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Woman sues husband in convoluted high asset divorce

Divorce proceedings don't typically involve a federal courtroom, but in some high asset divorces, federal authorities may have to get involved if certain conditions are met. Hiding assets, especially if one of the parties in a divorce acquired those assets illegally, can merit scrutiny at the federal level.

A New York woman is suing her estranged husband, after she says he took part in a white collar crime scheme that resulted in hidden assets. The case is more complicated than most high asset divorces, such as those that occur between celebrities. For example, singer Willa Ford, who married in Texas in 2007, recently began divorce proceedings against her NHL star husband. The pair's divorce has been so quiet that it's barely made a blip on media radars.

The more dramatic case out of New York, however, began when a hedge fund executive's wife found herself on the receiving end of a divorce lawsuit. She had married the high-powered businessman back in the late 1980s, before he had earned the bulk of his impressive profits. Eventually, the man made tens of millions of dollars on Wall Street.

He initiated divorce proceedings in 2010, although his wife says this came five years after he began moving money into secret accounts. She alleges that some of the money was hidden in the Cayman Islands, a well-known spot for storing proceeds that one does not want to share in a divorce trial.

The hedge fund executive's wife also claims that substantial amounts of the hidden money came via illegal means. Her husband, she alleges, was involved in a plan to earn money from short-selling stock, effectively destroying one Canada-based financial services company.

That company actually sued the woman's husband in 2006, but he was later dismissed from the suit, which has still not been fully resolved. If prosecutors later implicate her husband in the financial crimes, she may be able to receive damages under the Racketeer Influenced and Corrupt Organizations Act, better known as RICO.

However, if a judge decides the woman's lawsuit is frivolous, she could be forced to pay for her husband's related legal fees.

Source: The Journal News, "Wife sues husband, says he hid assets he acquired illegally." Erik Shilling, Sept. 4, 2012.

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Attorney Christine K. Lincoln

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