It happens to men too, but not as frequently. This phenomenon most often occurs with the baby boomer and Gen X population and when one spouse controls all or the majority of the finances. We initiate one or more of these investigations weekly.
Unexpected signs of financial loss or impropriety by a spouse can be as innocuous as a late notice in the mail or a call from a creditor the client is unfamiliar with. We don’t have an xyz mortgage or credit card? At times, a lawsuit is filed, and the client is unexpectedly served. Many times, it is a gut feeling that something is amiss.
Financial irregularity or loss of net worth is also discovered when a party contemplating divorce consults with us before meeting with an attorney. These investigations can uncover debt incurred by the spouse the client is unaware of. In California, there are instances when an individual can be held responsible for the debt a spouse incurred, with or without prior knowledge.
While there are many ways to lose money or misappropriate funds, the most common scenarios we encounter include:
A Second Relationship or Family: Monies are diverted to pay rent, mortgages, jewelry, travel, or child support.
Inappropriate or Day Trading: Margin trading, naked call options, derivatives, crypto, junk bonds, etc. can quickly lead to significant losses.
Addiction: Gambling, drugs, alcohol, online chat porn, prostitution, etc. We recently finished an investigation where a subject spent $1.2 million on prostitutes and online sex activities.
Investment Fraud: We investigated an individual who had invested in privately funded alternative real estate loans through a small company. The subject had been referred to this company by a friend, who had received legitimate returns. Through investigation, we learned the head of the investment company began funding his lifestyle with his client’s investments. The subject lost $4.2 million and did not want to disclose the loss to his wife.
There are many other factors and events, legitimate and otherwise, that can lead to financial ruin. The information necessary to protect your financial future is available. All inquiries are confidential.
By Michael F. Framé, The Framé Group