Rich's $5 Million Legal Fund Seized

W A S H I N G T O N, May 1 -- New York state has confiscated a $5 million bank account that pardoned billionaire Marc Rich had maintained to pay his high-priced legal team, ABCNEWS has learned.

Sources familiar with the seizure say New York's Department of Taxation and Finance took the money from a bank in the state as part of the agency's move to settle a $137.8 million tax lien.

Rich had been one of the most-wanted white-collar fugitives in the United States, sought on dozens of counts of wire fraud, racketeering and income tax evasion when President Clinton pardoned him just before leaving office in January.

Clinton's move sparked an uproar that culminated in a congressional investigation looking into whether Rich's friends and family effectively bought the pardon. U.S. Attorney Mary Jo White is currently leading a criminal probe in New York.

In early March, New York Tax Commissioner Arthur Roth announced the filing of a tax warrant against Rich, charging the billionaire owed $26.9 million in state and New York City personal income taxes — plus $110.9 million in penalties and interest.

A state official said it was an effort to recoup income from Rich's transfer of profits from one of his New York City-based firms to an overseas company during the early '80s.

Rich has been living in Switzerland. Several of his lawyers could not be reached for comment late today on their payment arrangements. One attorney, Kathleen Behan of Washington's Arnold and Porter firm, refused to comment.