Episode 121 - The Crazy Ways People Hide Money in Divorces
Truth is often stranger than fiction, and, when it comes to trying to hide money from their spouses, people can get quite creative. Fortunately, most of the time, people going through a divorce report things honestly. On occasion, however, some are motivated to try and hide money from their spouse. Those who do are typically caught, and, in some cases, get in trouble with the Court. With new forms of currency like crypto-currency, the schemes can get complicated to track down. In this show, Leh and Todd break down the crazy ways they have seen people try to hide money in divorce and support modification cases.
Leh Meriwether: Welcome everyone, I'm Leh Meriwether, and with me is Todd Orston. Todd and I are partners at the law firm of Meriwether and Tharp, and you're listening to the Meriwether and Tharp show on News 95-5 WSB.
Todd Orston: There you go.
Leh Meriwether: I know.
Todd Orston: It's a new way. You almost faltered there. You almost tripped up. I was hoping you would, but whatever.
Leh Meriwether: Hey, here you learn about divorce, family law, tips on how to save your marriage if it's in the middle of a crisis. From time to time, even tips on how to take your marriage to the next level. If you want to read more about us, you can always check us out online, Atlantadivorceteam.com.
Leh Meriwether: Todd, I'm really excited today.
Todd Orston: And why, Leh? Why are you so excited today?
Leh Meriwether: Because we're on WSB, now!
Todd Orston: Alright, that's kind of exciting.
Leh Meriwether: Yeah, it is kind of exciting.
Todd Orston: Right. I'm not as excited as you are, but I'm very excited.
Leh Meriwether: Well, I'm also excited about what we're going to talk about today.
Todd Orston: And what would that be?
Leh Meriwether: Well, you're the one who put the show together. No, I'm just kidding. No, this is, today's actually a fun show. It's the crazy ways that we've seen people try to hide money in divorces. Now I'll say, most of the time, when we're doing divorces, you've got two honest people. They're just struggling and having a difficult time with the breakup of their marriage, but occasionally, you'll see a case where someone's trying to hide money.
Todd Orston: And we've seen just about it all. People will do things that are slightly underhanded, and people have great imaginations. And some of the things that we've seen them try are pretty impressive sometimes, and it takes a great imagination to come up with some of these things.
Leh Meriwether: So we've, and you know what, I will say as lawyers, we do enjoy finding it, when you catch someone. You're like, "Aha! I've finally got you."
Todd Orston: Yeah, and jokes aside, sometimes it's not possible. Our job obviously is to make sure that when we're dealing with things relating to asset division and all of that, we need to make sure that we identify everything that is in existence for those parties. There are times when people have just squirreled money away. Money has disappeared, and part of this show is a cautionary statement, that you do have to constantly be aware of where your assets are. And if they are assets that are not trackable, meaning bank accounts, something where there is a statement that will show money in, money out, you are potentially in a very difficult position, because if that money, or if those assets, diamonds, jewelry-
Leh Meriwether: Gold bars.
Todd Orston: Gold bars we've seen. Gold coins, antique coins, if they disappear, often times it's very difficult to identify that they existed, and to value them. So you have to be careful.
Todd Orston: But we're going to talk about that, but we're also going to talk about some interesting and sometimes amazing ways people have tried to hide the assets in order to gain the system.
Leh Meriwether: Yeah. So we've got a lot, we've got a big list, so we better get started.
Todd Orston: So stop talking, and let's go.
Leh Meriwether: You're the one that keeps talking. Alright, so number one, this isn't the most frequent, there's no order to this, I'm just ... The first one is PayPal and similar type companies. We've had cases where you'll look on a statement and you'll see all these PayPal charges. "Wow, someone's buying a lot of stuff using PayPal."
Leh Meriwether: And it turns out, they're not actually buying stuff, but they're putting money into the PayPal account. And there's other companies out there like PayPal, that's just the one we happen to see most recently, but they're putting money into their PayPal account, and there's no record of it. And so-
Todd Orston: Well, there is. There is a record, but sometimes it's hard to identify. Sometimes ... Again, if they're transferring money from a bank account, let's say. If over a period of time, it's a ten dollar transfer here, a 20 dollar transfer there, a 50 dollar transfer. Then it may sort of fall under the radar, if you will. So you have to be very careful, and that's again, one of the things that we're going to do. We're going to look to see, "Okay. Do any of these things stand out?"
Todd Orston: And while a 20 dollar transfer to PayPal may not represent anything other than a purchase, if there are ten a month, or 20 a month, and you're looking, and it's going on for six months, eight months, a year, more, then you do have to start questioning. "Okay, does your spouse really like to shop that much? Do you just have antique ninja swords and things just throughout the house?"
Todd Orston: But if there's not a lot a lot of items coming into the house, then you have to start thinking, "Maybe what they're doing is putting value into the PayPal account, that they at some point plan to take out." And you can't make a claim to it.
Leh Meriwether: Yeah. So another one that we see that's actually relatively new, is cryptocurrencies. Now, a lot of times, PayPal, you can track that really well because there is a bank account the money's going out of, and you can subpoena information from PayPal to find out if there's any records there, and you can also ask in discovery for their PayPal account information. That's how sometimes they discover there's cash sitting there in a PayPal account.
Todd Orston: Yeah. But determining the value of these BitCoin or other cryptocurrency accounts, I mean ... My understanding, the way that it works is that you end up having the key and having data, let's say, on your computer that allows you to access the so called bank if you will. Where the value is stored. That means that it's not like a bank, where you're getting regular monthly statements. And that means that as a practitioner, what we need to do is we need to back in.
Todd Orston: And a lot of these things work that way. You need to back into the problem. You can't just say, "Give me your bank account, or give me your cryptocurrency account." And see what the value is, and therefore determine what's divisible. You may have to look to PayPal accounts, or other kinds of payment, online payment plans. Or, not plans, but tools. And bank accounts where money might be transferred out. And you may not automatically understand why the money's being transferred, but then some research will then tell you, oh yeah, that's a purchase of some cryptocurrency.
Leh Meriwether: Right. And with cryptocurrencies, it's all online. It's virtual money. It is not regulated as far as I know. Now as soon as we do this show there could be a new law out, that comes out trying to regulate it, but where is the central location? Unlike a bank, or like a Bank of America, or SunTrust, you can go to that bank and subpoena bank accounts. A lot of these companies, because there's more than just BitCoin out there, it's all virtual. There's not physical location to go get documents from, and they maintain these ... They are purchased via an exchange, and one of the exchanges is coinbase.com.
Leh Meriwether: So it's all online, and the courts don't ... If there's no physical person to subpoena, you can't get the records. So it can be a situation where it's easy to hide money using cryptocurrencies.
Todd Orston: You know, a piece of advice that I'm going to be giving throughout the show is you can't take that position of, "Well, I wasn't in charge of the finances. My spouse did this, my spouse took care of that."
Todd Orston: You have to stay aware. You get into trouble, potentially, by not being aware. Not routinely looking at the bank records. And that's not to snoop on your spouse, that's just so that you are educated about your own finances. Because too many times, we see people come to us, and they do take that position. And it's understandable, right? "My husband paid all of the bills. My wife took care of all of the expenses." Whatever.
Todd Orston: But then they come to us, and they're like, "I don't know what's there. I don't know what should be there, I don't know if anything's missing."
Todd Orston: And it makes the job much, much more difficult to identify what should be there and what's missing.
Leh Meriwether: Now, fortunately, we have forensic accountants that often do ... That's how we've learned about a lot of these, because if something doesn't look right, something's not adding up, we get a forensic accountant involved, and they're able to trace the funds a lot of times.
Todd Orston: A lot of times, a lot of times. Sometimes, again, their imaginations are good enough that it's hidden, and it's gone.
Leh Meriwether: So another interesting way is the IRS. Now you would say, "What? The IRS to hide money?"
Leh Meriwether: Yes. Because some people-
Todd Orston: They have the department. The hide money from your spouse department of the IRS. Right.
Leh Meriwether: Did you know that?
Todd Orston: No, that is ... Okay, IRS, I'm sorry.
Leh Meriwether: You're going to be audited now. No. So what we've seen is with ... When somebody has a business, that's when you typically see it. So they, as an employee, you have your taxes taken out of your paycheck automatically, but if you're a business owner, not so much. You have to voluntarily pay payments along the way. It could be quarterly, it could be monthly.
Leh Meriwether: So there have been cases where the business owner overpay their ... estimated payments. They overpaid them, so planning to get a divorce at a certain point in time, and then filing extensions for their tax returns again, and again, and again. Then they get divorced, and then when they finally file their taxes, they get 50,000 dollars back. Because it's ... There's been situations reported as high as 50 to 100,000 dollars in cash that was overpaid to the IRS. And that's, I mean that's fraud. [inaudible 00:10:16].
Leh Meriwether: If the court finds out that someone has been intentionally hiding money, it wasn't disclosed in the divorce-
Todd Orston: You run the risk of losing it all. If you're the one that did that, the court could penalize you by taking it all.
Leh Meriwether: And there was a case where, out in California, years ago, where I believe it was the wife, did not disclose that she had won the lottery. And when it was ... Won it during the course of the marriage, but had hidden it from the husband, and when the judge found out about it, the judge gave the husband the entire lottery winnings as a punishment.
Leh Meriwether: Hey, and up next, we're going to get into more crazy ways that people try to hide money in a divorce.
Leh Meriwether: Welcome everyone! I'm Leh Mariwether, with me is Todd Orston. Todd and I are partners at the law firm of Meriwether and Tharp, and you're listening to the Meriwether and Tharp Show on WSB, our new station.
Todd Orston: That's the roar of the crowd.
Leh Meriwether: We need sound effects.
Todd Orston: No we don't. I would end up playing with them more than us talking. So.
Leh Meriwether: Oh, that would be ... Yes, that would be bad. Never mind. Alright, hey, if you want to read more about us, you can always check us out online, Atlantadivorceteam.com. Well, today we're talking about the crazy ways that people have tried to hide money in divorces. And not just divorces, but modification cases. Like the next, we've talked about a few. Cryptocurrencies, PayPal, IRS even, using that to hide it. You had talked about business owners hiding it, but there have been situations where employees started to overpay, they changed their deductions and overpaid the IRS because if you are divorced by the end of the year, before the end of the year, you'll be filing separate. You're not going to be filing married.
Todd Orston: Well, and you can file separate, married filing separate. But a lot of times, most of the time, the parties, there're enough benefits that they end up filing jointly unless they are married by the end of the year, like you were saying. So let me say one thing before we go further.
Todd Orston: I want to make sure that everyone understands, we are not coaching people on how to hide assets.
Leh Meriwether: This is true.
Todd Orston: At the end of the day, obviously, right is right, wrong is wrong. And when you engage in that kind of behavior, what we haven't talked about, but I think we do for a moment, is a lot of those people, you touched on it, hide assets, and they end up getting in a lot of trouble. They end up getting sanctioned by the court, they end up losing, potentially, the asset, like the lottery winnings that you were referring to. And on top of that, even after a case is finalized, if it turns out that you hid some significant asset, it is possible that the other party can then try to reopen the case due to fraud, and once again, go after the asset in question.
Todd Orston: And if there was any chance of a judge awarding 100% of that to the non-lying spouse, that's a situation where I would say it's close to 100%.
Leh Meriwether: Yeah.
Todd Orston: I think a judge at that point would be furious. So really, I want ... And I know everyone is, but take this as a cautionary statement that you need to disclose the information. You need to make sure that anything that's out there is out there, subject to division, and available for at least evaluation by the parties. Because if you don't, if you play those games, the consequences can be pretty dire financially.
Leh Meriwether: Yeah. And most divorce, good divorce lawyers are on the lookout.
Todd Orston: That's right.
Leh Meriwether: For those kind of things. So the next one, getting paid through credit cards. Now, this is actually ... Some people do this. The IRS comes down on people like this, but we had a case involving a modification of child support, and in the case, the opposing party had ... he was claiming to only make 24,000 dollars a year. 2,000 dollars a month. And indeed, that's what his paycheck stubs showed.
Leh Meriwether: But his lifestyle that he was living was significantly more than 24,000 dollars a year. How is that possible? Well, what was happening was that he was running up his credit cards, and then his offshore employer was making payments on them, and then not reporting that as income here in the United States, which would get him in big trouble with the IRS.
Leh Meriwether: Now, we didn't report any of that, because we didn't want him to suddenly go to jail because then our client suddenly wouldn't get child support, but needless to say, the child support was adjusted to reflect what he was actually getting paid.
Todd Orston: Well, because it was reducing living expenses. And child support analysis looks at that, is going to look at what is your actual income. And people have sometimes, I know it's not a show on child support, get a little confused, because they say, "Well, I'm only earning X."
Todd Orston: But then when you start digging in and looking at benefits of employment, many of those benefits, even though there might be a tax benefit, they count in terms of determining your income for purposes of calculating child support. So that's a similar example.
Leh Meriwether: So another way that we see people hide money is with antiques. Art work, hobby equipment. And sometimes, it's intentional, sometimes it honestly gets overlooked in a case, or undervalued. You might look at ... Some things go down in value very quickly, but there are pieces of artwork that don't. There are certain antiques that don't. Sometimes there's even antique wood working tools that could be valuable.
Todd Orston: Yeah, yeah, right. And your wife, we're sending a copy of this to your wife, because I know you have quite a few of those. You need to be ... You need to just be, again, aware. Because these types of things over time ... God forbid I have to go through this with my wife, but the point is, if my wife overtime bought a piece of art here, or something there, I may not even notice. I mean, obviously if it's a big ticket item, I would notice, but if I'm not looking, I wouldn't even notice. And then when the time comes two years, three years, four years later, and all of a sudden there was a divorce, I may not know about a picture or something.
Todd Orston: Especially if they're things, let's say, in her office.
Leh Meriwether: Right. Oh, at work.
Todd Orston: At work. I wouldn't even think twice about, "Well, I need stuff from your office."
Todd Orston: Well, the office could have 150,000 dollars worth of art. I know it doesn't for my wife, but the point is, it could. So you have to be aware of all those pieces of art. The other thing I will say about art and antiques. It's good for two reasons. One reason, you don't want to think about, the other reason, you have to think about, and it's not bad to think about.
Todd Orston: Take pictures. Things like if you have gold, if you have any precious metals, jewelry, gems, things like that, art on the walls You have to think about it in terms of, it's great for insurance purposes. God forbid something happens, you have pictures. You don't want to think of it in terms of, one day my happy marriage might fail, and I might have to go through a divorce, and I want pictures of the assets. But you know what, it's helpful there too. And we've had situations where antiques go missing.
Todd Orston: Coin collections, jewelry goes missing, a safe is just ... I don't know how it's now empty. But things go missing, and if you don't have an ability to quantify, then unfortunately, if it's gone, it's gone. Because a court will look at you and say, "If you can't prove to me what's missing specifically and what the value is, I can't help you."
Todd Orston: But if you have pictures that show everything that you're talking about, and Oop, I don't know where it went, the court can then at least go, "Okay. I see it, I know it existed, I can determine a value, I'm going to award that amount to the other spouse."
Todd Orston: So it's good to take pictures.
Leh Meriwether: Yeah. So another situation where we see people hiding money is almost a collusion. Let's say you have an employee who's really good friends with the employer. It could be a small business. And they go to the employer and say, "hey, I know I should get commissions on these big transactions I just closed, but can we hold off on those? Maybe you pay those to me next year."
Todd Orston: Deferred comp. We deal with this all the time. And people will ... THey'll say, "hey, you're going to get a salary bump."
Todd Orston: "Eh, let's wait."
Todd Orston: And they hold off on increases in salary, and sometimes they're significant. Promotions, like you said, bonuses, commissions, things like that, that they just work with their employer to sort of push off until some future date. That's again, something that we would be looking at, but you as the spouse need to be aware. If you have a good understanding of how your spouse earns money, you'll probably realize if there's a big dip in ... Or even small dips, because over time, suddenly it's like, I'm used to making 6,000 dollars a month, or 10,000, whatever, and it drops by 10%, or 20%. Well, if it's just an anomaly for one month, so be it. If it starts happening month, after month, after month, after month, you need to start digging in a little deeper to see what's happening and why that income is lost.
Leh Meriwether: Right. And what's really interesting is the people that think they can get away with it. But what often happens, like in one case, the husband was talking about this big deal he was working on, this big deal he was working on. Well, all of a sudden, he quit talking about it. So during the course of the case, "Well, what happened to this big deal?"
Leh Meriwether: "Ah ..."
Todd Orston: No big deal.
Leh Meriwether: No big deal, yeah. So what you do is you subpoena the records, his employee records, and you find out that you have to go to the employer and find out that the transaction did go through. So under his employment agreement, he needs to get paid. And he may not have been paid, but that is something that the wife in that case could seek an equitable interest in, that big bonus that was coming in.
Leh Meriwether: Not to mention, it would be included in calculating child support. And you talk about really upsetting a judge, when you try to get out of paying your child support, that can create a situation where a judge is very frustrated with you. And that's probably interesting.
Todd Orston: Not a good position to be in.
Leh Meriwether: No. Hey, and up next, we're going to talk about how someone basically caught someone from trying to hide a million dollars in cash. Coming up right after news, weather, and traffic, on WSB.
Leh Meriwether: Welcome everyone. I'm Leh Meriwether and with me Todd Orston. Todd and I are partner at the law firm of Mariwether and Tharp, and you're listening to the Meriwether and Tharp Show on the new station we're on.
Todd Orston: I was about to say I don't think WSB is new. We are new to WSB.
Leh Meriwether: We are new to WSB.
Todd Orston: Alright.
Leh Meriwether: And if you want to read more about us, you can always check us out online at Atlantadivorceteam.com. Well, today, we're talking about the crazy ways that people hide money in divorces, and other types of family law cases. What's crazy is how long it's taking us to get through, because there's a whole ... We've got a huge list. At the pace you're going-
Todd Orston: No, I blame you. It is absolutely your fault.
Leh Meriwether: We are not going to get done.
Leh Meriwether: Alright, so where I left off was we had ... We've seen cases, or we've seen situations where people have tried to literally hide cash in safes. And going back to your point, there was a case where the wife opened up the safe, took photographs of the money, laid the money-
Todd Orston: A million dollars.
Leh Meriwether: A million dollars. She laid it out on the bed and took pictures of the stacks of hundreds, and it basically added up to a million dollars. Needless to say, that was a fun deposition. But it came out, and the case settled.
Todd Orston: But because of those pictures, they were able to ... You're able to identify that it existed, and all the ... Without those pictures, let me ask the question, if that picture did not exist, do you think you would have been as successful in trying to collect ... And get your client a part of that million dollars?
Leh Meriwether: I don't think so. Because shortly after the divorce was filed, the safe was empty.
Todd Orston: So I'm glad that person took pictures.
Leh Meriwether: Yes.
Todd Orston: It tells a million words. Sorry, that was horrible, horrible.
Leh Meriwether: Alright. So another crazy way we've seen people try to hide money is debt repayment for a phony debt to a friend or family member, with the prearrangement that that friend or family member will reimburse them once the divorce is over with. And we've seen this actually in bankruptcy cases where someone will say, "Oh, I owe someone this money, and here's 30,000 dollars I owe you."
Leh Meriwether: And then they file for bankruptcy, and you get a trustee involved, and where we get it in the divorce action, where they list the wife's, "Well we had a bank account with 60,000 dollars in it. Now we're down to 30. What happened?"
Leh Meriwether: "Well, I repaid Jimmy over there."
Todd Orston: And sometimes they'll go to great lengths, meaning the person that loaned the money might take money out of their account. It's cash. And then they don't actually give it to the person going through the divorce, but they just still spend it as cash, and then they will come into court, and they'll be like, "Well, no. Here, here's evidence that this person paid it and I borrowed it, and therefore I had to pay it back."
Todd Orston: And that's where we are going to look more at spending issues and things like that, to try and determine whether or not it truly was a loan. If any paperwork was done, and even if paperwork was done, if there's some shady business going on, and the court might not believe that it truly was a loan, and just put that on the person who borrowed it.
Leh Meriwether: Yup. And so some people [inaudible 00:25:24] created a repayment of a debt before the case gets started. Then there's other cases of a phony debt that hasn't been repaid, but they'll put it on the, what we call, a marital balance sheet where we try to balance out and make things fair and equitable in dividing out the marital estate, but they'll put this debt on there that doesn't really exist, and say, "Well, I owe this money to John over here. But I'll take that debt, I'll be responsible for it. But I need an offset, and I need a greater portion of the retirement account as a result."
Leh Meriwether: So that is also fraud, and it's got to be a legitimate debt. And most of the time, the parties are ... The other party's aware. "You never, we never borrowed money from Jimmy. What uncle Jimmy? What are you talking about, you're making this up."
Todd Orston: Jimmy's a nice guy, Jimmy's giving money to everybody. That's amazing.
Leh Meriwether: Yes. So security deposits. That's another place that people will try to hide money. They will pay extra ... They'll put an extra security deposit down on a rental place or something like that, or something they're using, or they'll pay an extra security deposit on a storage unit. So there's times where people will basically use that ... Whatever they're working with. Whether it's a rental property that they are going to move into, or it's going to be a storage unit. They pay a huge security deposit. "Well, they said I was a credit risk. So I had to give an extra 5,000 dollars."
Leh Meriwether: But they know that they're going to get it back as soon as the divorce is over with.
Todd Orston: Yeah. And usually what we find is that once somebody starts playing that game, we have to look at everything that might require ... And I say might require, not does require. There's some places where there's absolutely a requirement for a security deposit. There are other times where only if you have bad credit or whatever, but then someone's like, "No, no, no. Let me pay a little bit of a security deposit."
Todd Orston: Because they know a different attorney or their spouse might not ask, might not look, and then again, it might only be a thousand here, 500 there, whatever. It could amount to 5,000, 10,000, 15,000 dollars at the end of a case. So it is some place where maybe you can't put hundreds of thousands of dollars, but ten, 15,000 dollars, that's nice.
Leh Meriwether: Yeah, depending on the size of the marital estate, it could make a big difference.
Leh Meriwether: Alright, so another place we see it ... Now, I wouldn't say this is per se hiding money, but you've got cases where someone has a patent, or a copyright, or royalties from a book, and what they do is they just don't say anything about it. Or they severely undervalue the patent, or the copyright, or the royalty for a book, or a song, we've seen that too. So someone's got a song that's out there that's still, they're still receiving money for.
Leh Meriwether: Actors, they get paid residuals for things they have previously done.
Todd Orston: Yeah, and I will tell you. Where people get into more trouble is when you don't ask the right questions, because I've seen people where, let's say there was a song. And it hasn't gotten traction, it hasn't made any money. But digging a little bit, you find out it's on the verge. So you have to be thinking ... Like a book. "Well, the book hasn't sold any copies."
Todd Orston: You do a little bit of digging, and you find out that there's a contract ready to be signed, and your spouse is going to walk away with a lot of money.
Leh Meriwether: Or the person's about to go on Oprah soon.
Todd Orston: Yeah, that's right.
Leh Meriwether: Something like that.
Todd Orston: That's right, and make the book list, right? So you have to be very careful, and you have to ask the right questions, and sometimes we as attorneys have to add items like that, and issues like that into an agreement saying, "Alright, that's fine, it's not worth anything. Then you don't have any problem with my client getting 50% of the value of that song. Right? Why would you have a problem? It's worth nothing." So we [crosstalk 00:29:31].
Leh Meriwether: Same thing with patents. You'll see that, where someone has just gotten their patent, but they haven't sold the rights to it yet. And they may have been holding off on selling their rights knowing the divorce was right around the corner. So there's, you have to negotiate how you're going to handle that value and what future profits may come from it. Alright.
Leh Meriwether: You know, sometimes people will set up ... Most of the time, when people create college accounts, they're really for the purposes of their children, but occasionally, someone might create a custodial account for their child claiming, "Oh, that's for the child."
Leh Meriwether: But then, no, it's really just hiding the money, and they plan on spending it.
Todd Orston: Yeah. The money in those accounts is supposed to be used for a child's education. It does not mean that someone with some nefarious intent might not abuse that and do the wrong thing, and take the money out and use it for their own purposes.
Leh Meriwether: And sometimes that could create a bank account with their child's name on it, saying, "Hey, I'm setting this aside for their car."
Leh Meriwether: And then they just take the money and don't buy them a car.
Todd Orston: Yeah. And usually, just so you know, when that issue gets presented to a judge, usually ... a 529 is different. Some kind of formal education account, but, "I put money aside for a car. I put money aside for X, or Y, or Z."
Todd Orston: Most of the time, the judges will look at that and say, "No, that's not acceptable. That's going to be divided by the parties."
Leh Meriwether: And you can negotiate in there that if they don't use it to purchase the car, that they have to give half of it to the other parent, or the other spouse, I should say.
Leh Meriwether: Alright. So here's a fun one. Salary paid to a nonexistent employee. So you've got a business owner, and he's, "I've got ten employees, and this employee over here is 60 grand a year."
Leh Meriwether: And you're like, "I've never met this employee. Who are you talking about?"
Leh Meriwether: But you've got to dig a little deeper when you get someone's information from their accountant or whatnot when you're digging into what's on their books, and there's this fictitious employee. Usually a forensic accountant will catch it.
Todd Orston: I'll do you one better. Not only is it a fake employee, it's the other spouse's boyfriend or girlfriend.
Leh Meriwether: Oh, yeah.
Todd Orston: So it's not a fake person, it's just that they are giving a sizable salary to someone, and it turns out, after digging, it is their new significant other.
Leh Meriwether: Yeah. And seeing, to follow up that, I've seen where they had the corporate condo was actually where the boyfriend or girlfriend was staying.
Todd Orston: You know on the radio they can't see the bunny ears, right? When you're ...
Leh Meriwether: That's why I need you. So up next, we're going to continue to dig into these crazy ways that people try to hide money, and they just ...
Todd Orston: Try to gain the system.
Leh Meriwether: Try to gain the system. And sometimes truth is just stranger than fiction. We'll be right back.
Leh Meriwether: Welcome everyone, I'm Leh Meriwether, and with me is Todd Orsten. Todd and I are partners at the law firm of Meriwether and Tharp, and you're listening to the Meriwether and Tharp Show. If you want to read more about us, you can always check us out online at Atlantadivorceteam.com. Well this show, we've been talking about the crazy ways that people try to hide money in divorce and family law cases. And you know, we still have a bunch more to hit, so we're going to go rapid fire for this last, unfortunately, last segment.
Leh Meriwether: I'm sure if we spend the time, we could remember and come up with a lot more crazy things we've seen, but let's just hit it.
Todd Orston: Stop talking about it, let's do it.
Leh Meriwether: Alright. So going back to small business owners. I've seen situation where they intentionally delay signing a long term business contract until after the divorce, because when valuing a business, often it could be valued on long term contracts that a business may have. They could be service contracts, that sort of thing, so that's a way to potentially lower the value of a small business by not signing potential contracts until after a divorce.
Leh Meriwether: Another one is expenses paid for a boyfriend or girlfriend, such as gifts, travel, jewelry, rent, or college tuition through a credit card. Even seen situation where a party gave their credit card to their boyfriend/girlfriend, and they just went to town. Thousands of thousands of dollars, and then tried to say, "Oh, that's just a marital debt."
Todd Orston: Yeah. And sometimes, it's not. Again, a credit card, it's not like they're just taking cash advances, but if this is something that's going on over a long period of time, what you have is 100 dollars here, 50 dollars there, and it adds up. And there are sometimes bigger ticket items. TVs, a sofa, this or that, and we've had case where-
Leh Meriwether: Jewelry.
Todd Orston: Jewelry. Where we've looked through, and the amount that was spent is 50, 75, 100,000 dollars because it's been going on for a long time, and it was easy for those parties to overlook it, just because it's like, "Oh, well, it was only 1,000 dollars my spouse spent this month."
Todd Orston: Okay, well, maybe that's not abnormal, whatever. But when you start looking at the history, and you find out, oh, there's a significant other, you realize what was happening.
Leh Meriwether: And there was a case ten, 15 years ago, where through the course of the trial, evidence came out that basically showed it was 60,000 dollars. And needless to say, our client got that money back.
Leh Meriwether: Alright. And here's an interesting one, investment and municipal bonds, or series EE savings bonds, where there's not necessarily interest that's reported on a tax return. So if someone doesn't disclose it, it may not show up on a tax return, whereas ... Because there's no interest being earned that year. Whereas you have an investment account, there's often interest or a loss that show up on your tax return. So that's if it's not disclosed initially in what we call discovery, you find it through the tax return. But this one, not so much.
Todd Orston: Not so much. And again, what ends up happening is these accounts, or these bonds, rather, they could be five year, they could be ten year bonds. It just depends, so there could be a large amount of money, and if you're not looking at the records from ten years ago, okay, you may not know that they exist. Lo and behold, you get a divorce, and next thing you know, the next year, your spouse, or former spouse, is sitting pretty and is now collecting all of that money.
Todd Orston: So you need to, again, keep your eye open, look at your finances, and be aware.
Leh Meriwether: Yeah. And sometimes, you find them by looking at old bank accounts and see where there was a ... Someone had purchased it years ago.
Todd Orston: Right.
Leh Meriwether: Alright. Gold and silver bars.
Todd Orston: That goes back to the ... Make sure you take pictures. But we have seen the slow purchase of things like precious metals, because again, if 50,000 dollars disappears, and suddenly there are gold bars in the house, well you know, and you are aware. We've seen people where it was a systematic, slow trickle kind of purchase, of a precious metal. Sometimes gold, sometimes silver, platinum. And had the other person not either seen the gold or the silver, or if they hadn't hired an attorney who was going to look at the bank records to see money routinely going to this one or few different brokers who sell the precious metals, it's gone. It's in the wind.
Todd Orston: So again, you have to stay aware.
Leh Meriwether: And sometimes there's special writers. So people, you can find it by looking at insurance policies. They may add a writer. I've had a case where there was like, 100,000 dollars in jewelry that suddenly disappeared. Well, except for 20,000. But 80,000 dollars in jewelry disappeared. Now, fortunately, they had a writer for 100,000 dollars. And one party was not living in the house and the other party was, so it was presumed that this other party had taken the jewelry, and that went against them in the court.
Todd Orston: Yeah. I had a case where a bunch of jewelry disappeared. And basically, "I don't know what happened, it got stolen, it must have been stolen out of the safe."
Todd Orston: Really? The safe that only you have the ... Really? Okay. That's fine. And then finally, we said, "Well, okay. Call the police. Go ahead and file a report about these stolen items that were stolen out of a safe that has a combination that only you know, but I want a police report."
Todd Orston: And lo and behold, they weren't willing to go and falsify a police report, and we were able to determine that those items did exist.
Leh Meriwether: Yeah. You could do the same thing with the, "Alright, file a claim on your insurance. Let's at least get the cash."
Todd Orston: That's right.
Leh Meriwether: But it didn't happen.
Todd Orston: It didn't happen.
Leh Meriwether: Alright. So now this isn't one where people necessarily hide stuff, but soemtimes people can overlook credit card points, frequent flyer miles, Marriott points. We've seen cases. Again, it comes back to a business that may use an American Express a lot, but there could be 10,000 dollars in points on an American Express card that's a corporate card, so you just never know that's one place to look at it.
Leh Meriwether: You know, an interesting thing is hiding cash in specialized containers, and I'm not saying ... Again, we're not advising people to do this, but you can go to Pinterest and see all kinds of crazy containers people have used to hide money. There was a case of a woman, I think this was a money laundering case, but she had these special high heel shoes, and they were more like platform shoes, but she was ... She had tens of thousands of dollars in her shoes. So that's a potential problem.
Leh Meriwether: Prepaying or overpaying certain bills or credit cards, that's another situation that we see.
Todd Orston: Yeah. I mean, somebody has a VISA account, and there's 100 dollars owed, and they pay 2,000 dollars.
Leh Meriwether: Right.
Todd Orston: Then on the bank record, it's going to look like a payment to that credit card, but they know that at some point, they're going to be getting a check. A refund check, back from VISA, and they'll be able to cash it and it's theirs.
Leh Meriwether: Sometimes they'll let you keep it as a credit. And then you just use that card with extra money on it.
Leh Meriwether: Alright, so here's another one. Purchase of prepaid credit cards, or gift cards.
Todd Orston: Gift cards, yeah.
Leh Meriwether: So seeing people just go out and get all kind ... Because you can get Kroger cards, grocery cards, gas cards.
Todd Orston: Or just VISA cards. VISA, American Express cards. And you can get them upwards of ... I don't know if it's more, if you can get more than 500 dollars, but somebody saves up and starts buying those cards over time, they could have thousands of dollars.
Todd Orston: I mean, keep in mind, 500 dollar cards. They could amass thousands of dollars of those cards that the only way you're going to find out, because ... Sometimes it's even harder, because what people do is they go out and they take cash out so there'll be a cash advance, and then they go and buy a 500 dollar card, let's say, and you have to end up backing into the problem once again.
Todd Orston: And I you see a recurring 500 dollar withdrawal every month for the last 24 months, then you know that there's problem, or there at least might be a problem.
Leh Meriwether: Now another one we see is ... We're running out of time quick. Alright, so part of the paycheck is being transferred to a new account, but usually we'll check that by looking at a paycheck stub, you'll notice that, "Hey, your paycheck's being split up into two bank accounts. Where's the other bank account?"
Leh Meriwether: That's actually not a great way to hide money.
Todd Orston: Well no, the reason that it could work is that if you don't look carefully enough, and the other person basically is like," Yeah, that's my income. I used all of that money to pay our bills, and pay this, and pay that."
Todd Orston: I you haven't looked closely enough and identified there's this third account, or this other account out there, then you might just make the assumption that the money was used, and it wasn't. It's sitting in an account out there.
Leh Meriwether: So another one is a partner, someone informs an LLC that's put in the name of someone else-
Todd Orston: Yeah, this one's interesting.
Leh Meriwether: And they take, they funnel all their earnings into this new LLC.
Todd Orston: Or a portion, right.
Leh Meriwether: Or a portion.
Todd Orston: Yeah. And there have been cases where that happens, where somebody creates the LLC, money flows into it, and then if a claim, if the other party is then like, "Well, I want to know about the LLC."
Todd Orston: They're like, "Well, that's not my LLC. It's in the name of a third party.So all of that is that person's income, and you can't have it."
Todd Orston: Doesn't work out that way, but again, creative ways people have come up with to try and gain the system. Or for professionals, since we're talking about professionals, failing to invoice clients. So anyone who might be married to somebody who's a professional, who has clients and bills, if suddenly the amount of clients and the amount of billing goes down, you may need to do some kind of forensic search to see if they are limiting the billing in order to save it up for later.
Leh Meriwether: You know, the one thing we can't hide?
Todd Orston: We're out of time.
Leh Meriwether: We can't hide the fact that we are out of time. This was a great show, and we really enjoyed digging into these things, because they ... Like I said before, truth is stranger than fiction. Everyone, thanks so much for listening to the show, and you can listen to past shows on divorceteamradio.com.