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The collateral effects of financial crime on an innocent spouse

by | Feb 1, 2019 | Firm News |

Securities fraud robs individuals and families of their livelihood, destroying financial stability and future plans. However, one group of victims is commonly overlooked: that of the perpetrator’s spouse and their family. Many spouses and children of those involved in financial crimes are living a lie, and do not know that such illegal acts are happening.  Once the truth is revealed they are commonly ostracized and left without resources to pay for basic living expenses after their joint resources were seized by the government.

Heightened awareness

The impact suffered by unknowing spouses whose partners commit white collar crime is gaining more public exposure. The American Bar Association highlighted the story of a woman who has created a webpage and online support group called: The White Collar Wives Project, which helps spouses wade through the legal and financial mess created upon their partner’s arrest.

Next steps

If you were or are married to an individual charged with financial crimes, your life has been thrown into chaos. Because the fruits of a crime are subject to forfeiture, once a post-indictment restraining order was issued against your spouse, your assets were also seized. For those left out in the cold by their partner’s lies, the ability to recover property will depend on where the litigation is at in the case against your offending spouse.

Forensic accounting needed

The efforts to unwind your assets would include an asset recovery team and forensic accounting professionals, who will untangle legal issues and identify legitimate ownership in order to separate what rightfully belongs to you from that which was obtained by fraud.

Separate counsel is essential

If you are currently living in this nightmare, you have hopefully filed for divorce. But most importantly, you should obtain your own legal counsel, because you and your spouse have different legal interests and should not share representation. Failing to do so can result in tax liability and restitution costs for activities in which you did not participate. Additionally, with your own legal counsel, you may be able to petition the court to return any untainted assets that belong to you that were not profits of an illegal scheme. After all, you are a victim of the crime too.


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