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Common Ways Men Hide Money


wealthymattersA husband who hides assets usually has very specific, predictable objectives. In general terms, his goals are to:

1. Hide, understate, or undervalue certain assets,

2. Overstate debts,

3. Report lower than actual revenue, and/or

4. Report higher than actual expenses.

Here are a few of the most predictable strategies.

Hoarding unrecorded cash. Moving cash in the form of currency leaves no paper trail, and offshore bank accounts are relatively easy (from a legal standpoint) to open. The disadvantage is that laundering over $100,000 in currency can be time consuming and will likely require travel. Depending on the circumstances, this tactic could involve the very serious criminal acts of money laundering, violation of cash transfer reporting requirements, income tax fraud and perjury. At a less sophisticated level, men stash money in safe deposit boxes, in the house or elsewhere. Think through your husband’s recent habits and activities. Does anything lead you to believe he is hiding assets in actual cash?

Secreting already recorded cash receipts. Advantage: This can be completed as part of a complex accounting scheme, which may be too complicated or expensive to discover. Disadvantage: Once cash is recorded, its absence or transfer is discoverable.

Purchase items that could easily be overlooked or undervalued.Maybe no one will notice that expensive antique/carpet that’s now at his office? Were you wondering why he recently made several significant additions to his coin/stamp/art collection?

Underreport income on tax returns and/or financial statements. If it’s not reported, it can’t be used in a divorce financial analysis. Businessmen resort to understating revenue. For this, there are lots of options from which to choose. Some are simple and easy. Deferring revenue by manipulating the timing of revenue or accounts receivable may not constitute tax fraud. The disadvantage is that, depending on the business owner’s sophistication, this can require a fairly predictable co-conspirator. If the co-conspirator is placed under oath, the scheme could result in perjury charges for the husband.

Defer salary, delay signing new contracts and/or hold commissions or bonuses. This sneaky trick means this income won’t be “on the books” during the divorce proceedings.

Overpay the tax authorities or creditors. If your husband overpays, he can get the refund later, after the divorce is final.

Create phony debt. Your husband can collude with family members and/or friends to establish phony loans or expenses. Then, he can make payments to the family members or friends, knowing that he’ll get all the money back after the divorce is final.These schemes usually include deceptive cover stories, financial statement manipulation and lying under oath. Sometimes the stories even become more intricate, involving failing businesses, gambling addictions and other personal failures.The more believable the story is that the money is gone, the more likely the victim will give up looking for it.

Set up a custodial account in the name of a child, using the child’s social security number. He could also use his girlfriend’s social security number, in which case it might be difficult to locate the account.

Transfer stock. Your husband may transfer stock/investment accounts into the name of family members, business partners or “dummy” companies. After the divorce is final, the assets can be transferred back to him.

Timing is critical to detect schemes using financial statement manipulation, and benchmarks are key. Ideally, a woman must be financially aware and involved from the onset of her marriage. Consistent participation from the start is critically important because,if your husband has been hiding income/assets over years or decades, it will become virtually impossible to trace/find them.

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About Keerthika Singaravel
Engineer,Investor,Businessperson

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