23 Oct Is technology making it hard to find money in NJ divorces?
by Jeralyn Lawrence, Family Law Attorney, Lawrence Law
In some New Jersey divorce cases, one party may use technology to hide or move money. The good news is that there will almost always be a trail that can be traced.
The use of cryptocurrency to conceal assets is a concerning trend. According to Wikipedia, “A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems… Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency. Since the release of bitcoin, over 4,000 altcoins (alternative variants of bitcoin, or other cryptocurrencies) have been created.”
Simply put, cryptocurrency is digital money. One party purchases cryptocurrency and then uses it to buy goods and services. Alternatively, people hold cryptocurrency until it increases in value. People trade cryptocurrency from their virtual wallet to another’s virtual wallet. Without getting into the technology, the point is that cryptocurrency is becoming a more common way for people to move and hide money.
Another technology that people are using to conceal assets is the use of apps like Venmo. According to the Venmo website, “Venmo allows you to pay and request money from your friends. At its core, Venmo provides a social way to pay your friends when you owe them money and don’t want to deal with cash. For example: Splitting a lunch bill, Paying your friend half of a cab fare, Sending your roommate your half of the rent.” Or, moving money to a friend to hide it from your spouse. The friend then cashes in the transfer and gives the money back.
One of the most common tricks is the purchase of gift cards. One party takes cash from a marital account and buys gift cards. The party spends gift cards the same way as cash. I have seen cases where thousands of dollars’ worth of cards are purchased and then used to support the person’s lifestyle. This is essentially the same as stealing cash from the other party. The most commonly purchased gift cards are Visa, American Express, and store cards. Most times, there is a way to find out where and when the cards were purchased and spent.
As you can imagine, it can be difficult to locate the “paper trail” through these technologies. Because of the difficulties involved, I often need to bring in a forensic accountant to help track down assets and some accountants even specialize in the area of cryptocurrency. Monitor bank accounts for suspicious activity. Keep records of all transactions. Pay special attention to high quantities of smaller dollar amounts. These records may be the smoking gun that will be needed to find your assets.
For more information about this blog or other divorce, matrimonial or family law issues contact me at moc.m1579438653rifwa1579438653lwal@1579438653ecner1579438653walj1579438653.
Jeralyn Lawrence is a family law attorney with Lawrence Law in Watchung. She also serves as Second Vice President of the New Jersey State Bar Association (slated to become President in 2022), is the Past Chair of the Family Law Section of the NJSBA, and serves as Second Vice-President of the American Academy of Matrimonial Lawyers. She can be reached at moc.m1579438653rifwa1579438653lwal@1579438653ecner1579438653walj1579438653 or (908) 645-1000.
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