5 of the Dirtiest Divorce Tricks

Some divorcing spouses treat each other deplorably. In these sad cases, it is actually hard to believe they were once in love. Candor and kindness are replaced by artifice and cruelty. Divorce lawyers are well aware of the grab bag of dirty tricks spouses inflict on each other. My top five dirtiest divorce tricks are:

1. Conflicting Out All the Top Divorce Lawyers

An age-old practice for a spouse who expects a long, drawn out divorce battle is to ensure their estranged partner can’t retain a top divorce lawyer. It goes like this – husband or wife makes appointments with the top lawyers in the area. At each meeting they reveal enough about their situation that the top lawyer, who they have no real intention of retaining, cannot act for their spouse. If each top lawyer charges them $500.00 for a one hour consultation, they only spend a few thousand dollars to ensure they have defanged their spouse by preventing him or her from hiring a “gun” equivalent to their top-tier counsel. Yes, this happens in the world of high net worth divorce.

2. Firing Your Lawyer Just Before Trial

Another effective divorce trick is to fire your lawyer weeks before your divorce trial is set to commence. How does this work? It’s easy. Let’s say you are the wife of a wealthy husband. Since you obtained a court order ejecting your husband from the family home, you now reside in luxury with peace and quiet; you are receiving thousands of dollars a month in tax-free child and spousal support; and your life consists of tennis lessons, lunch with the girls at the Club and evening soirees. Meanwhile your husband is doing what he always does: travelling around the world doing business deals to support your mutual lifestyles. He doesn’t even see the kids much, so there’s no hassles at all.

Why would you spoil all this by taking a chance that a judge may eliminate some part of your lavish lifestyle or impose an access schedule for the children to see their father that may interfere with your plans?

3. Transferring Your Assets Off-Shore

While you may live a life of champagne and caviar, it is unlikely you can maintain that level of opulence if your spouse has arranged to stash all his liquid assets off-shore in trusts set up in any number of tax havens such as the Bahamas, the Isle of Man, Turks and Caicos or Panama.

In many jurisdictions a Court may make an order that off-shore assets be divided between the spouses, but just wait until you see how difficult it is for you to convince the foreign jurisdiction they must obey the order of a North American Court. All I can say is good luck!

4. Arranging Multiple Mortgages on Your Real Estate

It is not uncommon to see marriages where the “little lady” has no idea of what she and her husband are really worth. Imagine a spouse’s disappointment when their lawyer informs them that the family home and their summer cottage are mortgaged to the hilt and have little or no equity. Their once middle-class standard of living evaporates as Mrs. now looks for a basement suite to house her and her two children.

Another real estate divorce trick is to build a lavish home on leased land that is situated on property that is in the agricultural land reserve, so that while it may have cost $3 million to build, it has no real market value since nobody in their right mind would purchase this property. Yes, this is a true story.

5. Building a House of Cards

For a time life is grand, but inevitably problems arise in your marriage. In an effort to please your spouse you try you to spend your way back to the marriage you once had. Little does your spouse know that the trips to Europe, Hawaii and the Super Bowl were leveraged, courtesy of American Express or Visa.

The marriage does not survive and you discover your net worth is much less than you expected as you have tens of thousands of dollars in credit card debt all used for the family. Let’s just hope the Sistine Chapel was worth it.

Perhaps you think that with the explosion of mediation and collaborative divorce, these tricks have lost their luster? Think again. For spouses who need revenge more than they need closure, they are alive and well.

Should Lawyer Who Has Sex With His Client be Disbarred?

It is common knowledge that a doctor who enters into an intimate relationship with his/her patient will typically lose his license to practice medicine. But what about lawyers? Is a sexual relationship between a lawyer and his client considered a punishable ethical breach? Is it a conflict of interest and should it warrant disbarment?

The story of Ontario lawyer Anthony Macri provides some insight into this delicate subject. Mr. Macri was acting in a family law case for a vulnerable stay-at-home mom with two young children. She found herself without financial resources to defend herself against her husband’s litigation tactics, which included allegedly vandalizing her personal property.

Falling for a “damsel in distress”,  Mr. Macri began a consensual sexual relationship with his client, a coupling that both hoped would continue after her family law matters were completed. During the course of their romantic trysts, Mr. Macri loaned his client $60,000 to cover her legal fees and personal expenses. She promised to pay him back from her share of the sale proceeds of the family home.

Eventually her home sold, but she refused to reimburse Mr. Macri for the loan. That is when their relationship turned ugly. Mr. Macri retaliated by sending threatening emails and text messages to his former lover saying “You don’t want to screw me over like this. Your case isn’t over. You still need me.” Other messages suggested that Mr. Macri would divulge personal information to her husband.

Not surprisingly, Mr. Macri ‘s lover reported their relationship to the Law Society of Ontario, and was called upon by them to address the issues raised by his clandestine relationship. The hearing tribunal found that Mr. Macri’s behavior in both acting for his client and sleeping with her was a conflict of interest. His loan to her, which he did not disclose to his law firm was the basis for their finding that Mr. Macri lacked integrity, and his inappropriate and abusive emails to her constituted dishonourable conduct.

While physicians who engage in sexual activities with their patients are subject to removal from their profession, there is no similar policy with respect to lawyers.

Lawyer Macri was fired by his law firm; suspended from the practice of law for two and a half months, and fined $2,500 with additional costs of $2,000 payable to the Law Society.

Should lawyers have the same ethical edicts as doctors in Canada? University of Ottawa law professor Adam Dodek was quoted in the “Toronto Star”, saying:

“Lawyers who have sex with their clients should be subject to a mandatory penalty of disbarment, the ultimate penalty that law societies can impose on lawyers. It is surely time to revisit the issue in the public interest.”

Side note: Was Mr. Macri repaid the funds he loaned? No.

Lawdiva aka Georgialee Lang

Lawyer Falls for Nigerian Scam, Loses His Law License

GeorgiaLeeLang059Albert Einstein’s quotes are legion, but one of his most pithy is:

“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.”

Along the same line, Judge Judy once remarked  that “Beauty fades, but dumb is forever”. 

Both quotes are apropos for a lawyer from Iowa who actually believed he could receive millions from a Nigerian Prince, and worse yet, dragged a client or five along for the ridiculous ride!

Lawyer Robert Allen Wright Jr. represented Floyd Lee Madison in a criminal matter in 2011. Mr. Madison presented lawyer Wright with documents which allegedly showed that Madison was entitled to a huge inheritance from his long-lost cousin in Nigeria. He asked Mr. Wright to help him get the funds transferred to him, a sum of over $18 million dollars, in exchange for 10% of the money. There was, however, one catch. To obtain the funds Madison needed to send the sum of $177,000 to Nigeria to cover the inheritance taxes.

At the same time, Mr. Wright was acting for Linda P. in a worker’s compensation suit. She received a payout of $25,000, whereupon Mr. Wright asked if she would loan $12,500 to Floyd Madison, as he needed the money to obtain an “anti-terrorism certificate” in order to complete the Nigerian transaction. She did more than that: she gave her entire WCB payout to Madison. He then enlisted several other clients to “loan” monies to Madison, in hopes of reaping great rewards from multi-millionaire to-be  Mr. Madison.

Meanwhile, lawyer Wright was busy dealing with representatives of the Central Bank of Nigeria, the African Union, and even the President of Nigeria. As scams go this one was a good one. He spoke with the Nigerian lawyer who purportedly witnessed the will of Madison’s cousin, and had discussions with a lawyer in England, Jonathan Walker, who told Wright he had travelled to Nigeria and attested to the legitimacy of the inheritance.

You already know how this ends…no inheritance received, no legal fees paid, and no repayment of Mr. Wright’s clients. But it wasn’t over yet.

Wright was inundated with disciplinary charges from his discipline body for incompetence, failure to disclose or secure client consent to conflicts of interest, and assisting a client in dishonesty or fraud. (The latter charge was not made out, as Mr. Wright was not devious, just stupid!)

The Iowa Supreme Court Disciplinary Board found that Mr. Wright “honestly believes–and continues to believe that one day a trunk full of one hundred-dollar bills is going to appear upon his office doorstep.”

The Board described Mr. Wright’s conduct as “delusional” but not fraudulent, and he was suspended for a period of one year.

It may be hard to believe but according to Ultrascan Global Investigations who operate in 69 countries, the profits earned by Nigerian 419  scam artists amounted to over $12 billion dollars in 2013. They say there are more than 800,000 organized perpetrators globally and many of them are Nigerian. Section 419 is the  section of the Nigerian Criminal Code dealing with fraud.

Ultrascan also reports that in 2002 the United States government was given authority to open all letters mailed from Nigeria to the U.S.  Government authorities found that 70% of the letters were scams. Today, the Nigerians rely mainly on email to induce unsuspecting victims.

Bottom line: If it sounds too good to be true, it probably is!

Lawdiva aka Georgialee Lang

Divorce Lawyers Misunderstand Effects of Minority Shareholdings

GeorgiaLeeLang025The division of business assets between spouses in a divorce can be complicated and tricky. Elizabeth Berardi of New York found this out the hard way. She retained seventy-member law firm, Philps Nizer , in 2000 to draft a marriage agreement for  her, a document that would take effect if her marriage to Eugene Berardi failed to survive.

The negotiations led to an agreement that would give her 49% of her husband’s  interests in  several bus companies, while Mr. Berardi would retain 51%. It seemed like a very good deal.

Five years later the Berardis’ marriage collapsed and divorce proceedings were commenced. Mr. Berardi’s first tactic was to  challenge the marriage agreement, attempting to set it aside. Ms. Berardi reengaged Philips Nizer, who put 23 attorneys and 16 other professionals to work on her case,  appointing lawyer Helen Davis Chaitman as lead counsel.  After a trial in 2006, the court handed down their Reasons in 2009 upholding the agreement. Philips Nizer had achieved success for Ms. Berardi , despite Ms. Chaitman’s inexperience in family law, and after charging  legal fees of $1.4 million.

But all was not what it seemed. When Ms. Berardi attempted to liquidate her share of the bus companies, she found she had little power as a minority shareholder, particularly in the face of shareholder’s agreements  executed before 2000 that limited her ability to freely sell her interests. Her minority position also diminished the value of her shares in the company.

Ms. Berardi sued Philips Nizer for malpractice and professional negligence, asserting they either knew or should have known, and told her of the effects of her minority interest and the shareholders’ agreements. In particular, when her husband sought to overturn the agreement, they should not have opposed his application. Had the agreement been set aside, by consent of the parties, she could have negotiated a bargain that would see her receive liquid assets.

She also argued that Philips Nizer were in a conflict of interest by agreeing to act for her while seeking to uphold the agreement they had drafted. In a separate claim Ms. Berardi alleged she was grossly overcharged by Philips Nizer, as her ex-husband paid his lawyers only $395,000 in legal fees.

Naturally Philips Nizer sought to have Ms. Berardi’s lawsuits dismissed, suggesting she was simply attempting to escape payment of the funds she still owed the law firm, an amount over $700,000. However, this week Justice Nancy Bannon disagreed with Philips Nizer, refusing to dismiss the court action, paving the way for the litigation to continue.

Ms. Berardi’s new lawyers, Pollock & Maguire, believe that Philips Nizer pursued and obtained minority shareholder status for Ms. Berardi, never realizing the ramifications of their successful defence, until it was too late. Lead counsel, Helen Davis Chaitman is no longer with the firm and is not a defendant in the lawsuit.

Lawdiva aka Georgialee Lang