Unveiling Financial Fraud in Divorce: Types, Taxes, Red Flags, and Investigative Steps
Document Type
Article
Publication Date
2024
Keywords
Divorce fraud, red flags, detecting divorce fraud, taxes in divorce fraud, finding assets
Digital Object Identifier (DOI)
https://www.nacva.com/content.asp?contentid=1276
Abstract
Approximately 40 to 50 percent of marriages in the United States terminate through divorce. Financial infidelity and the unique blend of financial and emotional pressures during divorce can contribute to the occurrence of fraudulent activities. Not surprisingly, divorce fraud allegations are estimated to arise in around half of all divorces; however, the discovery of evidence is scarce. Divorce fraud exhibits distinct characteristics, such as its diversity and complexity, its time-compression, the onset of suspicious actions prior to divorce filings, the involvement of tax-related aspects, and the considerable challenges and expenses associated with its detection process. This article aims to assist divorce fraud investigators in solving the puzzle of identifying and preventing such fraudulent behavior. The article explains four main types of divorce fraud (concealing assets, hiding income, improperly valuing assets, and dissipating funds), explores the interplay of taxes, highlights red flags for potential fraud, and outlines steps to further investigate suspicious activities.
Was this content written or created while at USF?
Yes
Citation / Publisher Attribution
Journal of Forensic and Investigative Accounting, v. 16, issue 1, p. 58-73
Scholar Commons Citation
Stowell, Nicole Forbes; Schmidt, Stowell K.; Katz, Irwin; Segrest, Sharon L.; and Pacini, Carl, "Unveiling Financial Fraud in Divorce: Types, Taxes, Red Flags, and Investigative Steps" (2024). School of Information Systems and Management Faculty Publications. 77.
https://digitalcommons.usf.edu/qmb_facpub/77
