Marriage is Punishable by State and Federal Law in America

For centuries, couples have walked down the ceremonial magic carpet toward marital bliss in the company of family and friends who are there to witness their perfect union. Sometimes these ceremonies are accompanied by birdsong under the expanse of a centuries old oak tree, or the muse of waves crashing to the shore, or while standing within the sacred sanctuary of a holy place. Most people think of their wedding day as the happiest day of their life, and it is indeed something to be in awe of because this unity not only comes with the promise of “until death do us part,” but also with a wing and a prayer because the divorce rate is 50% or above. Despite this enormous failure rate, people are still plowing down the aisle with the notion that somehow they will beat the odds and live happily ever after. Arguably, the eighth wonder of the world should be those couples who do remain blissfully married for life which keeps the light of possibility burning for newlyweds. But marriage is more complicated than people realize. In fact, most couples spend more time planning their wedding than educating themselves on the legal aspects of their union, or planning for their financial wellbeing. After all, marriage is, in legal terms, an “implied contract,” and while neither party signs an actual “marriage contract,” it is indeed a legal partnership that is heavily regulated by each state.

For the past decade or more, the question has been WHO can get married, but the question I pose here today is WHY get married? Marriage truly is the tie that binds, not just romantically, but also because it is a legally binding contract that can sometimes do more harm than good. Of course there are many legal benefits of marriage that include having access to a spouse’s employment benefits like health insurance, tax breaks for married people who file jointly, (there are also tax penalties for married couples), being the legal next-of-kin when it comes to making health decisions, and rights of survivorship if planned properly. It has been said that marriage is the foundation of a sound society, and it all sounds so lovely… until something goes wrong.

People leave their marriages for any number of reasons but according to the National Institute of Health, infidelity is among the top three causes of divorce. When most people think of infidelity, they think of one spouse being unfaithful via a romantic dalliance or full blown affair. The offended spouse has the option to leave the marriage and take their pre-marital and legal portion of any assets gathered over the course of the marriage with them, depending on the laws of the state in which a divorce is sought. Absent any protracted battle over assets or child custody, it’s neat and tidy, and the ties that were once bound together so blissfully, are severed. But what happens when a spouse is caught being criminally financially unfaithful? Let’s just say that the remedy for this scenario is far outside the reach of couple’s therapy, or a nice and tidy divorce, because the instrument of marriage can and does tie one spouse to another on more levels than I can offer here.

Financial crime/fraud generates a loss of between $426 billion to $1.7 trillion dollars a year. On average, white-collar crimes by one bad actor is about a million dollars. Although rare, I relish the calls I receive from innocent spouses where their husband is under indictment for financial crimes under $250,000 because these are “manageable.” Those who are successfully prosecuted for white-collar crimes are court ordered to not only pay back the ill gotten funds, (and or any gains), but are also mandated to pay court ordered penalties ON TOP of restitution. That one million dollar criminal judgement coupled with court ordered penalties can quickly add up to over 2 million dollars, not including attorney fees. Also, if ill gotten gains are not reported to tax entities, (income derived from fraud is considered income!), the financial burden grows even higher, for BOTH spouses if they file their taxes jointly. To make matters worse, depending on the jurisdiction and available assets, the government routinely seizes all marital assets through civil asset seizure during the investigation of a financial crime, (due to the low bar of probable cause), despite an indictment being one or more years away. Without notice, (or at least without discernable notice in many cases), bank accounts, cars with any value, homes with equity or high market value, 401(k)s from either or both spouses, and any other joint marital asset of value, can be taken and held by a court appointed monitor until a finding of guilt, which could be many more years down the road. An innocent spouse can file a claim for her portion of untainted assets as long as it is done in a timely manner, but too many jurisdictions across the country only recognize the innocent spouse owner as a third-party with little to no standing to make the claim. Can you imagine being deemed a THIRD-PARTY to your own assets? In other words, once the government has their grip on the innocent spouse’s legally owned property, it will not let go of if without a costly and bloody fight. The innocent spouse must retain knowledgeable legal counsel (caution - few attorneys understand this area of the law), that will likely end up costing the innocent spouse more than the asset(s) is worth. There is usually little to no legal remedy for the non-offending spouse so those who have not properly planned for a catastrophic financial event are left with no other option than to simply let go of all they have built over many years.

Readers are of course asking themselves what any of this has to do with them and their marital relationship. Unfortunately, it has everything to do with anyone who is married because white-collar criminals are wolves in sheep’s clothing. They are most often loving, charming, family men and women who perform good deeds in their community and are esteemed by their bosses, colleagues, family, and friends. They are church goers, government officials, your long-time doctor, your attorney, etc. Financial fraudsters are everywhere and nobody would ever peg these people as a criminal, least of all, their spouses. This is what makes this population of criminals so dangerous and why married people need to be forewarned and educated about how they own their jointly held marital assets. I wish I could report that white-collar crimes are rare, but they are becoming more prevalent by the day around the globe.

It is a myth that white-collar crimes are seldom prosecuted. Tell that to the throngs of wives who routinely seek my help in navigating the legal and economic nightmare of their husband’s financial fraud that laid their family bare. In fact, thousands of people are arrested and prosecuted every year for state and federal level financial crimes and that number is expected to rise as the Department of Justice is increasingly holding more executives liable for crimes committed by corporations that have in the past, been dealt with as a corporation.

White-collar crime is not only a crime against one’s employer, it is also a crime against one’s self, spouse and children. For this reason, it is imperative that couples who are considering marriage, or who are currently married, take the steps to protect their assets against ANY unforeseen and unimaginable familial/financial betrayal. Most married people do not foresee the need to protect their assets from one another due to the implied implicit trust that goes along with being in a deeply committed relationship because there is nothing romantic about the business end of the marriage contract. The sad fact is that the majority of those who enter into marriage could never imagine the need for such protections. Married people should have no expectation that a spouse would intentionally place their family in financial ruin. But waiting to protect assets until a financial infidelity reaches one’s doorstep is too late because the timing of financial protections is crucial.

Top Five Financial Protections for Married People to Consider:

(Before beginning this section, I want to make clear that federal law and state law both play a role in all aspects of the issues noted below.)

Pre-Marital Agreement - Pre-marital agreements are not just for the rich, but are powerful tools that couples can use to protect and separate assets. A pre-nup can separate one spouse’s debt from another by waving community property. This means that creditors can be limited from collecting from the non owing (non-offending) spouse. Post marital agreements are not advised as they will be heavily scrutinized if conjured after an obligation has been incurred. Instruments that are set up with the goal of defeating a creditor are considered fraudulent conveyances. It is vital to seek knowledgeable legal counsel when setting up a pre-nup!

File Taxes Separately - Each filer takes the standard deduction, or both must itemize their deductions. Everyone’s financial issues are different, but it might not be that much of a sacrifice to gain the benefit of a safety net. An ounce of protection is worth…everything because a financial crime committed by one spouse can leave the innocent spouse with a tax bill that might cost them thousands, if not millions of dollars. The White-Collar Wives Project sees this scenario all too often. Try doing your taxes both ways to see the benefit or loss of benefits for this method. Never sign a tax return blindly without knowing what you are signing, even if prepared by your spouse! Do not allow your spouse to negate or brush off any questions or concerns you may have about a tax-filing. Seek the advice of a tax accountant for more information on filing taxes separately.

Home Ownership - For optimal protection, married couples should own their homes with Tenancy by the Entirety (with rights of survivorship) rather than Tenants in Common. Some states do not automatically recognize TBE so check the laws in your state regarding this type of property ownership, as well as Homestead laws in your state. While the government can attach a lien to the offending spouse’s portion of a home owned by TBE, they cannot force the sale and will not be paid until and unless the home (land) is sold. Most white-collar innocent spouses cannot afford to maintain the family home on one income (or no income) so they sell their home asap and settle that portion of the debt with the government rather than lose it to foreclosure.

Irrevocable Trust - Because irrevocable trusts are managed by a trustee, they are not easily penetrated by outside parties. In other words, one does not control their own irrevocable trust as it is controlled by the trustee. Your residence, other real property, and some other assets are among the most appropriate to consider placing in an irrevocable trust. Also, protection of life insurance policies, cash, savings bonds, non-qualified annuities, qualified retirement plans, or other assets that are eligible for protection against creditors should be sought out. Lest there be any doubt, the government seeking a financial judgement for a white-collar crime is indeed a creditor and they will go to great lengths to get paid. Note - Many people make the mistake of placing their assets in revocable trusts for protection which do not provide a shield against creditors because they are owned and managed by the debtor and considered personal property. There are pros and cons to irrevocable trusts so please seek guidance from a qualified financial planner for more information on asset protection.

Conclusion

Nobody enters into marriage with the idea that one partner will intentionally perform financial harm to the other, but unfortunately, it happens too frequently to ignore. Married couples who take good care of their financial wellbeing does not mean they don’t trust one another. Quite the contrary. It means they care enough to provide peace of mind and protection when and if disaster strikes.

The White-Collar Wives Project has been featured in the New York Times, The American Bar Association Journal, Forbes, Market Watch, Bravo/Oxygen, the ACFE, and numerous esteemed national podcasts

White-Collar Scam Alert!!

Every time I think I’ve heard of every white-collar scheme there is, another one comes across my desk. Before reading further, please be aware that most families of white-collar offenders (especially those who are estranged from the perp) have as much knowledge about the mysterious ways of the prison system as anyone else.

A few days ago a member of my white-collar wives support group reached out to me in a panic after receiving a call from an official from the United States Parole Commission who was reaching out to inform her that her ex-husband was being released in ten days time. The parole officer said that the prison needed to make arrangements for her husband’s placement. Sarah (not her real name) told the caller that she was no longer married to the prisoner and had no desire to take responsibility for him. She did offer to check in with other family members who may be willing to participate in his release. Sarah not only does not want her ex-husband back in her life, but it would not be physically feasible to take him in because the family’s former home has been in foreclosure for sometime, and Sarah and her daughter are currently living with and caring for Sarah’s elderly and ailing mother. The sad truth is that when a head of household betrays their family in such an egregious manner, and is sent to prison for a very long time for their criminal actions, many families are forced to move on and find a way to rebuild their lives to simply survive.

Sarah reached out to me because her ex-husband’s impending release triggered many hurtful emotions for her, and she was also fearful of the risks involved with her 28 year old daughter who immediately stepped up to the plate to take her father in. The daughter was not only willing to take custody of her dad, but was elated that he was being released early. The news of his release was, as it is for many children of incarcerated parents, a dream come true. Sarah’s concern (and mine as well) is that her daughter is only 28 years old and not yet financially stable. Not only would the daughter need to scrape funds together to move herself and her dad into an apartment, but both she and her father would require a co-signer for a rental. Out of the gate, the plan was altruistic, but the perp’s sister agreed to co-sign for the apartment, and also contribute funds to this endeavor.

Delving further into the logistical aspects of this sudden release, Sarah and I were both perplexed not only about the fact that her ex had only spent three years in prison on a 14 year sentence, but that the “probation officer” said that the release was due to Covid. This knowledge triggered further concern. Neither I nor Sarah know much about the BOP, but we know enough to question the early release of someone being placed on parole after only three years on such a long sentence. Also, Sarah’s ex is only 63 years old and in relatively good health, and at this point, Covid is relatively contained and not nearly as deadly as it was a couple of years ago. But this thing was in motion and out of our hands so I asked Sarah to lean on the group as needed (the members of our group are amazing!) and to keep me posted on how this all unfolds in the coming weeks.

After Sarah’s call, I thought about how disturbing and disorienting sudden release is for the family, as well as the perp, and how harrowing it is both emotionally and logistically to put a release plan in place in a short span of time. But the thing that disturbed me the most was Sarah’s daughter’s elation in having her dad home because like so many dealing with the parole and re-entry of a family member, they look no further than the homecoming and do not consider that the joy of a loved one coming home from prison soon gives way to the harsh realities of a parolee’s limitations. (Read my blog about the realities of post prison life for white-collar criminals here The Grim Truth About Post Incarceration.) Add to the mix that at age 28, Sarah’s daughter was just beginning to recover after ten years of trauma. She had had to endure the fallout from her father’s crime which was widespread, her parent’s divorce, and her father’s incarceration. It was not until recently that she was able to pursue her future on more stable footing.

That evening after speaking with Sarah, as I often do, I perused LinkedIn to see what my “circle” was up to. Serendipity came into play when the first post I saw was Walt Pavlo’s update on his work as a staunch advocate for The First Step Act. Walt wrote, “Federal Bureau of Prisons is still having issues fully implementing the First Step Act. While it has made monumental strides since the full program was defined in January 2022, many inmates are staying in prison for longer periods than necessary.” I posted a comment on the thread about Sarah’s husband’s sudden release and that it didn’t seem fair for him, of all people, to be released while others who are more deserving are still waiting. An attorney on the thread immediately replied to me and wrote, “There is no lawful mechanism that would explain someone's release from a 14-year federal sentence after 3 years, Lisa. Did the wife mention where she got this information? It could well be a scam. Someone calls the inmate's family with news of a last-minute early release plan, hurry up and make the plan claiming to be from US Probation, or even from "the parole commission. Oh, and by the way, you have to send money immediately (via Zelle, or Venmo, or CashApp) to cover the cost of electronic monitoring. Family sends money; that's the last anyone ever hears of the bogus release plan." The attorney’s post validated mine and Sarah’s feeling that something wasn’t right about this prisoner’s early release, and I immediately called Sarah back and asked if her daughter had wired any money to the “probation officer” and Sarah told me, “She wired $900.00 to the guy a week ago. He said there was a charge for monitoring parolees. Why are you asking?” My heart sank to it’s deepest depth as I explained that this was a scam. Sarah and I sat in silence over the phone for what seemed like minutes. While she was on the line with me, I googled the United States Parole Commission and the first thing that popped up was notification of this very scam. I told Sarah to contact her local FBI agency, report the scam to the FTC, and to contact Vemo and her bank. Sarah’s daughter will likely never see that cash again, and the perp who scammed her will likely never be found. All we can do is make others aware of this scam so that they can recognize it if it happens to them.

While all white-collar crime schemes have victims, there are no more vulnerable victims of these crimes than the family members of those who perform them. Through no fault of their own, families become injured parties in that they are plunged into economic, legal, emotional, and social peril, and are rightly considered “collateral damage” by the courts. In military terms, collateral damage is the polite term used to describe innocent people that are killed. Lest there be any doubt, white-collar crime routinely triggers the death of the family as these egregious acts are an acute betrayal of familial trust and trigger ruinous consequences for family members in every way possible. Ask any white-collar ex-con and most will confirm this fact. Not only has Sarah’s daughter been scammed out of cash she barely had to free her dad, but also must suffer the loss of losing her father to prison all over again. I fear this egregious fraud induced setback will affect her mental health and general mistrust of society that she has fought hard to regain. It may sound harsh to some, but my hope is that Sarah’s daughter dodged a bullet in taking her father in and placing her young life on hold for his sake, and that after recovering from yet another harsh blow that has shaken her to her core, can now move forward and reach her full potential without this particular burden.

White-collar crimes are acts of pure selfishness and are deadly for perps and their family members. This is why The White-Collar Wives Project webinars series A New Perspective on Deterrence is vital for corporations and business associations because making compliance personal is the key to prevention. This series will soon be available in e-book form as it is the most effective anti-fraud tool on the market. Those who are serious about compliance and occupational crime prevention know that the best training comes from the most knowledgeable experts. If you or your organization are interested in being placed on a pre-order list for the e-book, please contact me at lawlerlisa1@gmail.com. The White-Collar Wives Project webinar series has received rave reviews and we hope to continue to grow our network of savvy corporate partners in our mutual quest to prevent white-collar and corporate crime. Fraud is all around us and gaining more speed with every passing day. It is destroying highly esteemed employees and their family members, and it is a real threat to businesses large and small. As the saying goes, if you’re not part of the solution, you are part of the problem.

The White-Collar Wives Project has been featured in the New York Times, The American Bar Association Journal, Forbes, Market Watch, Bravo/Oxygen, the ACFE, and numerous esteemed national podcasts

Alex Murdaugh: A Closer Look at the Ultimate Cost of White-Collar Crime

The prosecution team in the Alex Murdaugh double murder trial didn’t have a lot of hard evidence to gain a conviction against AM and even appeared to guess at much of what happened the night Maggie and Paul Murdaugh were shot to death, and why. But the chief prosecuting attorney in the case, Creighton Waters, had overwhelming evidence that Alex Murdaugh “had everyone fooled,” leaving members of his family and long-time colleagues feeling as if they never really knew who AM was. As a white-collar innocent spouse advocate this was a vindication of sorts in that the public generally assumes that spouses are complicit in their husband’s crimes, when in fact, the majority of spouses (and children) are actually victims of their spouse’s crimes. After all, the hallmark of any “successful” white-collar criminal is the ability to fool those closest to them (and even themselves) while perpetuating their financial schemes.

Alex Murdaugh is not only a career white-collar criminal, but is now a convicted cold blooded murderer who committed familicide in a psychopathic ploy to cover his criminal tracts. The details that have come to light in the Murdaugh trial have caused some white-collar wives and ex-wives in my private support group to ask me if they need restraining orders against their partner/former partner out of fear for theirs and their children’s physical safety as their own husband’s crimes come to light. During my many years working in the field of domestic violence, assessing lethality was part of my job AFTER previously reported acts of physical or emotional aggression had occurred, but as a white-collar innocent spouse advocate, how can I assess the lethality of “nice guys” who by all appearances are family loving, hard working, and community serving with the exception of being highly manipulative financial scammers? In the nearly ten years of being an innocent spouse advocate I have never heard of a white-collar perp killing anyone but themselves.

The prosecutor referred to AM as a “family annihilator” but that could be said of any white-collar perp with a family because by definition annihilation means to “crush, decimate, demolish, eradicate, liquidate, negate, obliterate, wipe out, and erase.” Ask any white-collar wife or child who is old enough to understand what happened to their lives as a result of a white-collar crime and they would all agree that this event is experienced as the death of the lives they have known at the hands of someone they trusted. While we all know that desperate people can do desperate things, the Murdaugh case begs the question of why Maggie and Paul had to be killed and points to the fact that there is much more to this case than we will likely ever know. Hopefully the Murdaugh case is an aberration rather than a portent of a sea change in how white-collar criminals respond to their impending doom and that murdering one’s family will not become a means to spare the family from the downfall of their reputation, finances, and the end of the lives they spent years building, nor as a measure to protect the perp from their familial fall from grace and the ire of their “loved ones.”

Regarding Murdaugh’s alleged drug addiction, there are plenty of white-collar perps who have substance abuse issues, but Alex Murdaugh’s claim of having a $50,000 dollar a week opioid addiction seems highly unlikely. First, that’s a hell of a lot of opioids and even with a high tolerance, it’s too much for the body to handle, especially over a long period of time, let alone allow Murdaugh to operate as a litigating attorney. Second, with the median price for opioids being $60 per pill, AM would have been taking 119 pills per day (at a cost of $7,140 dollars per day), seven days a week at a cost of $200,000 per month. That adds up to $2.4 million dollars a year! And if this was true, why was his alleged drug dealer, Curtis Allen Smith, living in squalor if he was the middle man selling Murdaugh $200,000 of drugs per month? Even at 10 percent, Smith would have been making $240,000 per year. Over the course of the Murdaugh trial it had come to light that between 2013 and 2021 Smith allegedly received over 400 checks totaling $2.4 million from Murdaugh. Those numbers certainly add up to AM’s account of how much he spent on his opioid addiction annually, but it is a more believable scenario that rather than having a $2.4 million dollar drug addiction, Murdaugh laundered this money through Smith and there is documentation that supports this. It would have been helpful to have Smith as a witness, but neither the prosecution nor the defense felt that he could withstand examination on either end. And what about the other millions of stolen funds that are not accounted for as by all appearances, the Murdaugh family lived within their means. During the murder trial, AM copped to all of his financial misdeeds so rather than going to trial on all 99 cases, he will likely plead guilty and be done with it so the public will never have the opportunity to gain more insight into his financial crimes, nor bring to light others that may have been accomplices in his criminal actions.

As AM’s brother Randy stated, “Even if Alex (Alec) didn’t pull the triggers that shot his wife and son, he knows who did and why.” There is no doubt that families of white-collar criminals suffer in the extreme, but Maggie and Paul Murdaugh paid the ultimate price for AM’s financial crimes and his hidden life, and Alex will spend the rest of his life in prison regretting the choices he made, knowing that none of this ever had to happen. White-collar and corporate crimes will certainly continue as long as society is hell bent on equating financial status as the ultimate measure of success. We must all ask ourselves the same question that prosecutor Creighton Waters posed to AM regarding his lies and deceit… “Where does it end?”

AM got one thing right when he quoted Sir Walter Scott - “Oh, what a tangled web we weave, when first we practice to deceive!"

The White-Collar Wives Project has been featured in the New York Times, The American Bar Association Journal, Forbes, Market Watch, Bravo/Oxygen, the ACFE, and numerous esteemed national podcasts

White-Collar Crime: The Grim Truth About Post Incarceration

Post prison isolation can be as debilitating as being incarcerated

It is astonishing that so many people perform occupational crimes without fully understanding that the consequences of getting caught far outweigh the temporary gains. Easy money isn’t easy. In fact, it’s the hardest cash anyone can come by. The repercussions of an occupational crime are life changing and many who commit them never fully recover.

It is difficult to adjust to a regimented life behind bars with total strangers and fellow convicts, but this controlled environment helps the time go by as rules give purpose to prison life. But from the day a white-collar convict is paroled from prison, the “safety” of a regimented lifestyle (interspersed with hours of downtime) vanishes and is replaced with heavy responsibilities in the outside world. Post prison life is challenging for any ex-con, but release is especially challenging for white-collar criminals because prior to being incarcerated, most lived lives of relative ease and privilege.

In addition to the emotional adjustments of being a white-collar parolee, there are also active issues to deal with. Although no longer physically incarcerated, parolees remain under PO supervision for a period of time. But before heading “home,” most ex-cons are required to transition into a half-way house (Residential Reentry Centers - RRC’s) which are an integral part of the carceral system and are notoriously grim. They are “prison light” but inmates are still under surveillance, must endure onerous restrictions and intense personal scrutiny. Little is known about halfway houses because most are loosely regulated, but an informative examination of the state of RRC’s in the United States is presented in a compelling article in the September 2020 addition of the Prison Policy Initiative -https://www.prisonpolicy.org/blog/2020/09/03/halfway/.

Before being released from the halfway house, an ex-con must have a place to live, be gainfully employed, begin paying restitution and penalties if they haven’t done so already, and often must pay child support. Readjusting to non-institutional life and attempting to rise to the occasion of being a better person while grappling with the ever present acute remorse and humiliation is no easy task. Especially when it comes to reconnecting with remaining family and friends.

Not only are white-collar parolees readjusting to a less regimented lifestyle after being in a fully controlled environment, but many changes have occurred during their incarceration. Family members and friends may or may not be waiting for them upon their release, and for those who do have a joyous welcome, this is usually short lived due to expectations that are often unrealistic. There are a myriad of stressors that come with a life that is now unrecognizable and from this vantage point, it is easy to think that the only positive thing about being released from prison is no longer being behind prison walls.

It is common for post incarceration issues to include depression as everyone has seemingly moved on with their own lives as a matter of coping and necessity. Finances are nil and jobs for ex-convicts are hard to come by and because of this, some ex-con white-collar criminals get into the field of prison coaching or deterrence work. While this has become a valuable endeavor for the white-collar ex-con and those who need to hear their messaging, few make it in that field unless they are well connected, wholly committed to remaining in their ex-con persona, and are in a position to be self-employed. But most ex-convicts end up in low paying menial jobs, or meaningful jobs, (rewarding but with little pay), or if they are lucky, find employment with friends or family members. One of our WCWP member’s ex-husband who is in his late forties has been living with his parents since his release a couple of years ago is is still looking for work. A far cry from living with his wife and children in their suburban home provided by his formerly high paying job of many years. But the comfort of home, family, and community wasn’t enough, as is the case for so many white-collar criminals who suffer from what I call, More Disease, which is contagious and often deadly.

In addition to the uphill battle of finding employment, white-collar ex-cons must also contend with ex-wives that have moved on with new partners, endure child custody issues, or experience fractures with older children who may not be amiable to spending time with their parolee parent due to the trauma that parent caused them and their family. White-collar ex cons also often have few remaining friends to lean on due to a broken bond of trust. In addition to the emotional stresses, there are financial obligations at hand and little to no income to pay for them. Under these circumstances, it is easy for an ex white-collar convict to find themselves more alone on the outside than when they were incarcerated. The adjustments the white-collar ex-con is now facing are not unlike the adjustments the perp’s family members had to make when they lost their partner/father to prison and their home and all life sustaining stability to the government to cover the cost of the perp’s criminal actions. And just as the family had to survive the bomb that went off in their lives that left them destitute and ostracized by their communities due to misplaced guilt by association, the ex-con must also find a way to survive and rebuild their own lives.

It’s a long road for a perp and his family from investigation to re-entry and all totaled, this event can span from three to ten years or more. Sadly, in some cases, children are grown by the time a perp is released from prison, and those formative years can never be recovered. The hard climb out of the deep hole white-collar criminals dig for themselves and their families is ongoing, and none of it ever had to happen because white-collar crimes are acts performed out of greed rather than need. Occupational crimes are not only detrimental to an employer and society but are an egregious dereliction of duty to families because innocent spouses and children do not deserve to lose the lives and community ties they spent years building only to be treated with such utter disregard. Children especially do not deserve to carry the stigma of a parent committing a serious crime and being incarcerated or to be parented from prison, or humiliated by a parent whom they loved and trusted beyond measure. There is nothing more stabilizing than the family unit and when that stability is taken for granted and abused, it is often impossible to regain.

White-collar perps routinely say that they committed their financial crime for their family but this is a serious misconception and also places blame on innocent family members rather than where the blame belongs which is on the shoulders of those who think they deserved or just wanted “more” for themselves. The truth is that families would rather have less of everything than less of their life partner/father. Life post prison is rarely ever the same again for white-collar perps or their family members and while some families are able to reunite, that is the exception rather than the rule. In the end, there is not enough money in the world that can replace one’s family. White-collar ex-cons and their families are always chasing sunrise, because recovery can and often does, take a lifetime.

The White-Collar Wives Project has been assisting families from the onset of the investigative phase of a white-collar crime all the way through to re-entry to help all find their way home. There are no shortcuts along this arduous journey but when each step is carefully planned and executed, and if all parties are willing to stay the course, families can rebuild together, and start again.

The White-Collar Wives Project has been featured in the New York Times, The American Bar Association Journal, Forbes, Market Watch, Bravo/Oxygen, the ACFE, and esteemed national podcasts

Are White-Collar Criminals Sociopaths?

Having studied over a hundred white-collar criminals with an insider’s view for over eight years, I am often asked if those who commit these crimes are sociopaths or psychopaths. Interestingly, this question is most often posed to me directly by the spouses of the perp. I am not a clinician so that question, although valid, would require the professional evaluation of a specialist in a clinical setting. Neither sociopathy or psychopathy are considered clinical terms or disorders, but both are included in the Cluster B category of personality disorders that include antisocial personality disorder, borderline personality disorder, histrionic personality disorder, and narcissistic personality disorder. Regardless of any formal diagnoses it has been established by criminologists that those who commit white-collar crimes have attributes associated with Cluster B disorders, particularly, antisocial personality disorder and narcissistic personality disorder.

Generally, white-collar criminals possess varying degrees of ASPD, namely, a lack of constructive conscience, an abundance of self-assurance, behave in ways that harm others for personal gain, and are high risk tolerant. Given that established description, few would disagree that crimes of pure greed are committed by master manipulators who possess the hallmarks of an antisocial personality disorder.

There is some controversary among the scientific community about whether or not antisocial behavior stems from genetics or from environmental constructs. Some say that sociopaths are made and psychopaths are born, but it is interesting to note that an article in Psychology Today written by Dr. Jean Kim, a surgeon-scientist and Associate Professor of Otolaryngology-Head and Neck Surgery at Johns Hopkins University School of Medicine, stated that “sociopathy is related more to negative socialization from upbringing or unstable social environments.” In my own up close observation of white-collar criminals, all display characteristics of antisocial personality disorder but there is no uniformity regarding nature over nurture. In other words, the situational environment of these perps runs the gambit between having been raised in poverty, great privilege, in a normative nurturing environment, or an unstable environment. Obviously, the question of how and why humans fall into antisocial personality disorder is far more complicated than their formative construct (SES).

While it’s true that most white-collar criminals share anti-social personality traits, it is wise to leave the clinical diagnosis to those who are equipped to make them. But despite the majority of white-collar perps being widely considered as charming, generous, family/community oriented, trustworthy, and excellent at their job, (and most white-collar criminals are indeed all of these things), there is no getting around the fact that there is a serious disconnect between right and wrong for individuals who well know the difference, but choose to rationalize and then perform high risk/high dollar crimes.

In 2005, Harvard Psychologist Martha Stout wrote the book The Sociopath Next Door and posits that as many as 1 in 25 people may be sociopaths. This statistic is alarming because most people think of sociopaths and psychopaths as at the very least being a danger to society and at most, cold blooded killers. The reality is that those afflicted with ASPD fall along a spectrum and most are high functioning members of society who pose no threat to themselves or others. In other words, many people fall along the ASPD spectrum yet they do not perform criminally. It is the level of behaviors associated with ASPD that determine the level of dangerousness. If I had a dollar for every time I’ve heard, “But he’s such a nice guy!” given the over a hundred perps I have had the opportunity to observe, I would have a hundred bucks.

In the 1900’s F. Matthias Alexander was a failed actor but a master in the field of voice control. He was sought after by fellow actors and even some rather well noted historical figures who wanted to have more control over their breath and elocution. Although he had little formal education, Alexander would prove to be a man of great knowledge and would go on to broaden his teachings to develop the Alexander Technique based on his theories of "conscious control, antagonistic action, the unreliability of self-perceptions and sensations, and inhibition and the means whereby." His philosophy on mind and body control would later touch the field of medicine. He wrote several fascinating books, one in particular that delves into how humans can train their thinking to align with their intentions called Constructive Conscious Control of the Individual as a follow-up to his first book, Man’s Supreme Inheritance. His many theories included “the mental and physical deterioration of man; that the unhappiness in the world today (1910) are due to the fact that in meeting the conditions of civilized life, man still reacts instinctively with his gaze concentrated on the "end" to be gained; the means which fails to give conscious consideration to the "means whereby" the end is to be reached; that sensory appreciation is delusive; and that man is dominated in his reactions by subconscious habits or instincts.” Alexander’s philosophy is a good place to start to begin to understand mind over matter in today’s even more complex world, including how those who are seemingly compliant within the world around them can end up behind bars. I prefer this deep dive into the human condition rather than utilizing sociopathy and psychopathy to explain the modern day white-collar criminal.

The mindset of the white-collar criminal is fascinating because it is complex. Most people have various levels of self-awareness regarding some or all of the deficiencies in their health, social, and professional status, and either accept or counteract accordingly. But white-collar criminals are often so thoroughly disconnected from self that they experience an “unreliability of self-perception” which leads to their ruin, and also the ruin of those who are closest to them. After all, the lies we tell ourselves can, and often do, the most damage. The white-collar criminals among us have a seamless ability to appear to be outwardly compliant to the degree that their behavior is compliant up to a point as a means to their end to support their own agenda, yet, much like reptiles blend into their surroundings for protection, or before attacking their prey, you never see a bad actor’s criminal behavior coming because bad actors are notoriously GREAT actors! But in the end, white-collar perps, whether consciously or not, will walk right up to the edge of a thousand foot cliff, tie a knotted rope around themselves and connect it to each of their family members and willingly walk right off of it, putting an end to the lives they and their families have spent a lifetime building. If that isn’t fascinating, I don’t know what is.

For those who are interested in taking a deep dive into the complicated profile of the white-collar criminal, please consider booking my webinar Profiling the White-Collar Criminal: Hiding in Plain Sight which is one of six modules of my New Perspective on Deterrence series. Introduction to the series can be viewed here - A New Perspective on Deterrence

White-Collar Wives Are Finally Winning!!!

“In English common law a married woman is nothing at all. She passes out of legal existence.” – Harriet Beecher Stowe, 1869

Last week I received news that one of the members of The White-Collar Wives Project was finally able to have her name formally removed from over a dozen deed documents after her husband forged her name (along with an unscrupulous notary) without her knowledge. This was not only a big legal triumph for her but also serves as personal redemption toward her regaining her once stellar standing in her community that her husband deliberately destroyed to offset his own guilt. He went to prison for his multiple mortgage frauds yet nobody ever questioned “her” signature, or bothered to tell her that her name was on these fraudulent documents. She would only learn of the forgeries years later when taking a closer look at her ex-husband’s case while she was writing her memoir. Libby Earle Henry detailed these forgeries in her book, The People in My House, and exposed those who took part in that scheme. Her next step is to hold these people legally accountable for performing fraudulently against her and robbing her and her daughter of their good names. Why weren’t these forgeries brought up to Libby during the investigation or prosecution of her husband and his co-conspirators? Another example of the wife being the last to know.

I awoke this morning to more good news from another long-time member of The White-Collar Wives Project who shared with me that she received word yesterday that she has prevailed in her grueling years long legal battle in an asset seizure and forfeiture settlement with the government. The asset seizure and forfeiture occurred years ago as a result of her then husband’s white-collar crime. As a joint owner of the marital estate, the government cited that she had no standing to lay claim to her legally owned marital assets, even after she presented her marriage certificate to the court in a last ditch effort to express her standing. She worked for a government office for thirty years, raised children, and like all other innocent spouses who lose everything due to their husband’s financial crime, her only wrong move proved to be that she didn’t go to work with her husband daily to make sure he was on the right side of the law, but rather trusted her legal partner implicitly. The settlement is under wraps for now because the government doesn’t like losing to the milk cow in the yard, but the law is the law and the law finally prevailed in this hard won battle. Heaven forbid word gets out that the majority of white-collar wives are neither accomplices in their husband’s crime nor low hanging fruit for jurisdictional financial gain, but rather women with agency who will not hesitate to fight for their (and in turn, their children’s) legal rights and property.

Innocent spouses and children are not only victims of a spouse’s/father’s egregious familial betrayal of trust, they are also victims of courts that too often negate an innocent spouse’s right to their legally held joint marital assets and their right to due process to lay claim to those assets. That a an accused criminal has more legal rights than an innocent spouse is not only unjust, but unethical. I asked an attorney years ago how the government can continue to get away with negating an innocent spouse’s right to due process after civil asset seizure and he replied, “because so far, nobody has effectively challenged them.” While his response was repulsive, it was nonetheless validating.

With so many white-collar innocent spouses coming forward and standing up for themselves, (thanks to the White-Collar Wives Project there is safety in numbers), this fight is just beginning. Either marital property laws need to be enforced and or changed, or marriage needs to be abolished entirely. Innocent spouses (and children) are indeed victims of their white-collar fraudster husband’s, and they should not be forced to get to the back of the line to file for restitution along with other victims to lay claim to their own property. Wife is not a four letter word or a synonym for stupid, hen, chattel, or “the little lady.” We are not living under Old English Law and coverture, but some courts have not received that message. Those who commit financial crimes receive their due punishment, as they should, and as should anyone associated with their crimes, but innocent spouses and children should not suffer and be punished for those same crimes simply through the instrument of marriage or birth. Femme covert is a thing of the past. Courts, take note.

Common law/case law has it's place, but as a matter of what is right and fair, precedent too often promotes a lack of flexibility when confronted with the realities of this modern world, and results in a static body of law. Also, that one jurisdiction can interpret clear law differently than another in the same jurisdiction begs the question of judicial bias. But that is a battle for another day.

The White-Collar Wives Project continues to fight for the long established but routinely negated legal rights of innocent spouses (and children) who become entangled in their husband’s criminal punishment. Archaic laws and decisions regarding the marital property rights of wives have no place in the twenty-first century. I can cite too many cases where the women of The White-Collar Wives Project have been treated by the courts as if we are living strictly under Old English law from two hundred years ago. Harriet Beecher Stowe was right when she said, “A married woman is nothing at all. She passes out of legal existence."

Life Under Coverture - Coverture was well established under English Common Law for several centuries and was defined as, “the inclusion of a woman in the legal person of her husband upon marriage under common law.” Under coverture, married women did not have the legal capacity to hold their own property or contract on their own behalf and this common law was inherited by many other common law jurisdictions, including the United States. This legal doctrine held that a married woman's legal existence was considered to be merged with that of her husband so that she had no independent legal existence of her own. Upon marriage, coverture provided that a woman became a feme covert, whose legal rights and obligations were mostly subsumed by those of her husband. An unmarried woman, or feme sole, had the right to own property and make contracts in her own name.

Wives and The Bible - Ephesians 5:22-25 Wives, submit yourselves to your own husbands as you do to the Lord. For the husband is the head of the wife as Christ is the head of the church, his body, of which he is the Savior. Now as the church submits to Christ, so also wives should submit to their husbands in everything.

Wife and Old English - Woman derives from the Old English word wifman, from the roots wif (with) and man. A woman (wifman) was a "wife-person." Man was the generic word for human being. Though of course there was no word meaning "husband-person."

The Married Women’s Property Act of 1839

Established the rights of women to enjoy the profits of their labor, to control real and personal property, to be parties to lawsuits and contracts, and to execute wills on their own behalf.

Married Women’s Property Act of 1964

It provides that, in the absence of any agreement between the spouses to the contrary, money derived from any allowance made by a husband for the expenses of the matrimonial home or for similar purposes and any property acquired out of such money shall be treated as belonging to the husband and wife in equal shares.

The White-Collar Wives Project has been featured in the New York Times, The American Bar Association Journal, Forbes, Market Watch, Bravo/Oxygen, the ACFE, and esteemed national podcasts.

Profiling the White-Collar Criminal: Hiding in Plain Sight

White-collar criminals share many characteristics but their two dominating traits are that they are high risk tolerant and have an extraordinary ability to blend into their environment. This is because they don’t wear their criminal intentions openly (physically, professionally, socially, or even within their family) which makes them nearly impossible to detect.

Most people tend to think of criminals as thugs who reside in a negative social environment, talk tough, live on the fringe of society, run with the “wrong” crowd, are unapproachable, wear sloppy attire, and are people to steer clear of. But white-collar criminals can think and act like a neurotypical person which gives them the ability to blend well in polite society. They are highly approachable, family and community oriented, are excellent at their job, and most people unknowingly hangout with these criminals on a regular basis. Hiding in plain sight is what makes white-collar criminals so dangerous.

Because most white-collar crimes are committed by those with socio-economic privilege, in many cases, even perps don’t see themselves as criminally minded. This is because not only can they easily manipulate others, but due to compartmentalizing their ethics they develop low functioning internal controls which also leads to self-manipulation that results in skewed rationalizations. Along those lines, unlike the hardened criminal, most people (including perps) don’t see white-collar criminals as being threatening to them or to others (unless they themselves were victims of the crime) and are more shocked by the behavior than the crime itself.

There have been many books, white-papers, and academic dissertations on the behavior analysis of white-collar criminals and the motivations behind their actions. Although these studies are a valid endeavor, they are obviously based on interviews of perps who have previously committed a white-collar crime and ended up in prison, rather than those who only have intent. In other words, a perp who has been (or is) incarcerated for performing an occupational crime and suffered the dire consequences has insights on their behavior that are very different than those who have only contemplated a crime. While the data compiled for these studies gives us some insights into the white-collar criminal, they provide no worthwhile data that would prevent these crimes from occurring.

As a white-collar innocent spouse advocate, over the past eight years I have interviewed over two hundred white-collar innocent spouses from around the globe which has provided me with a front row seat behind the scenes of as many occupational crimes, many of which have made national and global headlines. Between a billion-dollar civil judgement and a $250,000 mortgage scam, I’ve seen it all. The sad fact is that I am so accustomed to dealing with cases into the millions of dollars (and all of the horrific issues that high-dollar financial crimes bring), that when wives contact me about crimes that are under $100,000, it’s a walk in the park to guide them through it. But regardless of the dollar amount, my unique vantage point into the inner workings of white-collar criminals is through the lens of those who trusted the men behind these crimes the most, and goes far beyond the sensational headlines that these crimes generate.

For those who are interested in taking a deeper look into the inner workings of the white-collar criminal, the WCWP offers a 45 minute webinar titled Profiling the White-Collar Criminal which is part of a first of its kind six module anti-fraud course titled A New Perspective on Deterrence. This course can be presented in its entirety or as stand alone 45 minute webinars. The Introduction to the course is available upon request. Please contact Lisa Lawler at lawlerlisa1@gmail.com or visit thewhitecollarwivesproject.org for more information.

Corporate Crime and Executive Compensation Clawbacks

I recently attended a WWCDA (Women’s White-Collar Defense Association) webinar on corporate asset forfeiture which was part of a four-part Global Enforcement Trends & Compliance Best Practices Series. The panel featured DOJ officials, corporate defense attorneys, and other experts affiliated with antitrust, securities fraud, corruption, export enforcement, and asset forfeiture actions. This panel wasn’t messing around with their messaging that the powers that be are fed up with corporate malfeasance and that companies need to up their compliance game.

One of the major topics discussed was Asst. AG, Lisa Monaco’s mandate that moving forward, the trend toward fewer DPAs (Deferred Prosecution Agreements) for corporations, and more accountability toward company officers will escalate. With that comes pushing executive compensation clawbacks to help enforce company culture, and to deter/punish risky and or criminal behavior by top executives. In other words, while a company’s willingness to enforce compliance policies could continue to lessen the legal peril of a corporation, it will not deter the DOJ from bringing criminal charges against employees or from mandating that companies perform compensation clawbacks for officers of a company, even if they cannot be proven to be culpable. Is this an unfair stance? Welcome to being in the company of the white-collar innocent spouse who is routinely held financially accountable for their spouse’s financial crime despite not having any culpability! Punitive damages toward innocent parties takes guilt by association to a new level, and with more individuals being held accountable for corporate crimes, more innocent families than ever will be caught in the wide net of white-collar criminal prosecution, and through no fault of their own, will face dire economic and emotional peril in these processes.

Because marriage is a legally binding contract, the financial crime of one spouse severely impacts the other. It is a little-known fact that all marital assets are at risk of being seized (including untainted assets) at the onset of a white-collar investigation and held by a court appointed monitor for forfeiture to be dispensed for restitution and other penalties associated with a perp’s criminal actions at sentencing. These civil seizures are performed without due process for the innocent spouse joint asset owner and leaves a perp’s family destitute. Additionally, the non-offending spouse is held liable for unreported taxes on ill-gotten gains (which were also not reported to the non-offending spouse) when filing jointly with an offending spouse. Clawbacks for innocent spouses have been performed routinely through the years and nobody bats an eye. Yet, those in the corporate arena will take notice now that similar actions are considered unfair and financially punitive to non-offending company officers.

While discussing the current climate of compliance programming, one of the panelists shared the alarming fact that according to the DOJ, 90% of corporations either do not have a compliance program at all, or do not have effective compliance programming in place. Is it any wonder then why occupational crime continues to escalate? The key to more effective compliance is not a better defense through tech, but a more results driven approach to deterrence that focuses on the human experience. The DOJ has lamented the profound gap between tech and human interaction regarding compliance programming and companies are beginning to see the value in this approach. The White-Collar Wives Project has created a comprehensive novel compliance strategy that is based on a behind the scenes, up close and personal study of over two hundred white-collar criminal investigations and prosecutions. A New Perspective on Deterrence is the missing link to effective compliance programming. For more information please contact Lisa Lawler at lawlerlisa1@gmail.com.

Grassroots activism has been impacting society for centuries by changing the social dynamics that pose a significant threat to the quality of life. Occupational crimes not only pose a significant threat to companies, but also, to families. The White-Collar Wives Project represents white-collar innocent spouses from around the world who, along with their children, have had to endure severe far reaching, long-lasting, and highly punitive legal and economic repercussions as a result of their spouse’s occupational crime. Lest there be any doubt, we are not little ladies with a cause, but highly vested compliance stakeholders who are at war with occupational crime.

The White-Collar Wives Project has been featured in the New York Times, The American Bar Association Journal, Forbes, Market Watch, Bravo/Oxygen, the AFCE, and esteemed national podcasts.

The White-Collar Wives Project: Big Changes Coming in the New Year

It’s a New Year and with it comes big changes for The White-Collar Wives Project. Since its inception in 2016, the WCWP has been making medicine out of poison by providing strategic guidance and support to wives and adult children who are caught in the ruinous economic, legal, and emotional fallout of a spouse’s/parent’s white-collar criminal investigation, prosecution, and incarceration. White-collar crimes are not only an egregious breach of familial trust and duty, but family members often have to make the difficult decision to file charges against their spouse/parent for forged credit documents so they don’t have to absorb the enormous cost of paying for crimes performed against them, (this occurs more often than you think), and numerous other illegal acts performed by perps against unsuspecting family members. One of our founding WCWP members learned that her name was forged on more than a dozen mortgage documents and is now working with an attorney to have her name removed from those deeds, and is suing those involved.

Last year the WCWP began performing live webinars to professional associations on occupational crime deterrence, providing content that is as shocking as it is vital to companies large and small. The response to these webinars has been overwhelmingly positive and attendees have raved:

“Fascinating! I had no idea about the aftermath for families. You usually only hear about what happens to the accused”

“Good subject. Very informative

“Ms. Lawler was amazing. She is extremely knowledgeable…and that’s been hard earned. She has a lot to offer fraud examiners and attorneys”

“I wish the session could have been longer, mainly because the speaker was really interesting”

This feedback has been much appreciated as our efforts are genuinely motivated by the continued stream of urgent calls from innocent spouses who along with their children are suffering the brutal consequences from the fallout of occupational financial malfeasance.

The mission of the WCWP is to keep families safe and solvent. Our goal is occupational crime prevention through education. Toward that end, our six part series A New Perspective on Deterrence introduces External Deterrence Theory (ED) which was developed by the WCWP to replace standard General and Specific Deterrence Theory because obviously, fear of capture and punishment has little to no effect on bad actors. ED heightens the risks for would be perps considerably and goes far beyond capture and punishment. This series includes topics about the high risk of suicide among perps, takes a deep dive into profiling the white-collar criminal, the dangers of compartmentalized ethics, taxes on embezzled funds, the living nightmare of investigation, prosecution, incarceration, the harshness of re-entry, and so much more. This content is based on a years long study of over a hundred perps and their family members. It is a wild but worthwhile ride to the dark side and nothing like it has ever been presented before. It is our hope that this proprietary knowledge will become universally known because most anti-fraud programming is akin to having a finger shaken in your face, but A New Perspective on Deterrence anti-fraud series is a virtual trip to hell. By the time it’s over, you’ll never want to go there.

Because the public is not privy to what goes on behind the scenes of white-collar investigations, prosecutions, incarceration, and beyond, there is a pressing need for employees across all sectors to gain an understanding about the little known far reaching and long-lasting torrent of dire consequences that perps and their unsuspecting family members must endure as a result of a white-collar crime. Toward that end, the WCWP is now formally stepping into the corporate compliance space because too many organizations give too little attention to EFFECTIVE anti-fraud programming. As many of you know, (and I will keep repeating this serious warning until the message is fully received), the DOJ will be holding more executives accountable for corporate malfeasance, especially if the company has an ineffective compliance program or worse, none at all (according to the DOJ, 90% of companies have no compliance programming in place!). Bringing this new approach to deterrence into the corporate arena is a bold move on our part, and is especially bold because this series takes Occam’s Razor (Rule of Simplicity) to a new level in view of the fact that the answer to the compliance problem cannot be found within the mandates of company culture, internal controls, or perfectly executed software programming. Although these are all integral components of a compliance program, educating employees about how and why occupational crimes occur and highlighting the path of destruction these crimes generate for perps, and in turn, those closets to them, makes compliance personal. Making compliance personal is the answer to the compliance problem!

Corporations spend millions of dollars on compliance software and rely upon that software to streamline dissemination of (and adherence to) legal and professional standards for their industry/jurisdictions as well as to deliver internal company mandates. These systems usually include employee training tools, incident reporting, data collection for leadership to monitor the progress and effectiveness of their compliance programming, (have all employees viewed and checked a box?), internal auditing, etc. But there is no software program that can PREVENT intentional occupational malfeasance which is a big part of why protective procedures are put in place to begin with. Corporate leadership continues to begrudge spending millions of dollars on compliance programming to appease external auditors/regulators and to keep their company (and executives) safe from a few rogue employees who can and do cause enormous financial losses for corporations as well as considerable harm to a company’s/industry’s reputation. With the DOJ keeping a watchful eye out, compliance programs with “insurance policies” that do not have effective anti-fraud protection, leave themselves exposed to prosecution.

This series is presented via live webinars or to management in a roundtable setting. If your company is looking for FULL PROTECTION against occupational crime and would like to be on the cutting edge of becoming part of the solution to the compliance problem, please contact Lisa Lawler at lawlerlisa1@gmail.com or click on our Webinar page on this website for more information.

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Grassroots activism has been impacting society for centuries by changing the social dynamics that pose a significant threat to the quality of life. Occupational crimes not only pose a significant threat to companies, but also, to families. The White-Collar Wives Project represents over 200 (and counting) white-collar innocent spouses from around the world who, along with their children, have had to endure severe far reaching, long-lasting, and highly punitive legal and economic repercussions as a result of their spouse’s occupational felonious actions. Lest there be any doubt, we are not little ladies with a cause, but highly vested frontline compliance stakeholders who are at war with occupational crime.

The White-Collar Wives Project has been featured in the New York Times, The American Bar Association Journal, Forbes, Market Watch, Bravo/Oxygen, the AFCE, and many esteemed national podcasts.

White-Collar Criminal Defense Attorneys and the Innocent Spouse

Because most white-collar cases result in plea deals, the white-collar criminal defense attorney has one job, and that is to obtain the shortest sentence possible for their client who has pled guilty. When presenting their client for sentencing, attorneys prefer that their client’s non-offending spouse and children stand by their client as they believe this will play well before a judge. While it’s nice to have family support for the white-collar perp, sentences are based on recommended guidelines for the crime, the dollar amount, who was affected by the crime, prior offenses, whether or not a perp cooperated, and the level of remorse the perp has for committing the crime. Note here that most judges can easily see the difference between regretful posturing and real remorse. Lest there be any doubt, at the end of the day, perps do not get lesser sentences because they have a family standing by them.

The White-Collar Wives Project has mentored over two hundred white-collar families and not once did a judge consider familial ties in their sentencing decisions. We have seen cases where there are disabled children involved and how the burden of having one parent incarcerated would severely affect the level of care for those children. We have seen many cases where the extreme financial hardships of having one spouse incarcerated is ruinous for the family financially, yet this is not a consideration for judges. When it comes to sentencing, do the crime, do the time.

White-collar criminal defense attorneys are right to try to do what is best for their client because that is what they are paid to do. But most white-collar criminal defense attorneys have no knowledge of the sacrifices innocent spouses make to stand by their criminal spouse. Marriage is a legally binding contract that creates joint ownership of assets and debts. When a financial crime is committed, restitution plus penalties are attributed to the perp and any ill gotten gains must be returned or repaid. This is where things get messy. If the ill-gotten gains have been comingled into the marital estate, then marital assets are at risk of being seized by the government to go toward a perp’s debt. But in many cases, the ill-gotten gains are not comingled within the marital estate, but nonetheless, the entirety of the marital estate is seized for restitution and penalties. Legally, the government can only seize assets that are owned by the perp. In other words, half of the marital estate, and the non-offending spouse retains their legally owned share of untainted marital assets. But in too many jurisdictions the entirety of the marital estate is seized and the non-offending spouse is suddenly deemed as a third party to their legally owned portion of untainted assets! The innocent spouse has committed no crime, had no knowledge of a crime, and is not under indictment. To make matters worse, it is next to impossible for a non-offending spouse to regain their legal portion of the marital estate once the government has seized them because many jurisdictions deny the innocent spouse “standing” in laying claim to THEIR LEGALLY OWNED ASSETS. This is what brings so many innocent spouses to The White-Collar Wives Project.

Another overlooked risk to the non-offending spouse are the tax debts the innocent spouse incurs on ill-gotten income because those funds are taxed as income. The unsuspecting non-offending spouse who files taxes jointly with a white-collar perp are liable for those taxes despite having no knowledge that the income was illegal, and in most cases, no knowledge of the income at all because perps usually do not claim their ill gotten funds on tax returns. Perps usually explain windfalls in any number of ways that do not raise red flags to their spouse, and most innocent spouses have implicit trust that their tax returns are legitimately prepared by their spouse, or by a professional who has been supplied income information from the perp, and simply sign them. Blind trust and taxes is a subject for another blog on another day. To add insult to injury, tax entities will not even consider Innocent Spouse Relief unless the non-offending spouse has divorced their offending spouse.

Fortunately, there are some white-collar criminal defense attorneys who agree with the White-Collar Wives Project’s stance on the need for innocent spouses to protect themselves by stepping away from their offending spouse as early as possible. These attorneys understand the risks non-offending spouses take when they stand by their perp spouse. If you are a white-collar criminal defense attorney, please understand that your obligation to your client should not be at the peril of family members who have already suffered an egregious famiial betrayal of epic proportions.

For more information on protecting the innocent spouse and this “new area of the law”, please contact Lisa Lawler at lawlerlisa1@gmail.com.

The Trump Organization: Was it Reactive or Proactive Financial Planning?

In white-collar criminal cases, the investigation phase can be the most vulnerable time for a target’s assets due to civil asset seizure. It is a routine matter for the government to freeze property during this phase because the seizure is based only on probable cause rather than a finding of guilt. Civil seizures are performed so assets cannot be liquidated or transferred before a pending formal accusation or final judgement. The idiom, “timing is everything,” plays a crucial role in determining if a transferring of assets is simply good financial planning or…a fraudulent conveyance.

Financial planning often includes placing some or all assets under a protective umbrella as part of a proactive plan to protect assets in the event that there is a future claim against them. But when assets are transferred or restructured within the time period of an anticipated legal action with the purpose to delay or defraud imminent creditors, it is not difficult to make the assumption that this is an attempt at fraudulent conveyance.

Transferring assets fraudulently is a crime. An honest civil or criminal defense attorney would likely never advise this action when there is an imminent formal accusation against a target where a court judgement is anticipated. Lest there be any doubt, there is a huge difference between legal asset protection for financial planning and fraudulent conveyance.

Placing assets in offshore accounts is a popular and routine measure of sound financial planning for future financial security and to protect assets against potential future claims. The reason this is so appealing is that most offshore jurisdictions do not recognize foreign judgements. Also, pursuing a case for fraudulent conveyance in offshore locals is difficult because the burden of proof falls on the shoulders of the creditor who must travel to that jurisdiction to prove the claim that the transfer was a result of a target’s intent to defraud. This is both time consuming and expensive.

But one doesn’t have to travel to exotic locals to seek a safe financial haven because….Delaware. The state of Delaware is where over 60% of Fortune 500 companies and other domestic and foreign LLCs are incorporated and these include Amazon, Google, Tesla, Walmart, American Express and Disney. Despite this tiny state having only 1 million residents, it has nearly two million registered corporations that garners a quarter of the state’s general fund revenue. But why Delaware? Arguably, the main reason is because it is an “on-shore” tax haven due to the “Delaware Loophole” which essentially enables companies to avoid paying state corporate income tax no matter where the income is earned. Another reason Delaware is attractive for incorporation is because it has a “special court” called the Court of Chancery. This court rules solely on corporate law disputes and does so without juries, and because the judges who sit on this court specialize in corporate law, there is a plethora of judicial precedent which allows for swift and fair adjudication. Finally, Delaware does not require disclosure of who owns the incorporated business, so this provides a “cloak of cover” for those who desire it. Financial Times reporter Hal Weitzman wrote an excellent book about Delaware’s business boom called, What’s the Matter with Delaware? that explores this “tiny state’s massive role in global financial secrecy.”

This brings us to Trump’s recent forming of a new entity, “Trump Organization II LLC", which is seeking incorporation in Delaware and is essentially a restructuring of the original Trump Organization which is incorporated in the state of New York.. According to multiple sources, Trump already has over 300 companies incorporated in Delaware but this recent major shift to create a new entity is curious because it was done the same day that New York AG, Letitia James, filed a $250 million dollar civil suit against the Trump Organization for “numerous acts of fraud and misrepresentations.” James is taking steps to block the formation of the new LLC so that no assets from the original company can be transferred from New York to Delaware so that there will be funds available to satisfy any disgorgement from the Trump Organization if the AG prevails in the suit against it. If successful in blocking what appears to be a transfer of assets, the AG will place those assets with an independent monitor that would oversee that the Trump Organization is in compliance and that “any new financial disclosures to banks and insurers contain all supporting and relevant material.”

As always, my blogs circles back to the matter at hand and that is the white-collar innocent spouse. Aside from the fact that a lone bad actor’s financial crime is an egregious breach of familial financial trust and a crime against one’s family, as previously stated, these crimes routinely trigger civil asset seizure during the investigative phase so that assets are on hand for restitution and other penalties during sentencing. But too often, rather than seizing only the marital assets belonging to the target, the government takes ALL of the marital assets without acknowledging the non-offending spouse’s joint ownership of the marital estate. Instead, the non-offending innocent spouse is suddenly deemed a third-party to their LEGAL portion of untainted marital assets. Through no fault of their own, innocent spouses and children are often left penniless, without a roof over their heads, shamed, and without due process to protect untainted assets to survive on. To be victimized by a spouse and then again by the government causes families to suffer acute harm from the fallout of an occupational crime.

It is not uncommon for my innocent spouse clients to tell me that their husband wants to transfer all assets into the innocent spouse’s name to protect jointly held assets to protect the innocent spouse and children, and I answer that query with an emphatic no and go on to explain why this is a bad idea that will only make matters worse. These questions are not asked in an attempt to break the law, they are asked because the average person assumes this is a safe and legal move. Civil asset seizure has it’s place, but that place should never include the taking of a non-target’s assets, and especially where no due process is given.

In the Trump Organization’s case, it will be interesting to see how transferring assets from an old business to a new business in Delaware plays out during an ongoing investigation.

The High Cost of Compliance

Corporations spend millions of dollars on compliance programming, but clearly, malfeasance remains deeply entrenched in both private and public business sectors. Understandably, companies are frustrated with the increasingly high cost of mandated compliance training programming, especially due to their lack of efficacy. Despite this, corporations continue to invest thousands and even millions of dollars on detective and prescriptive compliance software because they are afraid of the liability exposures if they don’t. But it’s not enough to simply have software in place to detect or correct fraud because when it comes to the FSG, (Federal Sentencing Guidelines), corporations must be able to show that their programming has efficacy.

No compliance program can be effective without a human component that engages employees and provides them with good reasons to keeps them on the path of compliance. Sadly, too many companies believe that software alone, and or, an employee’s checking of a box to confirm their understanding of company policies is enough to keep the company safe from bad actors, or in compliance with state and federal regulatory agencies. A static compliance program is not only not an effective deterrence strategy, but also leaves companies exposed to in-house fraudsters who can cost them thousands, if not millions of dollars in lost revenue, and hard won reputational value.

The WCWP has developed a new approach to deterrence which will be a game changer for compliance training. This new application is not only guaranteed to drive employee engagement, but is also highly affordable for any size business. Regulatory agencies are not impressed by how much a corporation spends on compliance programming, but rather, how EFFECTIVE that programming is.

Business as Usual Gets a New Coat of Paint

Marketplaces, both local and global, have grown exponentially over the last thirty years and as new players enter the market,  the slice of the sales pie has become smaller and smaller.   While competition is a good thing,  too much competition can easily cause personal and corporate ethics to fly the coop.  In other words,  the demand to keep ahead of the competition can result in unethical and often, downright fraudulent business practices.  When business as usual becomes fraught with non-compliance it’s time to revisit not only corporate culture, but what’s missing in the compliance programming. Static programming is no friend to corporations as the DOJ is cracking down on programs that cannot demonstrate efficacy. The White-Collar Wives Project is introducing a new approach to compliance which will be revealed in the coming weeks. This one’s a game changer!

Speaking of change, this is something that does not always come easily in the corporate world, especially when it comes to accountability. Executives can no longer hide behind “business as usual” when DPAs (Deferred Prosecution Agreements) and NPAs (Non-Prosecution Agreements) are being replaced with individual accountability. In other words, both executives and non-executives within a company who even marginally helped to facilitate non-compliance and or fraud,  whether intentionally or not, will be thoroughly investigated and if warranted, prosecuted. Holding individuals accountable is a giant step toward upholding deterrence as collecting fines and hand slapping  corporations is about a useless as swatting at ravenous misquotes.  It’s about time.

The last few years have been all about whistleblowing, but time will tell if this type of “policing” will make it’s way up the ladder. Hopefully the threat of individual liability will push companies further toward compliance, and away from the cookie jar.  

White-Collar Crime and Taxes

Money is often tight around tax time, and while we all have to pay our fair share, in these times of high inflation this burden is more financially "taxing" than ever. But imagine if you not only had to pay your own fair share of taxes, but also owed taxes on income you had no knowledge of. Something most people don't think about (and why should they) is that cash, and other assets gained through fraud is considered taxable income, even if you didn't know it existed.

Just as the financial fraudster doesn't report ill-gotten gains on their taxes, they also do not report these nefarious gains to their spouse. This means that there are no red flags at tax time, or at any other time for that matter. In fact, perps often present financial gains to their spouses and friends in any number of ways such as an occupational windfall in the form of a raise, new client(s), an inheritance, a loan, stock split, and other plausible explanations. An unsuspecting spouse assumes those funds would be reported in tax filings, but in many households where couples file jointly, one spouse will prepare the tax paperwork, and the non-preparer signs the document, just as they always have. One could argue whether or not the blind signing of such an important document without pouring over it is an oversight. But where is the need for oversight when there is implicit trust? In most cases a spouse isn't even aware that a financial crime has been committed until agents come knocking at the door. One simply assumes that the "filer" reported the joint income properly.

Currently, the only safety net the government provides for the innocent spouse is under the Internal Revenue Code (IRC) §6013(d)(3). If relief is granted there is no further action taken. If relief is not granted, the innocent spouse is subject to joint and several liability for the income tax that went unreported. Gaining full abatement is no easy task because the innocent party must prove they had no knowledge of the illegal funds. But how can one prove no knowledge of something they knew nothing about? Fortunately, during my own experience, because I pushed back, and because there was a paper trial that proved I had no knowledge, I was granted full relief. It was no easy task and it took six months for me to get out from under that nightmare. Sadly, I know of too many wives that have not been afforded relief and are now carrying the heavy financial burden of paying taxes into the hundreds of thousands of dollars. Not because they were guilty of any crime, but because they didn't know they could file for relief, didn't understand the difference between a hardship "deal" and full abatement, or simply because the government agent assigned to their case just negated their standing. This subject is addressed further in one of my previous blogs, and in my book, The White-Collar Wives Survival Guide. (A newly revised PDF edition is available via email at lawlerlisa1@gmail.com).

Here is where the rubber meets the road however, because by creating relief for the innocent spouse with the Internal Revenue Code, the government recognizes that a marital partner who commits fraud exposes their innocent spouse to unjust legal and economic punitive actions that deserve remedy. So why then, does the government routinely negate an innocent spouse's constitutional right to due process and legal standing when it comes to protecting these crime victims against in rem civil seizures and administrative forfeiture? It makes no sense whatsoever to uphold one legal protection for an innocent spouse, and along those same lines, negate another avenue of relief.

You Think You Know Someone … Until They Commit a Crime

Let’s say a crooked financial advisor approaches his/her mark and promises unrealistic returns on a investment. Thinking it’s too good to be true, the mark overrides critical thinking and dives right into the deal because the adviser appears to be on the up and up, and the mark trusts that the cash will come rolling into his/her bank account. While knowingly committing fraud, the financial advisor accepts the money and rather than investing a dime of it, places it in a bogus account and never invests the funds. When the mark begins to have questions down the road like, “Hey, what happened to my money?” or reads about the financial adviser’s arrest in the newspaper, he/she realizes they have been scammed. But how could he/she not know that the advisor had no intention of investing the money, and every intention of pocketing it for himself? Because he/she was made to feel that their was trust in the relationship. The advisor had a good reputation, was likeable, a family guy, active in his community, seemingly successful, and would give anyone the shirt off his back. Everybody was shocked when this great guy was arrested and sent to prison. Jeez, you think you know someone. (Too many of these types of incidents to list here)

Let’s say a small municipality learned after an audit that their bookkeeper, who had been employed as the town comptroller for twenty years, was found to have embezzled $53 million dollars over that time period, but flew under the radar because there had never been any reason to question her loyalty to the town or her accounting practices because the books always looked tip top and she was friendly and great at her job.

Before the comptroller was caught with her hand in the cookie jar, money had become extraordinarily scarce and the budget required laying off city workers, including slashing police budgets which left the town at risk. But nobody ever bothered to look at why money was drying up and they would only learn of the embezzlement after the comptroller was sent on a reluctant and long overdue vacation. She was of course arrested and later indicted. Everyone was shocked to learn about her double life; one as a mousey bookkeeper, and one as a flashy bedazzled and well known quarter horse breeder who had spent millions on her own folly. How could the city have missed $53 million dollars and the fact that the mousey bookkeeper was a well known horse breeder??? Jeez, you think you know someone. (Rita Cromwell’s story can be seen in the documentary “All the Queens Horses.)

Let’s say your family doctor, a stellar NYC practitioner with a highly respected reputation in the medical community, and whom who have relied upon for years to keep you and your neighbors alive, has just been indicted for receiving kickbacks from a pharma manufacturing company for pushing pills that are full of fentanyl. With each script, the good doctor pocketed cash and patients were shocked. Not only was the doctor indicted, but the entire pharma company was shut down and the CEO went to prison along with the doctor. By the way, the good doctor not only pushed street level pills, but one of his patients mistakenly overdosed and died. Jeez, you think you know somebody. (Gordan Freedman)

I could list a thousand other cases like these that produced as many victims. My point here is that it’s rare to spot a fraudster who by all appearances flies under the radar, no matter how much you have trusted that person in the past, even if it was FOR YEARS. After all, aren’t relationships made up of both personal verification and implicit trust? The truth is, fraudsters aren’t easy to spot because their cover is impeccable. Victims are duped for so long because they think they know who they are dealing with and because the person they trusted gave no evidence of being anything other than trustworthy.

Everyone feels terrible for victims of financial fraud. So why then, does the public see the spouse of a financial perp as an accomplice rather than a victim? Just as a fraudster gives no evidence of being a crook to their boss, coworkers or clients, they also give no indication of their nefarious dealings to their spouse. In the majority of cases, the innocent spouse doesn’t learn a crime has been committed unless and until a formal investigation is evident. In fact, innocent spouses are more shocked than anyone when they learn of his/her spouse’s financial fraud. This is the person they slept with, had children with, and trusted with their lives.

Innocent spouses and children are at the top of the list of stakeholders who are grossly affected by the dire fallout of occupational crimes. They are not only victims of a grave breach of familial and financial trust, they are also victims of a corrupt legal system’s lack of due process, and or, standing, when it comes to the inevitable civil asset seizure and forfeiture of an innocent spouse’s legal untainted portion of the marital estate. Even perps receive due process. “But she enjoyed the fruits of her perp husband’s crime, so she’s just as guilty!” This point of view may seem worthy from the outside, but as I have repeated time and again, perps don’t park their windfalls in the family bank account. And if they do, they always give a legitimate reason. After all, they’re good guys. Right?