Nassau County Family Law Blog

Thursday, October 8, 2015

NY High Court Considers Appeal of Divorce Court Contempt Order Over Hidden Assets

What are the consequences for hiding assets during a divorce in New York State?

When it comes to divorce, full disclosure is a hallmark requirement of both parties. In order to ensure each spouse is treated fairly during the process, New York law requires that both parties submit their financial information, including all assets and debts, as of the date of separation. If one spouse attempts to shield or hide assets from the other, the former could face significant liability and contempt charges.

In one ongoing divorce case, a husband is accused of hiding the proceeds from the sale of one of his dry cleaning businesses – and this is not the first time he has faced such allegations. According to reports, the feuding spouses share an escrow account wherein the proceeds from any major sales of property or liquidation of other assets are expected to be placed. Allegedly, the husband sold a dry cleaning business and transferred several other pieces of property, but has not made a deposit in the escrow for nearly 5 years.

In the husband’s defense, he claims that the transfers were to family members and were not actually profitable sales. The wife, on the other hand, believes the husband is shielding the assets in a private account, refusing to reveal the amount and location of the funds.

In 2010, the husband spent 15 days in jail for selling another piece of marital property and refusing to disclose the location of the proceeds. According to public records, the property sold for $776,000, but the husband claims he has no idea where that money is located. Moreover, the husband claims he has already obtained a divorce under the laws of the nation of Lebanon – a claim which remains unsubstantiated.

In September, the parties reconvened for a contempt hearing over the missing funds and proceeds, and the three-judge panel is expected to make a decision in the next 30-60 days.

If you are considering divorce on Long Island or in the greater metropolitan New York area and would like to discuss your options in terms of property division or other matters of family law, please contact the office of Howard B. Leff, PC: 516.739.7500. 

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