Fraud, Concealment, or Theft of Community Assets During Divorce

California law requires spouses going through a divorce to fully and accurately disclose their assets, debts, income, and financial interests. Hiding property, transferring assets, or submitting false or incomplete disclosures can result in significant penalties.

Under California Family Code § 1101, a spouse who breaches these fiduciary duties may be ordered to pay attorney’s fees and costs and, in serious cases, may lose their entire interest in the concealed community asset.

What Is Asset Concealment?

• Failing to disclose bank or investment accounts
• Transferring property or money to friends, relatives, or business associates
• Hiding income, bonuses, or business interests
• Understating the value of an asset
• Making false statements on a Schedule of Assets and Debts
• Omitting significant financial information from required disclosures

Discovering or disclosing the asset later does not necessarily erase the consequences of the original concealment.

The Potential 100% Penalty

If a spouse intentionally conceals a $200,000 community investment account and the statutory requirements are met, the court may award the other spouse the entire $200,000 rather than simply dividing the account equally. Attorney’s fees, costs, and other remedies may also be available.

Smith Law Group Uncovers Concealed Assets

In one matter, Smith Law Group used financial discovery to uncover a concealed account containing approximately $250,000. Husband withdrew those funds by way of a cashier’s check, held the check for more than two years, then deposited it into a new account in a different bank. Through subpoenas and financial tracing, our firm uncovered the movement of the funds and established the concealment and fraud, entitling Wife to the entire $250,000, not just half.

In another matter, Smith Law Group represented a husband with dementia whose property had been transferred into his wife’s name as her sole and separate property. After investigating the circumstances surrounding the transactions, and documenting his dementia, our firm established fraud and obtained relief restoring the property to its proper status, plus reimbursement of the attorney fees incurred.

When Financial Records Tell A Different Story

Bank statements, tax returns, business records, cashier’s checks, account-opening documents, deposit records, communications, and other evidence may reveal assets that were not properly disclosed, or have intentionally been hidden.

If you believe your spouse is concealing assets, submitting fraudulent financial disclosures, or hiding income, early investigation can be critical. Smith Law Group can evaluate the financial records, pursue appropriate discovery, and determine what remedies may be available under California law.