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Article written by Axis Geffen
Why would a private investigator write an article detailing ways that spouses can hide money during a separation or divorce? Well, because it can help you understand that unfortunately, spouses do try to hide money, that people can be very clever and creative when money’s at stake, and that professionals who work in family law will take you seriously if you tell them that your spouse is hiding something. I do caution the reader to avoid trying any of these tricks, and of course, we accept no liability for bad decisions made by the reader, or the consequences that may follow those decisions.
So, how do they do it? How do spouses hide money? The answer is sometimes very simple and easy – and sometimes very complex. Make no mistake, hiding money from your spouse is a form of financial fraud; however, people have done it, and in some cases, they’ve done it very well. But few people actually get away with it.
Option 1: Lie about it. The most common way that people try to hide money is to simply tell a lie. This can range from exaggerating money spent on a bill, to claiming that they lost some money and don’t know where it went.
Option 2: Get a safety deposit box at a bank. Yes, people still do this and it works pretty well…unless you find out where the box is.
Option 3: Get the boss to pay you under the table. It may come as a bit of a shock, but there are more than a handful of people out there that get paid in cash and never report the income. There are ways to find and prove this is happening, but it does take some work.
Option 4: Open a corporation and invest the money into the business (done correctly, this can be pretty lucrative).
Option 5: Transfer assets into other companies and / or people’s names.
Option 6: A paint bucket. This may sound ridiculous; however, there was literally a case in which a painter had hidden over $50,000 in a used paint bucket in his attic. Despite numerous searches of the property, nobody ever looked in a dirty can of paint. This goes to show you that sometimes the best hiding spots are in relatively plain view.
Option 7: Overpay your credit cards and bills. Paying a bunch of money into an electric bill, for example, means you don’t have access to it, and it also means that those costs you declared don’t actually apply to you. Similarly, overpaying a credit card means that the credit card company owes you money, but again, you don’t have immediate physical access to that cash. If nobody looks into it, you can just call up the credit card company later on and they send you a cheque for whatever you don’t owe them.
Option 8: Purchase prepaid credit cards and top them up. Often these cards are not reported to any credit agency and as such, they are hard for some to trace.
Option 9: Gift cards. What says fraud better than buying yourself a pile of gift cards. Sometimes they are refundable, and if not, they are still good to make purchases with.
Option 10: Overpay on taxes. It takes a while to get a refund, and few people question a high tax bill.
Option 11: Life insurance. The right people can make this a very solid loop hole.
Option 12: Don’t cash the cheque. Sometimes a payment is issued for a large sum, but receiving the payment in hand does not mean that the asset is always declared. Depending on jurisdiction and circumstance, a cheque could be valid for up to a year. Therefore, sometimes people will wait to make the deposit(s).
Option 13: Create a fake expense. You would be surprised how many times we’ve seen someone invent a phony expense. This can be fairly easily detected though depending on how well the opposing party’s expenses are reviewed.
Option 14: Make a down payment. For large expenses like art, jewelry, cars, boats, etc., a very large down payment can be made and until the property is collected, it rarely shows up in searches.
Option 15: PayPal. Well, it doesn’t have to be PayPal, although PayPal is a popular place to park money. Funds here don’t show up on most people’s radar, and can be used for purchases, or easily accessed, when needed.
Whatever method of deception a person uses, keep in mind that nothing is ever guaranteed to remain hidden. Family lawyers, forensic accountants and private investigators can all detect when something isn’t quite right, and they all have ways of finding hidden assets. In some trickier cases, a P.I. may be required to help you locate funds that have mysteriously disappeared, especially if there is no paper trail.
If in doubt about what your ex is up to, consult with a family lawyer. He or she can help you determine how to proceed. And on that note, do not attempt to conduct a full financial investigation on your ex by yourself. It’s always a wise idea to hire professionals when getting separated or divorced because they will ensure that your legal rights are properly protected. But when dealing with something as complex as assets, you could end up losing thousands of dollars without appropriate assistance.