* Move could save Rich tens of millions of dollars in long
* New York penthouse up for sale for $65 million
* Wrote songs for Aretha Franklin, Jessica Simpson
By Lynnley Browning
July 9 Denise Rich, the wealthy socialite and
former wife of pardoned billionaire trader Marc Rich, has given
up her U.S. citizenship - and, with it, much of her U.S. tax
Rich, 68, a Grammy-nominated songwriter and glossy figure in
Democratic and European royalty circles, renounced her American
passport in November, according to her lawyer.
Her maiden name, Denise Eisenberg, appeared in the Federal
Register on April 30 in a quarterly list of Americans who
renounced their U.S. citizenship and permanent residents who
handed in their green cards. ()
By dumping her U.S. passport, Rich likely will save tens of
millions of dollars or more in U.S. taxes over the long haul,
tax lawyers say.
Rich, who wrote songs recorded by Aretha Franklin, Mary J.
Blige and Jessica Simpson, is the latest bold-faced name to join
a wave of wealthy people renouncing their American citizenship.
Facebook co-founder Eduardo Saverin gave up his U.S. passport to
become a citizen of Singapore, an offshore tax haven, before the
company's initial public offering in May.
Nearly 1,800 citizens and permanent residents, a record
since data was first compiled in 1998, expatriated last year,
according to government figures.
Rich, who was born in Worcester, Massachusetts, has Austrian
citizenship through her deceased father, said Michael Heidt, a
lawyer in Hollywood, Florida, who represented her in a recent
He said Rich had dumped her U.S. passport "so that she can
be closer to her family and to Peter Cervinka, her long-time
partner." Rich's two daughters live in London; Cervinka, a
wealthy property developer, is an Austrian national. Rich plans
to make London her main residence and does not intend to acquire
other passports, Heidt said.
MARC RICH's PARDON
Rich's ex-husband, commodities trader Marc Rich, fled the
United States in 1983 when indicted on charges of tax evasion,
fraud, racketeering and illegal trading of oil with Iran. They
divorced in 1996.
Marc Rich received a presidential pardon in 2001 on
President Bill Clinton's last day in office. Federal prosecutors
and Congress investigated the pardon, and in 2002 a House of
Representatives committee concluded Denise Rich had swayed the
action through donations to the Clinton library and campaign.
Dubbed "Lady Gatsby" by Yachting magazine, Rich owns
multiple properties, including a mansion in Aspen, Colorado. She
is a frequent habitue of Cannes, Monte Carlo and St. Tropez with
celebrities and singers aboard her 157-foot yacht, Lady Joy.
Rich will escape future U.S. taxes but possibly not all
current ones. In 2008, Congress imposed an expatriation tax on
persons with a net worth of more than $2 million who dump their
U.S. citizenship or permanent residency. Under the law, those
people owe an "exit tax" on their worldwide property, computed
at a fair market value the day before they leave. But tax
lawyers say the tax can be reduced or avoided by structuring
asset holdings through foreign annuities.
While Austria, like the United States, generally taxes its
citizens on their worldwide income, it has generous tax breaks
for citizens who spend half the year abroad.
In January, Rich put her 5th Avenue penthouse in New York on
the market for $65 million, according to the listing agent, The
Corcoran Group. New York property records show Rich acquired a
100 percent stake in the apartment, described by Corcoran as
"the epitome of luxury and grandeur," for $200,000 in 2006.
Bonnie Evans, the Corcoran broker for the property, declined to
COOK ISLANDS TRUST
The recent lawsuit against Rich was filed on behalf of Lee
Goldberg, the former protector of a Cook Islands trust of which
Rich is a beneficiary, in February. The case was dismissed in
April, court records show.
The Cook Islands, a South Pacific tax haven, offers
Swiss-style secrecy for wealthy investors.
The lawsuit accused Rich and Richard Kilstock, a British
real estate entrepreneur who is married to Rich's daughter
Daniella, of "transferring, moving or secreting trust assets, in
violation of the trust's guidelines and without the knowledge or
permission of Goldberg."
Rich and Kilstock denied the charges and accused Goldberg of
altering trust documents, court filings show.
Both Goldberg and his attorney, Donald Thomas, declined to
discuss the case. Rich recently dismissed Goldberg, one of her
long-time lawyers, as protector of the trust.
Heidt, who also represents Kilstock in the case, declined to
discuss the lawsuit. Kilstock did not return calls requesting