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6 signs your spouse may be committing financial fraud

| Jul 13, 2020 | High Net Worth Divorce |

Going through a divorce is never an easy experience. If you are half of a high-asset couple, divorce can present even more challenges, especially if your spouse attempts to hide assets from you so as to deprive you of your rightful 50% share of your California community marital property.

While marital asset hiding on the part of angry, vindictive and/or greedy about-to-be former spouses has been going on for decades, most such spouses are not hardened criminals. Instead, they simply succumb to the “Fraud Triangle” made up of the following three elements:

1.      Opportunity: Your spouse believes (s)he can hide marital assets without anyone catching him or her.

2.      Pressure: Your spouse believes divorce is inevitable, but feels (s)he cannot share his or her feelings with anyone.

3.      Rationalization: Your spouse maintains his or her good self-concept by convincing himself or herself that the marital asset hiding represents nothing more than what any honest person would do in similar circumstances.

Red flags

Virtually no spouse can accomplish marital financial fraud without raising some red flags in the process. In all likelihood, you will observe one or more of the following:

       (S)he no longer confides in you.

       (S)he makes unexplained cash withdrawals from one or more of your joint bank accounts.

       (S)he spends more time than usual on the computer, but shuts down the screen when you enter the room.

       (S)he stops receiving snail mail at home, diverting it to his or her office or a post office box instead.

       (S)he gives or loans money to other people, especially family members or friends, without your consent.

       (S)he attempts to conceal the details of any and all financial transactions from you.

Engaging a forensic accountant

The more financial assets you and your spouse have, and the longer time you notice him or her exhibiting suspicious behavior without your doing something about it, the easier it becomes for him or her to successfully hide marital assets. Your wisest strategy consists of sharing your suspicions and concerns with your divorce attorney and adding a forensic accountant to your legal team. Only an accountant who has received specialized investigative training can legitimately hold himself or herself out as a forensic accountant well equipped to discover and track hidden assets.