Possible fraud from the transactions and agreements with my wife?

[javlon]

What is the name of your state (only U.S. law)? Florida

I and my wife have a joint checking account which is “joint with right of survivorship”.

I have a personal savings account.

Due to some special situation, which I cannot explain in this forum, we made a written and oral agreement as follows:

I can transfer money (some or all) from our joint checking account to my personal savings account at anytime.

Whenever my wife requests, I should transfer back the requested amount of money back from my savings to our joint checking.

I should not spend any money from my savings and I should not move the money from my savings to anywhere else except to our joint cheking. Also, I should not keep any other money in my savings except the money that was transferred from our joint checking. In other words, the one and only source for my savings account is our joint checking account. We can spend money, for our normal living expenses, from this joint checking account.

Either of us can end this agreement at anytime and whenever we (or anyone of us) wish. Once we decide to end this agreement then I have to move all the money from my savings to our joint checking.

While this arrangement was going on smoothly, after around 5 years, I faced a lawsuit from another guy and that law suit has nothing to do with the money (or transfer of money between me and my wife) I am talking about.

While the lawsuit was going on, I was transferring money between my personal savings and our joint checking accounts several times. Finally, almost a year after the lawsuit was filed, I transferred all the money from my personal savings to our joint checking account and it was 60K and then closed my personal savings account. There was another 10K in our joint checking already. Then we made a written loan agreement. Based on that agreement, my wife moved all that 70K (60K + 10k) money from our joint checking to her personal checking account (to get treatment for her father’s illness) and then we closed our joint checking account. After that, in around two year time, she paid me back 35K (half of that 70K) and I deposited those payment checks into my personal checking and then we spent that money for our normal living expenses (e.g., to buy groceries, paying utility bills, etc) and for my medical treatment (I have been facing a life threatening medical condition). I am still defending the lawsuit (which has been progressing very slow) and it is now approaching an end.

Recently, someone warned me about possible Florida fraudulent transfers (chapter 726) and Florida statutes of fraud (chapter 725) (due to the agreements and money transfers that I made with my wife) if I lost the case. I never heard them before. I read those statutes and also read a case law that was recommended by that person: BROWNING v. POIRIER, 165 So.3d 663 (2015). It seems to me that the money transfers and agreements that I made with my wife (explained earlier) do not violate any law. Also it seems to me that spending of money (either from our joint checking account or from my recent personal checking account) for our normal living expenses or for my treatments is acceptable. However, I am not quite sure if I violated any statutes of fraud or fraudulent transfers, etc.

Please, kindly provide your advice. I am happy to provide any additional details.

 

[LdiJ]

What is the name of your state (only U.S. law)? Florida

I and my wife have a joint checking account which is “joint with right of survivorship”.

I have a personal savings account.

Due to some special situation, which I cannot explain in this forum, we made a written and oral agreement as follows:

*I can transfer money (some or all) from our joint checking account to my personal savings account at anytime.

Whenever my wife requests, I should transfer back the requested amount of money back from my savings to our joint checking.

I should not spend any money from my savings and I should not move the money from my savings to anywhere else except to our joint cheking. Also, I should not keep any other money in my savings except the money that was transferred from our joint checking. In other words, the one and only source for my savings account is our joint checking account. We can spend money, for our normal living expenses, from this joint checking account.

Either of us can end this agreement at anytime and whenever we (or anyone of us) wish. Once we decide to end this agreement then I have to move all the money from my savings to our joint checking.

While this arrangement was going on smoothly, after around 5 years, I faced a lawsuit from another guy and that law suit has nothing to do with the money (or transfer of money between me and my wife) I am talking about.

While the lawsuit was going on, I was transferring money between my personal savings and our joint checking accounts several times. Finally, almost a year after the lawsuit was filed, I transferred all the money from my personal savings to our joint checking account and it was 60K and then closed my personal savings account. There was another 10K in our joint checking already. Then we made a written loan agreement. Based on that agreement, my wife moved all that 70K (60K + 10k) money from our joint checking to her personal checking account (to get treatment for her father’s illness) and then we closed our joint checking account. After that, in around two year time, she paid me back 35K (half of that 70K) and I deposited those payment checks into my personal checking and then we spent that money for our normal living expenses (e.g., to buy groceries, paying utility bills, etc) and for my medical treatment (I have been facing a life threatening medical condition). I am still defending the lawsuit (which has been progressing very slow) and it is now approaching an end.

Recently, someone warned me about possible Florida fraudulent transfers (chapter 726) and Florida statutes of fraud (chapter 725) (due to the agreements and money transfers that I made with my wife) if I lost the case. I never heard them before. I read those statutes and also read a case law that was recommended by that person: BROWNING v. POIRIER, 165 So.3d 663 (2015). It seems to me that the money transfers and agreements that I made with my wife (explained earlier) do not violate any law. Also it seems to me that spending of money (either from our joint checking account or from my recent personal checking account) for our normal living expenses or for my treatments is acceptable. However, I am not quite sure if I violated any statutes of fraud or fraudulent transfers, etc.

Please, kindly provide your advice. I am happy to provide any additional details.

You moved money around, back and forth. You did it more than people normally would so that could look a little suspicious, but you also moved a significant amount of money back to your own personal account during that period as well, so that counteracts it a bit.

If you are required to explain anything, I would personally leave out that whole first bit about you and your wife's agreements. It just looks a bit odd. Just explain that you were using your savings account for your marital savings, but that you would move it back to your joint account when needed for other purposes. The rest of your explanation was more logical.

 

[javlon]

Thank you for your insightful comments. I follow your advice.

For additional information purposes, we were running our family primarily on my salary; and my wife was earning very little (now we both live mostly on social security). All our earnings were directly deposited into our joint checking account. I was moving money from the joint checking to my savings because, in my savings account was generating some good interest on the money. However there was no interest generated from our joint checking account. All these are evident from the copies of our bank records. The rule of the game in the transfers (between my own personal savings account and our joint checking count) was simple: leave a little amount of money in the joint checking and move the rest to the savings account. Whenever we need to spend money then move back that money (only the required amount) to the joint checking.

In addition, my wife’s father was taken to an Asian country (where the medical treatment is relatively inexpensive) and my wife also accompanied him. We still have the copies of flight tickets, stamps/entries in the passports, a letter from that Asian country’s hospital about the treatment as evidence. That was the reason why we moved 70K to my wife’s own personal account from our joint checking. In fact, the hospital in that Asian country asked me to prove that I have enough funds in my bank account prior to starting the treatment to my father. I submitted the copies of my bank records to the hospital. Once they were satisfied with that 70K, they agreed to do the treatment and then we travelled to that Asian country within few months after that. After the treatment, my wife’s father paid her back the money in 5 to 6 installments over two years span, totaling 35K and my wife wrote me 6 checks over two years span, totaling 35K and I deposited those checks in my own personal account (and it was spent, as I explained in my earlier posting). We have copies of the bank records of these checks, etc.

Is it a good idea to provide all these details to the court if I lost the case and was accused of fraud with these money transfers?

 

[LdiJ]

Thank you for your insightful comments. I follow your advice.

For additional information purposes, we were running our family primarily on my salary; and my wife was earning very little (now we both live mostly on social security). All our earnings were directly deposited into our joint checking account. I was moving money from the joint checking to my savings because, in my savings account was generating some good interest on the money. However there was no interest generated from our joint checking account. All these are evident from the copies of our bank records. The rule of the game in the transfers (between my own personal savings account and our joint checking count) was simple: leave a little amount of money in the joint checking and move the rest to the savings account. Whenever we need to spend money then move back that money (only the required amount) to the joint checking.

In addition, my wife’s father was taken to an Asian country (where the medical treatment is relatively inexpensive) and my wife also accompanied him. We still have the copies of flight tickets, stamps/entries in the passports, a letter from that Asian country’s hospital about the treatment as evidence. That was the reason why we moved 70K to my wife’s own personal account from our joint checking. In fact, the hospital in that Asian country asked me to prove that I have enough funds in my bank account prior to starting the treatment to my father. I submitted the copies of my bank records to the hospital. Once they were satisfied with that 70K, they agreed to do the treatment and then we travelled to that Asian country within few months after that. After the treatment, my wife’s father paid her back the money in 5 to 6 installments over two years span, totaling 35K and my wife wrote me 6 checks over two years span, totaling 35K and I deposited those checks in my own personal account (and it was spent, as I explained in my earlier posting). We have copies of the bank records of these checks, etc.

Is it a good idea to provide all these details to the court if I lost the case and was accused of fraud with these money transfers?

You can provide that information if necessary.

 

[Taxing Matters]

Please, kindly provide your advice. I am happy to provide any additional details.

You have a potential problem. The issue here is whether the person suing you can reach that money that you have been moving around if it gets a judgment against you. Pretty much every state has a fraudulent conveyance statute, including Florida. Note that while it is called a fraudulent conveyance, there does not have to be any actual fraud involved and fraudulent conveyance does not mean you have broken any laws. Rather, fraudulent conveyance laws are about reversing transfers that are made by debtors to escape paying their debts by making transfers either for little or no consideration (e.g. gifts) or by engaging in other acts with the intent to evade their creditors. As you might expect, the law frowns on debtors giving their assets to their relatives and friends to benefit them while short changing people they owe.

Whether your transfers might trigger a fraudulent conveyance problem is impossible to tell without analyzing the details of the account as well as the details of your debts, including the lawsuit that was filed against you. Given the kind of money involved, $60k+, you really need to have a lawyer look this over and advise you. If the money is not yet at risk you don’t want to end up making more transfers that might put it at risk.

And I have to ask an obvious question: why didn't you just set up a second joint interest bearing account to put the money into until it was needed to pay bills? That would have been the better solution here and is what most people would have done. Your arrangement is unusual and the explanation about doing it to earn interest is not convincing to me. And I doubt it would be convincing to a court either. I suspect something more was going on here than you are willing to tell us because you could have easily achieved your stated goal without the need for that odd agreement with your wife.

 

[javlon]

Thank you all for for your insightful comments.

The joint checking account (“joint checking 1&#8221 and my personal savings account (“my personal savings 1&#8221, between which the transfers took place, are no longer existing and, in fact, they were closed long back, once my wife took 70K from “joint checking 1” to her own personal account (for her father’s treatment).
After that, my wife returned me back 35K over two years time. I opened a personal checking (“my personal checking 1&#8221 account on my name alone, and I deposited all her checks (totaling 35K) in “my personal checking 1”, and that money was spent for our living expenses (groceries, etc) and for my treatment (we have bills and payment checks to prove this clearly). The most recent check (part of that 35K) she gave me was almost a month ago and I deposited it also in “my personal checking 1”. We spent all the money in “my personal checking 1” for my treatment and for our living expenses. “my personal checking 1” is also closed after that (almost a month ago).

Once we closed “joint checking 1” and “my personal savings 1”, we both opened a new joint checking account (“joint checking 2&#8221 where we are getting some interest too, and started putting our earnings (no more money transfers to/from) in “joint checking 2”only. Our earnings are barely enough to support our normal living expenses and my treatment therefore, our “joint checking 2” has no more than 1-2 thousands at any time. Now we have no other accounts (jointly or individually) except “joint checking 2”

Summary and concerns:

(1). Whether the transfers (that took place long back) between “joint checking 1” and “my personal savings 1” will be treated as fraudulent transfers? (Please note that “joint checking 1” and “my personal savings 1” were created several years prior to this lawsuit and frequent transfers had been taking place between those accounts and this process continued until after a year the lawsuit was filed. Except these two accounts, we both did not have any other account (either individually or jointly) until my wife’s father was sick). We had an agreement for this.

(2). Finally, once my wife’s father was sick, based on another agreement, I moved all the money from “my personal savings 1” to “joint checking 1”. then my wife moved 70K from “joint checking 1” to her own (and newly created) account for her father’s treatment (then there was no more money left over in ”joint checking 1” and/or “my personal savings 1” and these two accounts were closed soon after that). However, my wife paid me back 35K (which is exactly half the amount she took from our “joint checking 1&#8221 from her personal account on her name alone, to “my personal checking 1” (“my personal checking 1” was opened after closing “my personal savings 1” and “joint checking 1&#8221 and we spent that money for our living expenses and for my treatment. The most recent check (part of that 35K) she gave me was almost a month ago. Once we completely spent the money from “my personal checking 1”, I closed “my personal checking 1” as well. In other words, the exclusive purpose of “my personal checking 1” was to receive the payments (totaling 35K) from my wife. Is this enough to prove that my wife does not owe me anything (and therefore there are/were no fraudulent transfer to my wife, regarding that 70K)?

(3). As a sideline story, and to explain "Taxing Matters", once the ”Joint checking 1” and “my personal savings 1” are closed, we opened “joint checking 2” and all our earnings are getting deposited into that account only. We are not moving any money to/out of that “joint checking 2” (except for our living/treatment purposes). I am not concerned about “fraud” or fraudulent transfer associated with “joint checking 2”. Therefore, I am not requesting any information about “joint checking 2”. Now we do not have any account (individually or joint) except “joint checking 2”

 

[latigo]

What is the name of your state (only U.S. law)? Florida

I and my wife have a joint checking account which is “joint with right of survivorship”.

I have a personal savings account.

Due to some special situation, which I cannot explain in this forum, we made a written and oral agreement as follows:

I can transfer money (some or all) from our joint checking account to my personal savings account at anytime.

Whenever my wife requests, I should transfer back the requested amount of money back from my savings to our joint checking.

I should not spend any money from my savings and I should not move the money from my savings to anywhere else except to our joint cheking. Also, I should not keep any other money in my savings except the money that was transferred from our joint checking. In other words, the one and only source for my savings account is our joint checking account. We can spend money, for our normal living expenses, from this joint checking account.

Either of us can end this agreement at anytime and whenever we (or anyone of us) wish. Once we decide to end this agreement then I have to move all the money from my savings to our joint checking.

While this arrangement was going on smoothly, after around 5 years, I faced a lawsuit from another guy and that law suit has nothing to do with the money (or transfer of money between me and my wife) I am talking about.

While the lawsuit was going on, I was transferring money between my personal savings and our joint checking accounts several times. Finally, almost a year after the lawsuit was filed, I transferred all the money from my personal savings to our joint checking account and it was 60K and then closed my personal savings account. There was another 10K in our joint checking already. Then we made a written loan agreement. Based on that agreement, my wife moved all that 70K (60K + 10k) money from our joint checking to her personal checking account (to get treatment for her father’s illness) and then we closed our joint checking account. After that, in around two year time, she paid me back 35K (half of that 70K) and I deposited those payment checks into my personal checking and then we spent that money for our normal living expenses (e.g., to buy groceries, paying utility bills, etc) and for my medical treatment (I have been facing a life threatening medical condition). I am still defending the lawsuit (which has been progressing very slow) and it is now approaching an end.

Recently, someone warned me about possible Florida fraudulent transfers (chapter 726) and Florida statutes of fraud (chapter 725) (due to the agreements and money transfers that I made with my wife) if I lost the case. I never heard them before. I read those statutes and also read a case law that was recommended by that person: BROWNING v. POIRIER, 165 So.3d 663 (2015). It seems to me that the money transfers and agreements that I made with my wife (explained earlier) do not violate any law. Also it seems to me that spending of money (either from our joint checking account or from my recent personal checking account) for our normal living expenses or for my treatments is acceptable. However, I am not quite sure if I violated any statutes of fraud or fraudulent transfers, etc.

Please, kindly provide your advice. I am happy to provide any additional details.

Stop fretting!

Transferring one's asset to avoid creditors IS NOT A CRIME! No arrests. No fines. No imprisonment. Understand? All these laws do is to provide a creditor wronged by the transfer with the civil remedy of voiding the transfer.

Moreover, for several reasons you have done nothing to activate Florida's fraudulent transfer laws. You haven't transferred any assets, not in the context of the statutes proscribing it. All you have done is move them from one place to another. There is no scienter. No concealment or attempt to conceal. Really it is no different than having a safe containing the family jewels and negotiable stock certificates and moving it from your study to your wife's sewing room.

Lastly take LdiJ's "legal advice" with a dose of sodium chloride. She often neglects to inform her readers that she has yet to enter the doors of a law school.

 

[javlon]

Thank you for your insightful comments. I am not fretting now!