Divorce & Child Support
How can one efficiently proceed when there are hidden assets in a divorce or child support case, like in Skiff-Murray v. Murray, 2005 slip op. 02911(N.Y. App. Div. 3d Dept, June 22, 2005); 17 A.D.3d 807; 793 N.Y.S.2d 243? Before leaving New York, the defendant in Skiff-Murray had fraudulently transferred his business and former marital residence to his newly created Nevada corporation which was probably a shell company. Violating a restraining order, the defendant next transferred this residence from his Nevada corporation to his aunt and uncle, who then mortgaged it to a third party. According to the court in Skiff-Murray, the defendant had "...made it impossible for plaintiff to enforce her judgments for child support arrears or obtain the maintenance, distribution of marital property and counsel fees awarded in the judgment of divorce."
Wouldn't a fraud investigation, asset search, or enforcement proceeding likely fail against the above kind of defendant or someone who for example, would go to the extreme of parking money in a Swiss bank account or even in a money laundering circuit? How can one collect from a non-custodial parent or divorcing spouse who dissipates assets or hides income and then portrays him / herself as penniless--when nothing could be further from the truth? With the right legal strategy however, one can often prevail in these kinds of situations. This is true even when assets are hidden in some of the tax havens like Switzerland or the Netherlands--where under Swiss or Dutch law respectively, a spouse can bring legal proceedings to recover fraudulently concealed marital property.
Not every situation is as complicated as locating hidden assets in an offshore tax haven like Switzerland. Many times a local court can be used effectively to conduct an asset search or enforcement proceeding. Because courts can impute earnings when determining issues like child support and maintenance, they can even be effective against a divorcing spouse who hides income. Such was the case of Beth M. v. Joseph M., 2006 slip op. 51490 (N.Y. Sup. Ct. Nassau, July 25, 2006), where the court imputed $100,000 in earnings per year to a husband because of his: questionable claim of limited future earning capacity; self-created unemployment; and missing financial records. In Beth M., the divorcing husband incredibly testified that he could not recall filing tax returns from 1997 through 2001; did not know how much money he earned; and never kept records.
Courts can also be effective if, (for instance during a divorce or child support case), a family member or other person is used as a nominee to hide assets. In such a situation one might file a fraud lawsuit against the family member or other person who has hidden the assets. This occurred in Bloomfield v. Bloomfield, 721 N.Y.S. 2d 15 (1st Dept 2001), where a divorcing wife brought a lawsuit against her husband and brother-in-law after learning that they had fraudulently transferred marital property away from her. One might even add a party hiding marital property, (to a pending divorce lawsuit), as mentioned by Schmidt v. Schmidt, 99 A.D.2d 775 (2d Dep't 1984) or Solomon v. Solomon, 136 A.D. 2d 697 (2d Dept 1988).
Copyright 2007 Fred L. Abrams
Wouldn't a fraud investigation, asset search, or enforcement proceeding likely fail against the above kind of defendant or someone who for example, would go to the extreme of parking money in a Swiss bank account or even in a money laundering circuit? How can one collect from a non-custodial parent or divorcing spouse who dissipates assets or hides income and then portrays him / herself as penniless--when nothing could be further from the truth? With the right legal strategy however, one can often prevail in these kinds of situations. This is true even when assets are hidden in some of the tax havens like Switzerland or the Netherlands--where under Swiss or Dutch law respectively, a spouse can bring legal proceedings to recover fraudulently concealed marital property.
Not every situation is as complicated as locating hidden assets in an offshore tax haven like Switzerland. Many times a local court can be used effectively to conduct an asset search or enforcement proceeding. Because courts can impute earnings when determining issues like child support and maintenance, they can even be effective against a divorcing spouse who hides income. Such was the case of Beth M. v. Joseph M., 2006 slip op. 51490 (N.Y. Sup. Ct. Nassau, July 25, 2006), where the court imputed $100,000 in earnings per year to a husband because of his: questionable claim of limited future earning capacity; self-created unemployment; and missing financial records. In Beth M., the divorcing husband incredibly testified that he could not recall filing tax returns from 1997 through 2001; did not know how much money he earned; and never kept records.
Courts can also be effective if, (for instance during a divorce or child support case), a family member or other person is used as a nominee to hide assets. In such a situation one might file a fraud lawsuit against the family member or other person who has hidden the assets. This occurred in Bloomfield v. Bloomfield, 721 N.Y.S. 2d 15 (1st Dept 2001), where a divorcing wife brought a lawsuit against her husband and brother-in-law after learning that they had fraudulently transferred marital property away from her. One might even add a party hiding marital property, (to a pending divorce lawsuit), as mentioned by Schmidt v. Schmidt, 99 A.D.2d 775 (2d Dep't 1984) or Solomon v. Solomon, 136 A.D. 2d 697 (2d Dept 1988).
Copyright 2007 Fred L. Abrams
