Types of Financial Fraud That Can Happen During a Divorce

Types of Financial Fraud That Can Happen During a Divorce

Divorce can get pretty nasty, with both parties trying to get their fair share of assets, However, some people try to get more than their fair share through cheating and stealing, committing fraud in the process. If you’re going through a divorce and have been noticing questionable behavior in your spouse with red flags going up everywhere, you could be a victim of financial fraud. This is why you need stock fraud lawyers on your side – in order to protect and recover your losses.

There are a few types of financial fraud that can occur with divorce. Take a look:

Dissipation

Essentially, this refers to the practice of one spouse hiding money or spending money without the other spouse’s knowledge or approval. Often taking place during a divorce dispute, this depletion of marital assets can be the sign of something more troubling. Check out these red flags:

  • Money spent on gifts and trips as part of extramarital relationships
  • Cash loans to friends and family without telling the spouse
  • Selling off of expensive assets at less than value
  • Excessive spending, including both personal and business cash accounts
  • Foreclosure on the home
  • Destruction of personal items
  • Failure to maintain mutual property
  • Gambling losses
  • Reckless stock market trading with no permission from spouse

Hidden Assets and Misrepresentation

These two are very common hallmarks of financial fraud through the divorce process. When one spouse consistently hides assets or misrepresents the family finances, this often works out in their favor. That’s why it’s important to discover this type of fraud as early as possible, to avoid too much cash going to one party. You may encounter one spouse capitalizing on sob stories to get people on their side. For example, the divorcing spouse may try to gain the trust of unsuspecting relatives and friends to help them hide money. How do they do this? They convince their “friends” that the other spouse is squirreling money away, stealing from them or driving up the credit card balances – all of which may not even be true.

Lifestyle Changes

Be on the lookout for your spouse suddenly living beyond their means. You should be suspicious of where that money is coming from.From new cars to trips to whole new wardrobes, these kinds of behaviors are red flags. It’s harder to prove over other kinds of fraud, but the sooner you realize what’s going on, the better. Here are some warning signs:

  • Change in behavior
  • Living beyond means
  • Confidentiality level changes; they become aloof and mysterious
  • Pattern changes pointing to worsening addiction
  • Mail gets rerouted to a location other than the home
  • Change in daily habits and routines
  • Excessive time on computer
  • Increased deception
  • Increase in cash withdrawals from banks; concealment of such transactions
  • Unauthorized trading or stock market transactions
  • Unauthorized liquidation of assets

Financial fraud can be difficult to spot, diagnose, investigate and prosecute. But if you have the right professional in your corner, you can get the issue resolved as smoothly as possible. Call Thomas Law Group if you suspect you’re the victim of divorce fraud, as we specialize in recovering losses for investors.

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