. Peri's devoted service." Corn says that "Ms. Peri saw or communicated with the Decedent almost every day" during her nearly 20 years of service. And he says that hospital records from the six months around the signing of the wills show that Clark was in good health, "conversant, cheerful, well read and engaged in taking care of her personal affairs." Corn argues that the family has no legal standing, and that their intervention will cause delay and wasting of the estate in additional legal fees.

    The family attorney, John R. Morken, replied in court papers on Wednesday. He said family members were not so distant as they have been portrayed, and had shown concern for Clark while she was alive. Family members have said their contacts with Clark were abruptly cut off by her attorney around the same time the wills were written, in 2005, when she was 98 years old. Then, in 2010 after msnbc.com disclosed questions about the financial dealings of Clark's attorney and accountant, three family members asked a court to appoint a guardian for her. That request was denied without even a hearing in court.

    "The litigation in this Estate is not just about the probate of a will," Morken argued. "Rather, it is about what transpired during the last twenty years of Huguette Clark's life. This inquiry requires an open airing of the facts. The Family Members should not be denied the opportunity to participate in same. They were denied that opportunity when their Guardianship Petition was dismissed in 2010, while Huguette was alive. They should not be denied that opportunity again." Several times in the document, Morken suggests that Peri enabled or cooperated with the attorney and accountant in getting Clark to sign a second will that benefitted them all.

    Hadassah Peri has not spoken publicly about Clark, but a press agent issued a statement on her behalf in June after she was named in the will: "I saw Madame Clark virtually every day for the 20 years. I was her private duty nurse but also her close friend. I knew her as a kind and generous person, with whom I shared many wonderful moments and whom I loved very much. I am profoundly sad at her passing, awed at the generosity she has shown me and my family, and eternally grateful. Just as Madame Clark demonstrated kindness toward others in her actions, so, too, will I and my family devote a substantial portion of this bequest toward making the world a better place for all people."

    The public official investigating Clark's finances, the New York County public administrator's office, has already said in court papers that it might seek to "claw back" into the estate some of the gifts given from Clark's accounts while she lived. The administrator said the powers of attorney that Clark signed over to her attorney and accountant did not include the authority to give gifts, including a $5 million check written to Peri in 2009, after Clark herself stopped writing checks on her account. 

    If that clawback effort is successful, and if the second will is thrown out, Peri could not only lose the large bequest but could also have to pay back some of what she now has. Morken calls that Peri's "day of reckoning."

    See below the full documents from the nurse, the family, and the attorney and accountant.

    Though she inherited one of the great mining fortunes of the 19th century, Huguette (pronounced "hue-GET") Marcelle Clark lived quietly into the 21st century, secluded under fake names in a hospital room for more than two decades despite being in relatively good physical health. Intensely shy, she was almost entirely alone, aside from her private nurse, other helpers and occasional visits by her accountant. One of her former attorneys represented her for 20 years without meeting her face to face, instead talking to her through a closed door.

    In the last year of her life, after her three empty mansions drew the attention of a reporter for msnbc.com in late 2009, she became a subject of public fascination, a trending topic of searches on Google and Yahoo, pictured on the cover of the New York tabloids, with fan pages on Facebook, a biography on Wikipedia, and her story read by tens of millions — though the last known photograph of her was made in 1930.

    Huguette Clark was married only briefly and had no children. Her only full sister died at age 16 and had no children. Her mother had no other children. Under state law that leaves 21 "intestate distributees" — the relatives who would inherit her estate if she left no will or if the court chooses to uphold the earlier will instead of the later one. Nineteen of the 21 are in court now. Those 21 relatives are descended from three of the children from Sen. Clark's first marriage: 13 half-grandnieces and half-grandnephews (and their children), and eight half-great-grandnieces and half-great-grandnephews (and their children). Counting all the children of these relatives, there are about 50 living descendants of Clark's father.

    ---

    Documents (PDF files)

    Family reply to nurse Peri and Bock and Kamsler, Dec. 21, 2011

    Public administrator's petition to remove Bock and Kamsler, Dec. 20, 2011

    Bock and Kamsler reply to the family's motion to intervene, Dec. 16, 2011

    Nurse Peri's motion opposing the family entering the case, Dec. 7, 2011

    Family motion to intervene in the estate case, Nov. 28, 2011

    Huguette Clark's last will and testament, signed April 19, 2005

    Huguette Clark's previous will, signed March 7, 2005

    Family's petition seeking a guardian for Huguette Clark, September 2010

    Attorney Bock's sworn statement to the court, September 2010

    Judge's ruling rejecting her family's guardianship petition, September 2010

    Kamsler letter informing Clark of his guilty plea, February 2009

    Kamsler's criminal court file and investigator's report

    ---

    Previous stories in the Huguette Clark mystery on msnbc.com:

    Archive of all stories, photos and videos

    Photo narrative, "The Clarks: An American story of wealth, scandal and mystery," Feb. 26, 2010.

    Printable version of the photo narrative, Feb. 26, 2010. 

    Clark family notes and sources, Feb. 26, 2010.

    Investigative report, part one, "At 104, the mysterious heiress Huguette Clark is alone now: Relatives are kept away. Only her accountant and attorney visit. Who protects HuguetteClark, with 3 empty homes and no heirs?" Aug. 19, 2010.

    Investigative report, part two, "Who is watching Huguette Clark's millions? Reclusive heiress's assets are sold by two advisers, one an accountant with a felony conviction. Another elderly client signed over his property to the same accountant and attorney," Aug. 20, 2010. 

    "Criminal probe begins into the finances of reclusive heiress Huguette Clark: Manhattan DA's Elder Abuse Unit is on the case. The same unit prosecuted the Brooke Astor case — though Clark has about four times the wealth," Aug. 24, 2010. 

    "Report sparks welfare check on heiress Huguette Clark," Aug. 25, 2010. 

    "Generosity of an heiress: four homes for a nurse, gifts for attorney's family," Sept. 1, 2010. 

    "Huguette Clark, the reclusive heiress, has signed a will, attorney says," Sept. 2, 2010.

    "Family of copper heiress asks court to protect her from attorney, accountant," Sept. 3, 2010.

    "Attorney for 104-year-old heiress defends his handling of her finances," Sept. 7, 2010. 

    "Judge leaves pair under investigation in control of heiress Huguette Clark's fortune," Sept. 9, 2010. 

    "Huguette Clark, the reclusive copper heiress, dies at 104," May 24, 2011.

    "Family excluded from Huguette Clark burial," May 26, 2011.

    "Heiress Huguette Clark's will leaves $1 million to advisers," June 22, 2011.

    "The 1 percent of the 1 percent: How Huguette Clark's millions were spent," Nov. 19, 2011.

    "A $400 miillion twist: Huguette Clark signed two wills, one to her family," Nov. 28, 2011.

    "Tax fraud alleged in estate of heiress Huguette Clark; accountant resigns," Dec. 21, 2011.

     

  • Tax fraud alleged in estate of heiress Huguette Clark; accountant resigns

    Associated Press

    This is the last known photo of Huguette Clark, taken 80 years ago. She hid away in a New York hospital room for at least the past 22 years, until her death in May. This photo was made on Aug. 11, 1930, the day of her divorce, in Reno, Nev. Her marriage lasted two years. She had no children.

    New York — A New York official has accused the attorney and accountant for mysterious heiress Huguette Clark of a tax fraud that could cost her estate $50 million in IRS penalties. While the men denied any wrongdoing, the accountant resigned this week from handling her $400 million estate just before the allegations were leveled in court documents.

    The allegation was made by the office of the public administrator of New York County, who was appointed by the court as a third executor, in effect to watch the actions of Clark's attorney and accountant. The public administrator, Ethel J. Griffin, asked the court on Tuesday to remove attorney Wallace "Wally" Bock and accountant Irving Kamsler as executors, a position that would normally pay each of them about 2 percent of her estate, or roughly $8 million each.

    Read the related story: Nurse, in line to inherit millions, battles family of heiress Huguette Clark.

    Document: Read the full petition at msnbc.com. (PDF file opens in a new window.)


    Clark, who died in May at age 104, gained public attention in a series of articles on msnbc.com over the past two years, focusing at first on the mystery of her empty mansions and then the financial dealings of her attorney and accountant. The full series of articles is at http://clark.msnbc.com. Born in 1906, Clark was the youngest child of former U.S. Sen. William Andrews Clark (1839-1925), a copper miner and U.S. senator from Montana, said to be one of the richest men in the world.

    The public administrator alleges that while Huguette Clark lived as a recluse in New York City hospital rooms, attorney Bock and accountant Kamsler:

    • Failed to file federal gift tax returns for Clark for the years 1997 through 2003, when she made approximately $56 million in gifts to individuals. The gift tax and generation-skipping transfer (GST) tax due would have been about $41.5 million.
    • Charged her for filing tax returns that were not filed.
    • Paid only $7.5 million in estimated tax payments toward the gift tax in those years.
    • Failed to pay the remaining $34 million during the years since, exposing her to millions in IRS interest and penalties for failure to file.
    • Failed to tell Clark about the unpaid taxes or possible interest and penalties, even though she had sufficient liquid assets to pay the bill in full.
    • Filed false returns with the IRS for the years 2004 through 2009, claiming that previous gift tax returns had been filed, and understating Clark's current tax liabilities by more than $7 million.
    • Underreported and underpaid by millions her federal taxes.
    • Misrepresented to the IRS that returns had been filed.
    • Lied to the IRS, with Kamsler claiming he was unaware of a $5 million gift to Clark's nurse, when documents show he listed that gift on a profit and loss statement seven months earlier.
    • Lied to the public administrator, claiming that they were searching for the gift tax returns, until the IRS disclosed that none had been filed.

    "By 2011, Mrs. Clark owed $34,000,000 in gift and GST taxes for the years 1997 through 2003; plus potential late filing and late payment penalties in excess of $16,000,000; plus interest on the unpaid taxes and potential penalties in the amount of approximately $32,000,000; for a total liability to the IRS in excess of $82,000,000," the public administrator alleges, adding that "neither Bock nor Kamsler made Mrs. Clark aware of this tax liability."

    Claudio Papapietro

    Irving Kamsler, Huguette Clark's longtime accountant, resigned as her executor this week. He is shown outside court on Long Island after he pleaded guilty in October 2008 to attempting to disseminate indecent material to minors on AOL. The court sentenced him to five years of probation, but he was allowed to keep his license as a certified public accountant. In a letter he told his client only the barest details of the case.

    The tax bill was rising at the rate of $9,000 per day, the public administrator calculated.

    "Bock and Kamsler have demonstrated," the public administrator wrote, "that they are unfit for the execution of their office as Preliminary Executors, by reason of their dishonesty, improvidence, waste and want of understanding, both while Mrs. Clark was alive and subequent to their appointment." In addition, the public administrator's office said it is investigating what it believes are other violations of trust, including improper solicitation of gifts, abuse of powers of attorney, and making gifts without authority. The case is being handled by attorneys for the public administrator, including Peter Schram, David R. Gelfand and Georgiana J. Slade.

    An attorney for Kamsler in the estate case wrote to the judge informing her that Kamsler would resign. That letter was filed in court on Tuesday, just ahead of the filing by the public administrator, and was released by the court on Wednesday.

    Kamsler's criminal defense attorney, Elizabeth Crotty, would not answer questions but issued a statement on Wednesday: "For the past 3 decades, Mr. Kamsler has served professionally and diligently as Ms. Clark's accountant. Although Mr. Kamsler is fully capable of remaining as a preliminary executor to Ms. Clark's estate, the distant family members and the Public Administrator have made it impossible for him to carry out her wishes. Therefore, Mr. Kamsler is voluntarily removing himself as Preliminary Executor, with the hope that Ms. Clark's last wishes be respected and to put this whole matter behind him."

    An attorney representing Bock and Kamsler in the estate case, John Dadakis of the firm of Holland and Knight, issued this statement Wednesday through a spokesman: "For 30 years, Irving Kamsler was Mrs. Clark's accountant, and for 15 years Wallace Bock was her attorney. There is no allegation in the paper's filed that either individual was taking anything out of her account for themselves. Their entire handling of her affairs was an effort to protect and preserve Mrs. Clark's chosen lifestyle."

    Bock and Kamsler are already under investigation by the Manhattan district attorney, who is looking into their handling of Clark's finances; no charges have been filed, and the investigation remains open.

    Christopher Sadowski

    Attorney Wallace "Wally" Bock says he has always done exactly what his client, heiress Huguette Clark, has asked. He acknowledged soliciting from her a gift of $1.5 million for the community where his daughter and grandchildren live. Court records show the amount to be $1.85 million. He remains an executor of her estate, at least until a court hearing planned for Friday.

    The new allegations raise the possibility that they could face federal charges, with the public administrator noting that it is a felony to willfully submit fraudulent tax returns.

    Kamsler, 64, from the Bronx, N.Y., is a convicted felon and a registered sex offender who pleaded guilty in 2008 to attempting to distribute indecent materials to teenage girls in a chat room on AOL, under the moniker "IRV1040." Bock, 79, is from Queens, N.Y.

    Msnbc.com reported last year that the two men also handled the affairs of another elderly client, Donald Wallace, who in fact was the previous attorney for Huguette Clark. After the man's will was revised six times, during years when his relatives said he was suffering from dementia, Bock and Kamsler ended up as his executors and also beneficiaries in his will, getting his New York apartment and his Mercedes.

    And the allegations may bolster the request by Clark's relatives that they be allowed to intervene in the case. The relatives disclosed last month that Clark signed two wills at age 98 in 2005, six weeks apart: The first benefitted mostly her family, the second cut out the family altogether and included $500,000 each in bequests to attorney Bock and accountant Kamsler, who also stood to benefit as trustees of a charitable foundation and art museum to be established in her home in Santa Barbara, Calif. The family has not yet officially challenged that second will but has asked to intervene in a preliminary stage of the case, the accounting of the estate.

    The public administrator makes a point in the document of saying that the gifts made by Bock and Kamsler from Clark's accounts may not have been valid, because the men may not have had authority to make those gifts. "The Public Administrator will seek, in a separate proceeding, to clawback into the Estate any gifts deemed to be invalid."

    The public administrator notes that Kamsler lists himself in online biographies as a specialist in "gift tax planning and preparation," and Bock bills himself as having "substantial expertise in estate planning."

    The allegations by the public administrator were first reported Wednesday by The Associated Press.

    A hearing is scheduled on Friday in Surrogate's Court in Manhattan on the family's request to intervene in the case, and the public administrator's request to remove Bock and Kamsler.

    ---

    Documents (PDF files)

    Family reply to nurse and attorney and accountant, Dec. 21, 2011

    Public administrator's petition to remove attorney and accountant, Dec. 20, 2011

    Public administrator's petition to remove Bock and Kamsler, Dec. 20, 2011

    Bock and Kamsler reply to the family's motion to intervene, Dec. 16, 2011

    Family motion to intervene in the estate case, Nov. 28, 2011

    Huguette Clark's last will and testament, signed April 19, 2005

    Huguette Clark's previous will, signed March 7, 2005

    Family's petition seeking a guardian for Huguette Clark, September 2010

    Attorney Bock's sworn statement to the court, September 2010

    Judge's ruling rejecting her family's guardianship petition, September 2010

    Kamsler letter informing Clark of his guilty plea, February 2009

    Kamsler's criminal court file and investigator's report

    ---

    Stories in the Huguette Clark mystery on msnbc.com:

    Archive of all stories, photos and videos

    Photo narrative, "The Clarks: An American story of wealth, scandal and mystery," Feb. 26, 2010.

    Printable version of the photo narrative, Feb. 26, 2010. 

    Clark family notes and sources, Feb. 26, 2010.

    Investigative report, part one, "At 104, the mysterious heiress Huguette Clark is alone now: Relatives are kept away. Only her accountant and attorney visit. Who protects Huguette Clark, with 3 empty homes and no heirs?" Aug. 19, 2010.

    Investigative report, part two, "Who is watching Huguette Clark's millions? Reclusive heiress's assets are sold by two advisers, one an accountant with a felony conviction. Another elderly client signed over his property to the same accountant and attorney," Aug. 20, 2010. 

    "Criminal probe begins into the finances of reclusive heiress Huguette Clark: Manhattan DA's Elder Abuse Unit is on the case. The same unit prosecuted the Brooke Astor case — though Clark has about four times the wealth," Aug. 24, 2010. 

    "Report sparks welfare check on heiress Huguette Clark," Aug. 25, 2010. 

    "Generosity of an heiress: four homes for a nurse, gifts for attorney's family," Sept. 1, 2010. 

    "Huguette Clark, the reclusive heiress, has signed a will, attorney says," Sept. 2, 2010.

    "Family of copper heiress asks court to protect her from attorney, accountant," Sept. 3, 2010.

    "Attorney for 104-year-old heiress defends his handling of her finances," Sept. 7, 2010. 

    "Judge leaves pair under investigation in control of heiress Huguette Clark's fortune," Sept. 9, 2010. 

    "Huguette Clark, the reclusive copper heiress, dies at 104," May 24, 2011.

    "Family excluded from Huguette Clark burial," May 26, 2011.

    "Heiress Huguette Clark's will leaves $1 million to advisers," June 22, 2011.

    "The 1 percent of the 1 percent: How Huguette Clark's millions were spent," Nov. 19, 2011.

    "A $400 miillion twist: Huguette Clark signed two wills, one to her family," Nov. 28, 2011.

    "Nurse, in line to inherit millions, battles family of heiress Huguette Clark," Dec. 22, 2011.

     

  • Manning defense's focus on gender identity disorder alarms some

    Joshua Roberts / Reuters

    Army Pfc. Bradley Manning leaves U.S. Magistrate Court at Fort Meade, Md., on Tuesday.

    Raising the hackles of some attorneys who work on transgender legal issues, defense attorneys for Bradley Manning apparently intend to make an almost novel legal argument -- that the Army private was suffering from gender identity disorder when his alleged crimes were committed -- if his case proceeds to court martial as expected.

    In the first five days of Manning’s preliminary hearing at Fort Meade, Md., prosecutors and defense attorneys have both presented evidence that Manning, accused of leaking hundreds of thousands of secret government documents to the WikiLeaks website, was wrestling with gender issues in the period leading up to the publication of the documents.

    The defense stated Saturday that Manning, 24, had written to one of his supervisors when he was stationed in Iraq before his arrest and said he had concluded he was suffering from gender identity disorder, which is classified as a medical disorder in the International Statistical Classification of Diseases and Related Health Problems. He included a photo of himself dressed as a woman in the letter and said the issue was affecting his ability to do his job or think clearly.


    A defense attorney and a witness also stated that Manning had created a Facebook profile and opened at least one email account using the name “Breanna Manning,” which the attorney described as an “alter-ego.”

    As the hearing continued Tuesday, prosecutors presented testimony indicating that Manning had used another soldier’s laptop to order a book on female facial reconstructive surgery from Amazon.com that he had shipped to his Potomac address.

    A search of Amazon.com for the term “female facial reconstructive surgery” returns just one title, “Facial Feminization Surgery: A Guide for the Transgendered Woman.”

    Also Tuesday, Manning’s attorneys did little to challenge testimony by prosecution witnesses tying Manning to WikiLeaks founder Julian Assange and other electronic evidence collected in the case.

    Manning is charged with aiding the enemy and violating the Espionage Act. If found guilty, he could be sentenced to life in prison.

    If Manning’s case does go to court martial, his attorneys will apparently be just the second defense team to attempt to use a gender identity disorder as at least a partial defense in a military case, according to Jack King, a staff attorney with the National Association of Criminal Defense Attorneys specializing in mental health issues.

    The only other case on record, he said, involved Karen Davis, a Navy electrician's mate, second class, formerly known as Charles Marx, who was prosecuted in the mid-1980s “for wearing women's clothing (a skirt, nylons, a women's blouse, a bra, women's fashion jeans, nail polish, a purse, and a wig) on numerous occasions while at the Puget Sound Naval Shipyard.”

    In appealing her court martial in 1988, Davis' attorneys argued that such conduct was not illegal. They also stated that, while living as Marx, she had been diagnosed by several Navy psychiatrists as having gender identity disorder and that cross-dressing was therapeutic.

    The military appeals court allowed her dishonorable discharge to stand for the reason that cross-dressing was “prejudicial to good order and discipline and discrediting of the Armed Forces."

    King said such a case would be unlikely today, given the greater understanding of gender identity disorder.

    “Now, if a person could show that because he or she believed themselves to be a member of the opposite sex they had an irresistible impulse to cross-dress, they would in all likelihood qualify for a medical discharge,” he said.

    Several attorneys who work with transgender legal issues said they were not aware of a gender identity disorder defense being raised in a civilian court, and King said it’s easy to see why not, noting that such a diagnosis “doesn’t prevent you from knowing right from wrong.” The disorder is most often raised in criminal proceedings as part of an overall insanity defense, or by expert witnesses arguing that a defendant is so mentally damaged that he or she should be committed, he said.

    And several lawyers who work with transgender clients indicated they were not happy with the direction that the Manning proceedings have taken.

    “We don’t think that being transgender, if he in fact is, has anything to do with him breaking the law,” said Kylar Broadus, an attorney with the Transgender Law and Policy Institute. “Obviously the charges are serious and we don’t want the trial to be sensationalized or detracted from by him being transgender.”

    “Our opinion is there is no correlation between anything he has done and gender identity disorder,” agreed Dru Levasseur, a transgender rights attorney with Lambda Legal.

    “This plays into stereotypes that are not true,” he continued. “There are a lot of people with gender identity disorder fighting for their lives to be respected and understood as human beings who need equal access to the law. This type of scenario just confuses the situation.”

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