Financial Fraud and Divorce

Financial fraud is a deception that is hard to accuse and even harder to understand, especially if assets have been joined over the course of your marriage. Many victims of financial abuse are at a higher risk of being a victim of fraud.

Conspiring spouses can and will hide assets from their partner’s in different ways, some of the most common are:

  • Reporting a lower income or claiming higher than actual expenses
  • Undervalue or hide property
  • Secretly loaning or giving money away to friends or family members
  • Excessive or elaborate spending
  • Having sole control over marital assets, bank accounts, and money.

According to a  survey conducted by the National Endowment for Financial Education, “31% of people who combined finances with their significant other have been deceptive with their spouse or partner about money.” The survey demonstrates that there is a large percentage of people who hide or have hidden purchase from their spouse. This study also shows that there are many that have lied about what kind of debt they are facing or their total income. Approximately ⅛ people reported that their marriage ended in divorce because of the financial fraud.

To fight the high risk of hidden assets, it is very important that both partners understand their finances. Before you file for divorce, it is very important that you and your partner calmly sit down and discuss your assets, financial information, insurances, and property documents. If you realize that financial fraud might be a possibility with your partner, you must contact your lawyer immediately. When a divorce is first initiated, both parties are bound by law with the Automatic Orders, this order prevents any partner in the marriage from transferring, removing, or withdrawing any form of a marital asset before a settlement is reached. The Automatic Orders also reassures that neither partner can cause unreasonable debts outside of usual household expenses or legal fees. These orders were put into place to help protect parties and their families.

New York State Laws confirm that both parties of the divorce disclose both marital and separate assets. Concluding in a discovery, a failure to honestly represent all of your assets, can lead to a tragic result in the divorce case. A judge can intervene in situations where one spouse is refusing to show discovery documents by issuing an Order. In some circumstances, a partner who is knowingly defining a court order to either show requested documents will be found to be in contempt. Contempt charges can result in monetary fines. Lying about assets or net worth during a sworn deposition testimony is considered to be perjury, which is a crime punishable by jail time.

At the best Long Island divorce firm, Simonetti & Associates, we understand how troublesome and aggravating a divorce can be. Which is why we want to help. Come into our Woodbury, Long Island office for a FREE consultation to make this whole ordeal a lot easier.