Written by attorney Peter Christopher Lomtevas

Financial Disclosure Fraud in Divorce Court

In a divorce involving a couple who have been apart a while (four years) but married for a long while (20 years), financial processing of their divorce case is essential to a fair and even split of assets. In this way, both spouses will survive their separation. However, it is in the interest of the dominant spouse (the breadwinner) to inhibit the production of financial information to the servient spouse (the stay at home wife). The less dollars exposed to the judge's knife, the more money the dominant spouse can keep for himself. Here, the financial disclosure fraud is designed to make it appear as if the dominant spouse (DS) is trying to provide, but in reality is creating a smoke screen to fool everybody – especially an inept court attorney and the judge. Here is how it is done. Financial issues for the typical divorce court are beyond the ken of the average judge and his court attorney. This area of divorce practice relies heavily on voluntary disclosure of a spouse's assets. If information is not disclosed, the servient spouse (SS) will suffer financially. The law allows the compelling of discovery by order of the court, but such orders are arbitrarily issued and rarely enforced. Now commences financial production of information by the dominant spouse's attorney (DSA). The DSA will begin by issuing releases executed by the DS. Family Court releases will be for the wrong county or will not include all spellings of the DS's name. Chase Bank will omit account numbers or will be a release for the wrong bank. There may be accounts in Citibank, Wachovia or Capitol One, but these will not be disclosed. James B. East, P.C. accountant will produce basic tax returns, nothing else. Oppenheimer & Co. Inc. will include a release for major investments, but this will be only one investment vehicle among many and there is no way to trace where a bundle of money came from or where it is going to. Royal Bakery Services is the purported "employer" but repeated calls for information go unanswered. This is likely a business owned by the DS and his employees will refuse to answer. Barry Schnapps, Esq. will be a false name given for attorney information. Credit card account numbers will be provided for closed credit accounts. The intent here is to induce a run around for information which leads nowhere. A home purchased from a Joan D'Agostina will be searchable on the local housing website, but details of the transaction will not be revealed. There will be no leases produced and no rent payment logs disclosed. Any Section 8 participation will be covered up and cash payments will not be recorded. Deeds will not be complete when produced. Sickle Apartments Corporation credit account with the DS's address will not be explained. Pay stubs will be produced that will have gaps in payment, will have pay entries that have no explanation and will have gaps in the frequency of payment. 1/8/2009 53 hours worked $1,636.25 gross pay 1/10/2009 45 hours for $1.306.25 gross pay 3/6/2009 worked 40.18 hours $308.07 gross pay 4/9/2009 53 hours 1,636.25 gross pay 4/23/2009 45 hours $1,306.25 gross pay 4/30/2009 59 hours $1,883.75 Bank account statements will be provided that will not include the deposits of the above listed paychecks. No matches of pay earned and checks deposited will be possible because of the hidden accounts and business run in other states. Capitol One account 987654321 1/18/2008 deposits $1,239.19 Capitol One account 987654321 2/18/2008 deposits $1,044.53 Capitol One account 987654321 3/17/2008 deposits $5,151.46 Capitol One account 987654321 4/14/2008 deposits $3,777.25 Capitol One account 987654321 5/15/2008 deposits $3,775.97 Capitol One account 987654321 6/16/2008 deposits $7,853.83 Capitol One account 987654321 7/16/2008 deposits $2,055.49 Capitol One account 987654321 8/15/2008 deposits $2,137.73 Capitol One account 987654321 9/16/2008 deposits $2,424.73 Capitol One account 987654321 10/16/2008 deposits $3,151.31 Capitol One account 987654321 11/18/2008 deposits $3,573.07 Capitol One account 987654321 12/15/2008 deposits $2,657.62 Account statements will have huge balances in years prior to litigation but will shrink to bankruptcy as the case continues. Car registrations and insurance policies will not be disclosed. Auto finance papers will not be produced. Leases will not be produced. Deeds will be produced indicating long sold property. Corporate bylaws and certificates of incorporation will have the signature page omitted. Blank stock certificates will be produced. The DSA will say he closed down a business long ago. Payment of attorney fees will be for outdated retainer agreements and will not include the checks actually sent to the attorney. Financial disclosure documents will not be disclosed under their own cover. Instead, the DSA will lump them into affirmations "in opposition", responsive letters with portions of these documents attached and during office visits. This is made to appear as if the DSA does not have the documents and he is trying his best to locate them and provide them. Passports will not be produced. Order of Support for other children will not produced. Instead, statements of child support paid will be produced. If the DS is a truck driver, he will not disclose his commercial driver's license. Income tax returns will first be produced as income tax "statements" absent any schedules. Then, upon further prodding, tax returns from various years will trickle in. The spacing of the disclosure is important to take note of. 1. Releases will come first, followed by miscellany: a medical card, a money order, lawyer's letters, individual documents like licenses, court papers and a mortgage statement. 2. In a future production, earning statements will begin to appear as will checking account statements. However, earning statements will be for one year while bank statements will be for another year. In no future production will these ever intersect. 3. In another future production, stock certificates, deeds, company statements, investment vehicles other than stock and operating agreements will begin to appear. No money will intersect with a bank account statement from any of these sources of money. 4. In another future production, more bank statements and earning statements appear. None will intersect with any prior corresponding document. 5. In yet another future production, a second bank may appear with more statements that have missing dates and have no beginning and no end. 6. In yet another future production, multi-year income tax statements appear as well as W-2's. This spacing is done in anticipation of settlement so as to produce the minimum amount of information and obtain the lowest payments by the DSA for child support and maintenance. So, if the court coerces settlements, the DSA has produced information that cannot be analyzed and calculated at all. Moving the court for enforcement or a striking of the pleadings will lead nowhere. Today’s divorce courts wish to zealously end marriages even if the marriage was a sham. All the DSA needs to say is that he produced all the DS has and that the requesting attorney is on a “fishing expedition". The DSA has beat the system. He has made a substantial effort to comply with discovery demands and is pleased that no further enforcement is likely. The SS loses all the money that is not disclosed whether this is a community property state or an equitable distribution state. In a corrupt court scenario, the DSA will always get monetary sanctions for failures of disclosure by the SS, but the court will never enforce production by the DS. This means that the rich husband who hires the correct attorney will be free from the obligation of financial disclosure while his poor wife will be sanctioned for failing to disclose financial documentation that she may not even have. The court may go so far as to allow a deposition of the poor wife to establish how and why she is refusing to disclose financial information – that she destroyed it, or she deliberately jumbled it up to make it incomprehensible. This trick works wonders in a community property jurisdiction because the rich husband will have 100% of his finances free from distribution by the court while the wife’s portion of whatever she has will be split in half and paid to the husband. In an equitable distribution state, the DSA needs only to file a statement of proposed disposition stating that here is no marital property at all. While this article aims to expose the unwary to the tricks played in this nation’s divorce courts as to financial disclosure, it is in now way complete. A task force of thousands of multi-jurisdictional lawyers would have to sit in on cases from coast to coast to extract each and every trick pulled in order to fully cover this topic – and eventually expose the biggest abusers of the law.

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