My friend, Steve Hayes, forwarded to me a link to a story about a man who was sentenced to 17 years in jail for hiding assets in his divorce. According to the story, Steven K. Zinnel, was accused of putting much of his
property in other people's names before and after filing for bankruptcy. He then allegedly laundered funds back to himself through a company
owned by an attorney, the attorney's trust
account and personal bank account.
Zinnel was convicted of 15 counts of bankruptcy fraud and money laundering last year. (The attorney was also convicted, but has not been sentenced yet). In addition to the jail sentence, Zinnel was also ordered to pay a $500,000 fine and forfeit assets worth more than $2.8 million
A few comments:
First, hats off to the judge for imposing a substantial jail sentence. Too often, white collar criminals get off with probation and restitution under the theory that if they go to jail, the victims will not be recompensed. In addition to questioning how much restitution ever gets paid anyway, if the potential downside to fraud is to pay back what was stolen, the cost/benefit analysis seems to weigh in favor of trying it.
Second, it is amazing how infrequently you hear about such cases. Is this due to so many people being honest or so few getting caught? I'd argue for the latter. Notwithstanding the popular view that everyone going through a divorce wants to cheat their partner, that is not my experience. While it is true that divorce brings out the worst in everyone (including, sometimes, the lawyers) most people are not trying to hide assets or commit fraud.
For those who are, however, very few get caught. A number of years ago at a lunch for AAML members, we took an informal survey: How many years had each member been practicing family law and how many times have you caught someone hiding assets? With a total of around 200 years of practice around that table, the total was maybe 3 or 4 cases.
Unscientific survey? For sure. But if someone is trying to bury a few bucks in the back yard, it is easy to do so and not get caught.
Of course, most cases do not involve $2.8 million in assets. In fact, most don't even involve $280 in assets! So this story is an example of "man bites dog." It happens, but fortunately, very rarely.
My friend Mark Goldstein, who is an employment lawyer, forwarded to me an article in the ABA Journal about a New Jersey court ordering a Rutgers University history professor to pay up half the
cost of his daughter’s education at Cornell Law School, which costs about $112,50.
According to the article, the divorce agreement did not include a provision which would have given the father the right to participate in school selection. The court held:
“If a relationship and a voice in the planning and selection of a school were his expectations, such terms could and should have been included in the agreement. They were not.”
In some states, the court has authority to order parents to contribute to post education expenses. Apparently in New Jersey, this can only be ordered if the parties agree - or in other words, the court can only enforce an agreement.
That is exactly the law in Wisconsin. Avoiding what happened in this case would be easy - a good agreement limits the exposure for these costs, frequently for example, putting a cap of the costs at UW- Madison or, as the court noted in this case, requiring the parents to consent to the choice of school.
A more interesting issue is the broader question - should a court have authority to order a parent to pay for post high school expenses if the child has the need and the parent has the ability to pay? There are pros and cons.
The biggest pro is that if the needs of the child and the ability of the parent both exist, the child should not suffer due to the divorce of his and her parents. In this case, the daughter is apparently estranged from her father. While that can (and does) happen in intact families, I would guess that it happens far more ofter when the parents divorce.
The biggest con is the likelihood of litigation. Giving a court the power to make this order can easily lead to parents fighting over it and sometimes litigating it. As I previously stated in this blog (and elsewhere), parents fighting is inimically bad for children.
Still, I think the existence of the authority would lead to settlement once the proclivities of courts become known. And I suspect most courts would, in the appropriate case, order such a contribution.
This is a moot argument, unfortunately. There are no proposals to change Wisconsin law - and to my knowledge, never have any ever been introduced. Pity. The needs of children do not end with high school and to have a child graduate with huge amounts of student debt would be a shame, if it is avoidable.
Perhaps I am the only one in Wisconsin who reads the joint custody statute this way: It is NOT really joint custody - it is severable custody. In other words the statute does not require the parties to act jointly, but specifically authorizes them to act separately.
Today, the CA in an unpublished, but citeable, opinion, upheld a contempt finding against a mother who transferred school districts for the children without the father's permission. Clearly, this was not the right thing to do, but did it violate the statute warranting a contempt finding?
Here is what the statute says, as quoted in the decision:
Under Wis. Stat. § 767.001(1s), a court that gives joint legal custody of a child is ordering both parties to “share legal custody,” such that “neither party’s legal custody rights are superior,” except as otherwise provided in the divorce judgment, and, as we have discussed, all legal custodians have “the right and responsibility to make major decisions concerning the child,” including “choice of school,” except as otherwise provided in the divorce judgment. § 767.001(2)(a), (2m).(Emphasis added).
No where in the statute does it require her to get the father's consent. Rather, it specifically gives her (and the father) the right to make major decisions. Although she did not do it appropriately, how is she in contempt?
The answer is that the court is reading the statute the way they think it should be worded rather than the way it is worded.
On the good news side, this is fodder for my column - I'll post a link to it when it's published.