28 Mar

Second Edition of Lifestyle Analysis in Divorce

Exchanging books with family lawyer Randy Kessler in 2016.

The American Bar Association has asked me to write the second edition of Lifestyle Analysis in Divorce Cases: Investigating Spending and Finding Hidden Income and Assets. It was (and still is) the only book on the market that details how to do a lifestyle analysis and how to use the results.

I do lifestyle analysis in very high net worth divorce cases, and the results are used to determine standard of living (which then helps calculate support), find sources of hidden income, and find hidden assets. Read More

26 Mar

Determining Income Using the Net Worth Method of Proof in a Divorce Case

iStock_000019355019XSmallHow can income be calculated in a divorce case when a spouse refuses to produce documentation or is suspected of concealing sources of income? One way is through the Net Worth Method of Proof, which is used to analyze income and assets when detailed documentation is not available, either because the opposing spouse is obstructing efforts to get data and documents, or because data and documents are legitimately not available.

This method of determining income is used by the federal government in criminal income tax cases. Because it is accepted in federal criminal cases, family courts often will accept this as a reliable method for calculating income.

A detailed analysis of expenditures is performed using any documentation available. Each expenditure for the period under review is captured from bank, brokerage, and credit card statements, and each item is categorized so that totals can be accumulated for the period under analysis. Read More

25 Mar

Internet Dating Scams

There’s no shortage of fraud surrounding dating these days, especially with online dating. It seems like such a great way to meet people with similar interests. Get on a dating site, they said. It’ll be fun they said. Until you find out the person you’ve been chatting with is nothing like they portrayed themselves to be.

Internet dating cost this woman $273,000.

A woman named Yin signed up for a six month membership with match.com. And she got catfished by someone using pictures of a U.S. Marine.  He told her his name was David Perez he was deployed in Afghanistan, and they exchanged a bunch of text messages.

They “fell in love” over text messages. He told her to keep things a secret because her friends would be jealous.

After 5 weeks, Yin’s online “love” asked her for money.  There was a big story about a secret mission in Afghanistan, a military attorney, a non-existent company in London, and a Chinese bank. She sent money totaling over $273,000. Read More

21 Mar

How to Avoid Business Opportunity Frauds and MLM Scams

In a past appearance on CNBC’s On the Money, Tracy Coenen talked about how consumers could protect themselves from business opportunity scams and multi-level marketing (MLM) schemes. MLMs parade themselves around as business opportunities, but they are nothing more than elaborate pyramid schemes that swindle millions of consumers each year.

14 Mar

LuLaRoe Pyramid Scheme Lawsuit

And there is  another lawsuit against LuLaRoe. The  MLM  that sells leggings of questionable taste appears on the verge of collapse. A lawsuit filed in 2018 by Providence, a company that supplied LLR with goods first demanded $49 million. More recently, Providence says it is owed $63 million and it wants the court to seize $34 million in assets since owners Mark and DeAnne Stidham are a flight risk. And then the state of Washington sued LLR, alleging it is a pyramid scheme:

“LuLaRoe tricked consumers into buying into its pyramid scheme with deceptive claims of high profits and refunds for unsold merchandise,” Ferguson said in a news release. “Instead, many Washingtonians lost money and were left with piles of unsold merchandise and broken promises from LuLaRoe. It’s time to hold LuLaRoe accountable for its deception.”

The newest lawsuit was filed this month by plaintiffs Tabitha Sperring, Paislie Marchant, and Sally Poston. The lawsuit sums up the scam (coincidentally or not in language that sounds an awful lot like things I’ve written here): Read More

13 Mar

Spotting Red Flags of Investment Fraud (Ponzi Schemes)

There is no shortage of allegations of investment fraud since the stock market tanked in 2008.  Are there more investment scams occurring, or have market conditions just led to the discovery of more of these schemes? I’ll guess the latter, although no one really knows for sure.

The beauty of fraud is that so much of it goes undetected. Those involved in financial fraud actively conceal their schemes and their involvement, so it’s impossible for fraud investigators to know exactly how much fraud is happening. For example, perpetrators go so far as to pay others to participate in the scheme and cover up phony financials and non-existent promissory notes. This kind of concealment leads to more investors putting money in a scheme, and ultimately creates ever larger financial losses.

In the end, however, it doesn’t necessarily matter if we can put our finger on exactly how many of these investment schemes are out there. What really matters is being able to identify the hallmarks of such schemes so that investors can avoid them like the plague. Read More

11 Mar

Fraud is Just Part of a Controller’s Job

Can you believe people actually admit to this stuff? A survey of accounting controllers done by FloQast found that lots of controllers think fraud is a routine part of their jobs.

There are some awfully interesting results. 69% of the participants said their job is that of a risk manager who oversees internal controls. (For those who don’t know, internal controls are the policies and procedures that ensure the numbers are recorded accurately and that prevent fraud.)

64% say they’ve experienced pressure to cook the books. That’s not necessarily surprising. Results are everything in many companies, and I can easily envision executives asking how the numbers can be prettied up. Read More

06 Mar

Financial Issues In “Grey Divorce”

Divorces between older couples who have been married a long time are sometimes referred to as “grey divorces.”  Sources say that while divorce rates overall have been dropping in the United States over the last 20 years, among those age 50 and above, it has been growing.

The financial part of a divorce is often difficult, but for senior citizens, it can be even more painful. Some of the reasons it can be harder for the older crowd:

  • One spouse may have little to no financial management experience. How will he or she manage household finances going forward?
  • Dividing retirement assets can be tricky. There may have been plenty of money available to retire and support one household, but two households may not be sustainable.
  • One or both spouses may be past the age at which they can expect to find reasonable employment.
  • Poor money choices during a long marriage may mean that there is not much to split, which can be a huge problem, especially if one spouse has no ability to obtain employment.
  • The spouse in charge of the money may have hidden assets, and it could be difficult for the other spouse to uncover them.
  • If one spouse has been the primary breadwinner throughout the marriage, he or she might view the retirement assets as belonging to him or her, creating a bigger fight.

With life expectancies increasing, retirement money has to last longer. That will necessarily be harder with two households to support.