Divorce and the White-Collar Wife

Although I have written blogs in the distant past on white-collar wives and divorce, the time has come to bring this subject front and center once again after I was asked by a forensic investigator recently, “why do/don’t wives divorce their white-collar husband?” The answer to that question is complex but informative. Hopefully, this blog will put to bed the general assumption that divorce in white-collar situations is a move to hide assets, aka fraudulent conveyance from one party to another, and why legal protection via divorce for innocent spouses is a smart move rather than a crime.

It is widely and wrongly assumed that wives know about the fraud her husband committed simply because they live under the same roof with a perp, and in many cases, because she operates the household budget on funds earned solely, or in part, by her husband. Lest there be any doubt, most fraudsters do not announce that they are crooks to anyone, especially not to their wives. Although most of these guys already make a good living, they want the cache of being high earners in the eyes of family and friends which translates into their being moderately to immensely successful. Another consideration regarding how wives are not in the loop is that these guys do not suddenly deposit thousands or millions of dollars into a joint marital account. Most perps open “other accounts” to park the illegal funds and bring them to the forefront under the guise of a new client, inheritance, lottery winnings, bonus, or any number of untruths. Also, keep in mind that many marriages these days consist of two bread winners in the household and wives are consumed by their own jobs, keeping the family on track, and perform the lion’s share of supervising children. They don’t have five minutes to themselves let alone the time to peruse bank transfers, receipts, and an accounting of every new item that crosses the threshold of their property but regardless of whether or not a wife works outside the home, financial fraudsters are highly persuasive (manipulative) and always have a believable explanation for a new toy, travel, household renovation, a home upgrade, vacation home,?or a new car. The same fingers that too often point at the wife as “knowing” should more correctly be aimed at co-workers, managers, clients, and business owners who are on the frontlines of a perp’s fraud, but this is rarely the case. How could THEY not know? is just as ridiculous a question as how could a wife not know, but somehow the literal buck stops at the feet of an innocent spouse, and in some cases, people get so deeply mired into this particular blame game that they forget about the perp entirely while focusing on the guilt or innocence of the spouse.

Courts and the public see white-collar wives as either truly stupid, (the little lady), who should have known,?or make wild assumptions that she is all-knowing and part of an articulate plot to hide hundreds of thousands or millions of dollars of ill-gotten funds. I’m sure there are wives who do know about their husband’s fraud, and are either on board with it or go along with it under duress, but of the 150 women who have reached out to me over the years,?the majority have been blindsided and it usually takes a while to convince them that while their disbelief is valid, (“but he’s a really good guy”), paper trails don’t lie, and they better take proactive care to prepare for what is to come.

When a wife reaches out to me for support or advice, I lead by telling her that although I am pro-family, she should file for divorce asap. This suggestion is often shocking because many wives want to stand by their husband, especially those men who portray themselves as pitiful and broken. For better or for worse is a commitment most take seriously, and fraudsters often downplay an investigation or prosecution to their wives and family to keep from being abandoned by them. This is a dangerous, manipulative, and self-serving action on the part of the perp. Criminal attorneys are also often self-serving in that they too frown upon a wife divorcing his/her client. Understandably they want to present the accused as a family man with unwavering familial support who made a mistake rather than as a self-serving criminal. Judges interpret family support as a sign of personal stability, and sometimes this bears well regarding sentencing, but not always. The bottom line is that the attorney wants to win the case and the husband wants the least prison time possible, but that tab is often paid by the wife and kids because this places a wife at significant risk financially due to the government’s freezing, seizing, and forfeiting of not only the perp’s share of the marital estate, but the wife’s fair and legal share of assets that were decades in the making, apart from the fraud, including her own retirement vehicle. A divorce action upon learning of an investigation can and often does prevent an innocent spouse from losing her share of the marital estate before the government’s unconstitutional overreach. While it is justifiable to seize and forfeit a perp’s share of assets, it is unjust and unlawful for the government to seize a wife’s assets when there is no evidence of a crime against her and with no intent to indict or prosecute her. Too many courts refer to wives and children as collateral damage all the while knowing this carnage can be avoided if they would apply the law correctly as some other jurisdictions do. It’s as if some prosecutors and judges are performing their own kind of white-collar crime against innocent spouses and children. Yes, I said it. Innocent spouses and children are low hanging fruit where free money can be had with or without a strike of a gavel. The practice of law (no wonder they call it practice), is often subjective but more judges are deviating from textual law and are instead performing some kind of rogue interpretive dance that others in the legal arena are following because it's easy money and has great career benefits. Sound familiar? It. Is. Appalling.

It cannot be said enough that too many jurisdictions across the United States negate marital, property, and constitutional law to grab whatever assets they can from an innocent spouse under the guise of restitution and penalty fees related to the perp. The innocent spouse has not and will not be charged with any crime, yet, the government demands a wife prove her innocence to regain her assets if she protests. This is goes far beyond punitive and into the territory of legal abuse. An innocent wife is considered guilty until proven innocent, yet the perp is considered innocent until proven guilty. Once a marital estate is seized it is usually impossible to gain it back, especially because inexplicably, (and so conveniently), innocent spouses are considered third-parties rather than joint asset owners. This means spouses have to get in line (usually at the back of the line) behind others laying claim to HER illegally seized assets.

Civil seizure across the board is nothing more than robbery on the part of the government. Several institutions have tried for years to put an end to this abomination, yet it continues.?To make matters worse,?(as if it could get any worse), these seizures are most often performed during the investigative phase before formal accusation or a finding of guilt.?The government’s tactic is to seize assets prior to indictment or prosecution because the burden of proof is so low pre-indictment/prosecution, and to keep perps from moving assets to unreachable locales.? But civil seizures and forfeiture in white-collar cases leave innocent wives and children without operational funds to live on while transitioning into life without a second or sole income from their husband/father. This is in mine, and in other’s view, an outrage.?

When a wife learns that her husband is under investigation, panic sets in immediately and husband’s often attempt to make amends by moving assets into the wife’s, children’s or other family member’s names, naively thinking that those assets will then be protected. This?IS considered a fraudulent conveyance! Moving assets under these circumstances is criminal however, a wife trying to legally protect her share of the marital estate via divorce is not criminal. It is legal and it’s smart. In some cases, even without a consultation from me, a wife is so angry with her husband that she won’t hesitate to protect herself by filing for divorce and legal separation of assets, and has every right to do so.?A financial crime committed by a spouse is certainly just cause for divorce. Criminal investigators look at everything with a critical eye, as they should however, an innocent spouse should not be accused of hiding assets, but rather be known as a woman who is performing proactively to protect her own assets, and in turn, her children’s wellbeing, to keep from being not only penniless, but homeless, rather than an accomplice after the fact to her husband’s criminal actions.

For those in the legal field looking for more insights on innocent spouse rights and what many are calling “a new area of the law,” my guidebook,?In Defense of the Innocent Spouse,?is near completion. This book covers the history of marriage and how (shockingly) that antiquated history plays out in courts today for the innocent spouse.?Corporations and lone actors facing indictment and prosecution for fraud have a straight path forward in the courts.?DPA’s and enormous fines are routinely handed out to corporations and that is just the cost of doing business in a highly competitive multinational marketplace. The lone actor goes through the process with his/her criminal attorney and the outcome prevails. Tragically,?the innocent spouse’s course of defense is much more complex than either a corporation’s or lone actor’s litigation.?Defending an innocent spouse requires knowledge of state laws regarding property ownership, marital law, tax law (both state and federal), constitutional law, family law, and more.?This book will give legal practitioners the knowledge they need to consolidate all areas of innocent spouse protections into one specialty. This book has been years in the making and will hopefully have a positive impact for innocent spouses and their children who should never have been drawn into these shark invested waters to begin with.

Lisa Lawler, The White-Collar Wives Project October 15, 2021