Judge allowed fraud to obtain allimony and now condones income tax evasion......

[fredandshanon]

What is the name of your state (only U.S. law)? GA
Hi... new here and in need of some advice. This is a long story, but will try to condense to pertinent info.....

My fiance's divorce was final March '02 (after a very nasty 2 year fight, mostly over ex-wife's astronomical demands for $5k +++ monthly support) At the time, he made $100K, she said she was unemployed, and even filed several sworn affidavits and other documents stating same. Ultimately, child support was ordered at 28.5% of his gross ($2,375 for three kids)... Alimony was set on a sliding scale to "give her a chance to get back into the workplace" (paid monthly) - $500 for three months, $1000 for three months, $1500 for one year, $1000 for two years, and $500 for five years - settlement agreement states alimony not modifyable..
Shortly after divorce husband lost $100k job, finally found new job but didn't make $100K... arrears accumulated quickly as the support was WAY more than what he could pay and still be able to live (in a one bedroom apartment). Yes, I know he should have petitioned to modify then but we knew the support guidelines were going to be changed shortly.... didn't want to get stuck with the original guidelines for two more years to wait to modify.
Fast forward to March 2007, new guidelines enacted we prepared a case and filed pro se for modification.... he was making $70K, and she was an exclusive caterer at an event facility (very busy) we didn't know exactly how much she was making just that she was working now and wasn't then. Through discovery, we found that she had actually been making quite a nice living... several years she deposited well over $100k, and one year she even deposited $160K.... YET on her tax returns she claimed an adjusted income of $10k.... some years she claimed even less!
We ended up having to hire an atty but being on a very tight budget, we had to go with a what I now call a "budget attorney" - you really do get what you pay for. I have a paralegal certificate, and understood to a degree how to research and help with the case accordingly. The case was sent to ADR twice... and just like the divorce she would not settle, not budge an inch and even demanded that no modification be granted.... Case drug on, we requested an emergency temp hearing for temp relief as the arrears continued to pile up... At the temp hearing we had a substitute judge. She heard both sides and was even amazed at the amount of money that was being deposited and pointed out that it was very hard to believe that there were 90% expenses???? (I smell TAX EVASION) She told the substitue court that she only made $800 per month...??????? (interesting tid bit of info - in March she had just leased a brand new SAAB SUV loaded to the hilt MSRP of $37K- her car payment as stated by her is $499 per month)
Under oath, her attorney actually asked her if the alimony and child support were agreed upon based solely on the fact that she was not working...... SHE SAID YES under oath and on record. We shelled out the $300 to get the transcript.
The deeper we dug into her discovery the more questions arose as to exactly when she actually began this catering job.. (she had catered some while they were married). Our attorney was hesitant to file motion on fraud until "we had a smoking gun"... in May 2008 we found "the gun" and the modification motion was amended to include fraud and sought to have all alimony arrears dismissed and that all alimony paid was to be reimbursed plus interest. This would have cleared up all arrearages for the child support - if we had not been forced to pay the fraudulent alimony there would have been more than enough to keep current on the child support even with the lower income************** From May until Feb this year we have been unable to get on the judges calandar (mostly due to her atty's conflicts). Finally we went to court yesterday.... Our atty started right off to delve into the fraud, by calling her to testify... he was trying to get her to continue to purjur herself. Remember we had a budget atty... he was flustered and apparently nervous.... and apparently he annoyed the judge who suddenly decided that she would supply the other side with a defense of "Statute of Repose" stating that the time to bring action on the fraud had expired and then offered ex-wife's atty a recess to go to her chambers to use her resources to find the case law..... Of course the other side came back with something.. which our budget attorney said apparently applied to real estate. Either way, judge decided that she would not hear any of the fraud... she didn't care. She directed both parties to try again to settle the matter in her chambers. No surprise... ex-wife would not budge, would not settle on one dime even though her atty actually urged her to take the deal..... Argument took soooo long that judge continued hearing to today.
Last night I searched high and low for a response to the judges gift of repose for the other side..... I really felt that I had found it, even had several examples of case law for the atty to quote. Statutes that tolled the limitations of fraud - since repose can't be tolled, the mere existance of fraud opened the defense of equitable estoppel which would quash their statute of repose defense************** PERFECT!!! We faxed it to him this morning.... so he could review and decide if it would work. He said yes it was just what we needed, and that he would gather some more case law examples to quote**************.
We called our witness to please come back to court today and off we went...
Our atty opened up with the information that I found. The other side began to hem and haw.... and the judge was getting visibly annoyed then asked for the cases to support... budget atty started citing cases he found from the 1970's... ????? Eventually he rambled around to the info that I found but by then the judge was really annoyed. She took 5 minutes and then came back and said she would up hold her decision from yesterday..... Our fraud case would not be heard**************.... we could only address the modification. Case proceeded.... budget atty fumbled his way through, while ex's atty pounded us.... twisted every little thing way out of context.
periodically budget atty leaned back and asked me if he forgot anything???? I was able to remind him that vital information was entered into evidence at the temp hearing that he could use now since his attempts to enter additional financial info on ex-wife were quashed by her atty due to procedural errors on budget atty's part. He was able to point out to the court that in 2006 she banked $159,000 but claimed she only made $10K on her taxes, and that in 2004 she banked $81,000 and claimed $12K - also to point out her earlier testimony that she was in such desperate need of financial assistance that year due to not receiving the entire amount of support that she was awarded every month that she had to go to a local Catholic church for assistance in paying her mortgage (of $1200 a month) not just for 2004 but all the way through 2007 (remember the $160K deposit?)

The one good thing budget atty was able to achieve was to have our fraud evidence at least proffered (?) - basis was read into record, and our witness was allowed to testify that ex-wife was brought on as exclusive caterer prior to the divorce being final (for almost two years before the final decree) and that she averaged 35-40 parties a year at an average of $4,000 per party
At this point, the judge cut off the testimony and asked if ex-wife's att would like to cross examine... asking when witness met ex-wife, and when he met ex-husband.... nothing shocking Then he called ex-wife for response.....
asked her if what our witness said was true and to tell the court when she began the catering job ?!?!?!?!?! Of course she maintained her story that she never worked anywhere until two months after the divorce was final..... (another tid bit of info; that same month she leased a 2007 Buick Rendezvous fully loaded, and she bought a house that same month for $175K apparently with no work history and only making "$800" a month WINK WINK

Judge calls recess**************... upon return we had to go through opening/closing statements.... where ex-wife requests that in the event full payments are not made every month (now to the sheriff's office) ex-husband will be arrested until such time as he can make full payment to purge.?!?!?!?!

Good news...... judge lowered child support to $1200

Bad news...... judge upheld all alimony, all arrears (ex-wife's version of course), tacked on some bogus medical bills, $12K for a credit card that is in collections because we can't afford to pay it because all the money goes to her for support......and to top it all off she awarded atty's fees to ex-wife of $10K with the added bonus of jail time should any payments be short or late
His monthly payment will now be $3,200 per month - more than the original support obligation that we couldn't meet back then which is why we went for modification in the first place - this will leave him with $400 a month to live on after all required support/punitive payments are made**************

Not one mention nor even acknowledgment of the VERY questionable behavior and financial dealings of ex-wife.... in fact she was even joking with her on the stand ?!?!?!?

What do we do now???? Appeal? Is there even a slim chance in hell that we could prevail??? Where do we go from here? Any suggestions advice etc would be greatly appreciated**************What is the name of your state (only U.S. law)?

[LdiJ]

Originally Posted by fredandshanon

Ultimately, child support was ordered at 28.5% of his gross ($2,375 for three kids)... Alimony was set on a sliding scale to "give her a chance to get back into the workplace" (paid monthly) - $500 for three months, $1000 for three months, $1500 for one year, $1000 for two years, and $500 for five years - settlement agreement states alimony not modifyable..

The child support was a normal amount for three children, and an agreement that says that alimony is not modifiable, generally means that its not modifiable.

he was making $70K, and she was an exclusive caterer at an event facility (very busy) we didn't know exactly how much she was making just that she was working now and wasn't then. Through discovery, we found that she had actually been making quite a nice living... several years she deposited well over $100k, and one year she even deposited $160K.... YET on her tax returns she claimed an adjusted income of $10k.... some years she claimed even less!

At the temp hearing we had a substitute judge. She heard both sides and was even amazed at the amount of money that was being deposited and pointed out that it was very hard to believe that there were 90% expenses???? (I smell TAX EVASION)

As an accountant and a tax professional I can tell you that a 10% profit on a business is not at all unusual.

in May 2008 we found "the gun" and the modification motion was amended to include fraud and sought to have all alimony arrears dismissed and that all alimony paid was to be reimbursed plus interest.

I have no idea where you were going with the whole fraud issue. He agreed to non-modifiable alimony, so where was the fraud?

Either way, judge decided that she would not hear any of the fraud... she didn't care. She directed both parties to try again to settle the matter in her chambers. No surprise... ex-wife would not budge, would not settle on one dime even though her atty actually urged her to take the deal.....

I am not surprised that the judge refused to hear the "fraud", because I still don't see where there was basis for fraud. I am also not surprised that she refused to budge, because once again, he agreed to non-modifiable alimony.

He was able to point out to the court that in 2006 she banked $159,000 but claimed she only made $10K on her taxes, and that in 2004 she banked $81,000 and claimed $12K - also to point out her earlier testimony that she was in such desperate need of financial assistance that year due to not receiving the entire amount of support that she was awarded every month that she had to go to a local Catholic church for assistance in paying her mortgage (of $1200 a month) not just for 2004 but all the way through 2007 (remember the $160K deposit?)

Again, and I will repeat this over and over...as an accountant and a tax professional I will tell you that there is absolutely nothing unusual about her profit margins, particularly in anything to do with food service. Profit margins are LOW in food service.

Good news...... judge lowered child support to $1200

He lucked out, 1200.00 is pretty low when someone has a 70k income and three children.

Bad news...... judge upheld all alimony, all arrears (ex-wife's version of course), tacked on some bogus medical bills, $12K for a credit card that is in collections because we can't afford to pay it because all the money goes to her for support......and to top it all off she awarded atty's fees to ex-wife of $10K with the added bonus of jail time should any payments be short or late
His monthly payment will now be $3,200 per month - more than the original support obligation that we couldn't meet back then which is why we went for modification in the first place - this will leave him with $400 a month to live on after all required support/punitive payments are made**************

Hey...again I am not surprised, he agree to NON-MODIFIABLE alimony.

Not one mention nor even acknowledgment of the VERY questionable behavior and financial dealings of ex-wife.... in fact she was even joking with her on the stand ?!?!?!?

He didn't prove his case...I could see that and I wasn't there. Yes, she bought a house and a car, but she had a property settlement at the time of the divorce that likely contributed to the house, and her income plus the child support and alimony would likely have qualified her to finance the house and the car lease and then another car lease.

He hung his hat on "fraud"...which makes no sense to me since the alimony was non-modifiable...and on the fact that her business deposited large sums of money but only showed about a 10% profit, which again is extremely NORMAL in the food service industry.

What do we do now???? Appeal? Is there even a slim chance in hell that we could prevail??? Where do we go from here? Any suggestions advice etc would be greatly appreciated**************What is the name of your state (only U.S. law)?

An appeal can only prevail if it can be proven that the judge made an error of law. Appeals are also extremely expensive. I don't see how the judge made an error of law.

He owes 10k for her attorney fees, some medical bills and alimony and child support arrearages.

How much are the alimony arrearages? How much are the child support arrearages? How long does he have to pay 3200.00 a month? I may have some suggestions as to how to arrange his finances to make things more workable.

[stealth2]

And really... there is nothing "we" can do. "We" are not at all legally involved. "We" are not married. In fact, it seems as though "we" are a little too heavily involved in this whole situation. OP likely hurt Dad's case more than either of them realize - sometimes a little knowledge is a very dangerous thing.

[LdiJ]

Originally Posted by stealth2

And really... there is nothing "we" can do. "We" are not at all legally involved. "We" are not married. In fact, it seems as though "we" are a little too heavily involved in this whole situation. OP likely hurt Dad's case more than either of them realize - sometimes a little knowledge is a very dangerous thing.

I don't disagree at all. I think she pushed him into mounting a case that maybe should never have gone to court...or perhaps should have been handled very differently than it was handled.

[stealth2]

Originally Posted by LdiJ

I don't disagree at all. I think she pushed him into mounting a case that maybe should never have gone to court...or perhaps should have been handled very differently than it was handled.

Yep.

And OP - PLEASE don't come back and tell us that we don't understand how it is. Really - we do. Much better than you think.

[fredandshanon]

The fraud issue is there... In Sept 2000, one month after the couple separated she started a catering business. Throughout the divorce proceedings (that went from Sept 2000 to March 2002) she continued to claim that she did not have a job and had absolutely NO INCOME. Dispite continued requests for her to produce her financial records etc. she never did, even after a Motion to Compel was filed with the court for same! During this time period she did file numerous documents - including several Sworn Notorized financial affidavits that stated she had no job and that she had $0 income. As a result, ex-husband having exhausted all finances, including all monies from the couples retirement account (with appproval from the judge) had to agree to the settlement as there was no more money to fight her insanity any longer. She announced that she deserved at least $10,000 a month because that's what some of her other divorced friends were getting in support.

Alimony is typically granted to the spouse who has limited means/no immediate means of supporting them selves.... right? Specifically for the purpose of allowing them time to "get on their feet".
Therefore she had a job making money, lied to the court and said she made $0 money - Even told them she needed the alimony to pursue a real estate license. When in reality she did have a job and was making money - she just wanted MORE money!

Court and ex-husband relied on her statements of no job and agreed to alimony in 2002. Cpirt did not allow the exorbitant amount she wanted but did allow an amont that was very generous (over $100k when all is said and done). Unfortunately, her attorney would not settle without the statement of non-modifyable alimony so it was included. Here is the fraud, she did have a job for two years before the divorce was final. Three days prior to the final hearing she filed yet another sworn affidavit that stated she still was not working and had $0 income. And yes, the child support was within the guidelines and was normal at that point in the game - this issue was never disputed.

As for purchasing home and luxury car 2 months after final decree - She did not get a huge lump of money at the divorce. She got all the furniture and the $12,000 that was left. That's it, that's all that was left for her to take. Do financial institutions give financing to people with no proof of income? At that time she could only show income of $2,875 per month (court ordered support payments) - of which $1,200 would go to the mortgage and $500 to a car lease.... that leaves $1,200 to pay all utilities, buy groceries, and to support three children and herself (who by the way wear nothing but designer clothing)

As to the profit margin in the food industry.... YOU ARE WAY OFF! I myself am in the food industry. The catering business as a whole is a VERY PROFITABLE business! There is an incredible profit margin in food - especially when there is little to NO OVERHEAD! This woman caters weddings, parties, etc... all from her own basement. She has no license for catering, nor does she have a permit from the county health department to prepare food for public consumption in her home (all of which she admitted in court). In addition, she has admitted to having 25+ employees - of which, she paid wages to in the amount of $16,000 in 2006 according to her tax return. Keep in mind, these employee's are paid for two to three hours a weekend... they don't have a 40 hour position with her so this is all very part time work.

Her 2006 tax retun listed her gross income as $63,000. By the time she listed her deductions (and yes there can be a lot of deductions for a self employed person not disputing that) her adjusted income was listed at $10,000. HOWEVER, there is an additional $70,000 (not couting monies received for support) that she deposited for the year that are unaccounted for and were not reported. Where did this money come from?In the event that it really is acceptable to deposit $160,000 in one year (only $30,000 was from alimony/child support), and then to claim that it took $130,000 to make an actual $10,000 for the year, I will be very shocked and will definately use her accountant to do my taxes.....

"We" are involved because "we" are part of this new family and "we" are having to pick up the financial shortfalls that exist because of this huge mess.

[Blue Meanie]

"We" are involved because "we" are part of this new family and "we" are having to pick up the financial shortfalls that exist because of this huge mess.

You are not LEGALLY a family UNTIL you are married. If you don't like picking up the slack financially, then get out of this relationship. Period. The legalities are NONE of your concern and your over-involvement are creating a HUGE legal mess for your boyfriend.

He AGREED to this decree. Period. What the ex is making is irrelevant. There is NO FRAUD. Not liking the judgment is not grounds for an appeal.

And even IF you end up married to this man the situation is STILL NONE OF YOUR BUSINESS...LEGALLY!

I understand both sides. However, if the ex-wife is making $12,000 per month and getting an additional $3,200 from ex-husband totaling $15,200 where is the justice? If he only brings home $1,000 per week and is left with only $800 per month to live on. I also understand that the dad is very involved in his kid’s activities and is, by no means, a dead-beat-dad. Didn’t the judge make a judgment that makes living impossible for him?

Is there perhaps, a federal law that protects his human rights in this case? Is he being punished for all the dead-beat dads in the country when he in fact is not one?

[Blue Meanie]

Originally Posted by fl505

I understand both sides. However, if the ex-wife is making $12,000 per month and getting an additional $3,200 from ex-husband totaling $15,200 where is the justice? If he only brings home $1,000 per week and is left with only $800 per month to live on. I also understand that the dad is very involved in his kid’s activities and is, by no means, a dead-beat-dad. Didn’t the judge make a judgment that makes living impossible for him?

Is there perhaps, a federal law that protects his human rights in this case? Is he being punished for all the dead-beat dads in the country when he in fact is not one?

Do you read? Did you read the 1st post??? What is hard to understand about this situation??

THE MAN AGREED TO THIS! THERE IS NO FRAUD. END OF FLIPPING STORY!

I understand that he agreed in 2002. However, things have changed in both financial situations. I was simply asking if it’s fair that he gives her all but $800 of his monthly income and she is making $15,000 per month. This puts him in a no-win situation and will not be able to make it. Is this fair? Is it fair that she said she wasn’t working in 2002, under oath, when in fact she was making a lot of money? A lie is a lie anyway we look at it. What now happens to the children without a dad in their lives if he goes to jail? Fairness and lies to the court were overlooked by the judge.

My question is simply, is there a federal law that protects his rights. This is America......

[Blue Meanie]

Originally Posted by fl505

I understand that he agreed in 2002. However, things have changed in both financial situations. I was simply asking if it’s fair that he gives her all but $800 of his monthly income and she is making $15,000 per month. This puts him in a no-win situation and will not be able to make it. Is this fair? Is it fair that she said she wasn’t working in 2002, under oath, when in fact she was making a lot of money? A lie is a lie anyway we look at it. What now happens to the children without a dad in their lives if he goes to jail? Fairness and lies to the court were overlooked by the judge.

My question is simply, is there a federal law that protects his rights. This is America......

Yes it is fair. No there is a "federal law". Yes this IS America and the man had the right at his divorce hearing to NOT agree to a NON-MODIFIABLE settlement.

You didn't address her lies under oath**************She sais she had NO INCOME.....When in fact she was making a lot of money.....What do you call that?

[Blue Meanie]

Originally Posted by fl505

You didn't address her lies under oath**************She sais she had NO INCOME.....When in fact she was making a lot of money.....What do you call that?

Please do not sign up under a different user name to promote your over-involved, no legal basis, idiotic ramblings, Shannon.

My name is Frank and I am a neutral party. You still never answered my questions about her lying under oath. Is it far that the ex-wife was awarded a very large sum of money because she said she had no income when in fact she was making $12,000 per month? If she hadn’t lied, maybe the ex-husband would not be in this situation.

You are obviously a scorned woman and I FEEL SORRY FOR YOU IN THAT YOU DO NOT THINK ABOUT THE TRUTH AND THE CHILDREN IN THIS MATTER. She lied which in turn got her a lot of money......during such a time she was making $12,000 per month.

[Ohiogal]

Originally Posted by fl505

My name is Frank and I am a neutral party. You still never answered my questions about her lying under oath. Is it far that the ex-wife was awarded a very large sum of money because she said she had no income when in fact she was making $12,000 per month? If she hadn’t lied, maybe the ex-husband would not be in this situation.

You are obviously a scorned woman and I FEEL SORRY FOR YOU IN THAT YOU DO NOT THINK ABOUT THE TRUTH AND THE CHILDREN IN THIS MATTER. She lied which in turn got her a lot of money......during such a time she was making $12,000 per month.

Oh get over yourself. Frank, let me be frank. NO ONE proved that she lied under oath. She could have had a business and NO INCOME. That is extremely possible. Because many businesses operate in the red for the first year or so. The fact that dad didn't fight the issue THEN is HIS fault. No one else's. If he thought she was lying THEN, he should have fought it THEN. Not seven years later. He never should have agreed to nonmodifiable alimony. That was HIS stupidity. Sorry but you are wrong. OP is wrong. And the judge is correct in his ruling based on what has been presented.

So says this ATTORNEY.