Sometimes information from passports, phone records, or the documents found in one’s home can be a red flag that a divorcing spouse has hidden assets in an offshore bank. One divorcing wife recently explained to me that her absconding husband had left a box full of Internet research about offshore banks in their basement. These documents could have been passed on as a tip to foreign investigators to help the wife narrow her asset search. They might possibly have also been used as impeachment material at the divorcing husband’s upcoming deposition about his assets / net worth.
Documents relating to offshore bank accounts are also routinely used by federal agents along with other facts to apply for search / arrest warrants in white-collar crime cases. In the bribery and money laundering case against Major John Cockerham for example, a Special Agent’s affidavit alleged at pages 11-12 ¶ 25, that the following were seized from Major Cockerham’s residence: Internet research about opening offshore bank accounts; a document entitled “Bulletproof Asset Protection”; a handwritten note mentioning two books about hiding assets offshore; account opening documents from an offshore bank; etc.
If a New York divorcing spouse similarly hides marital assets in offshore bank accounts, then he / she may be penalized at the time of an equitable distribution award under N.Y. DRL § 236 (B) (5) (d) (11) for “wasteful dissipation”. In Maharam v. Maharam, 245 AD2d 94, 95 (1997) for example, the Court increased a divorcing wife’s equitable distribution award from 55% to 65% because her husband had among other things, secreted assets at an offshore bank. As a review of N.Y. DRL § 236 (B) (5) (d) however demonstrates, “wasteful dissipation” is one of many factors the Court considers when awarding equitable distribution in a New York divorce-
In determining an equitable disposition of property under paragraph c, the court shall consider:
(1) the income and property of each party at the time of marriage, and at the time of the commencement of the action;
(2) the duration of the marriage and the age and health of both parties;
(3) the need of a custodial parent to occupy or own the marital residence and to use or own its household effects;
(4) the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution;
(5) any award of maintenance under subdivision six of this part;
(6) any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;
(7) the liquid or non-liquid character of all marital property;
(8) the probable future financial circumstances of each party;
(9) the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;
(10) the tax consequences to each party;
(11) the wasteful dissipation of assets by either spouse;
(12) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
(13) any other factor which the court shall expressly find to be just and proper.
Copyright 2007 Fred L. Abrams