All in the Family: How to send your husband to jail

By Joseph N. DuCanto
Schiller, DuCanto and Fleck

Divorce brings out the best and the worst in us. While some people try to avoid anger and recriminations, others seek to punish not only the fickle ­partner but also all who support him or her.

A New York newspaper headline in a story datelined Nov. 16, 2007, shows how a ­destructive litigant may, in fact, ultimately see her husband jailed. “NYC Pastor’s wife sees church as asset in their divorce,” screams the headline, catching virtually any bored or overworked eyes.

The story details the wife’s claim that the pastor-husband treated the assets of the church as “a personal piggy bank,” giving examples of the use of church funds and ­assets for ­personal consumption.

Most divorce lawyers hear this common ­refrain from wives of husbands engaged in family-held companies, and the claims are often verifiable by an audit of business and personal records. Lawyers often find themselves in a quandary as to the right legal and ethical approach to these disclosures, which involve various shades of embezzlement, ­diversion or misuse of corporate funds, and tax evasion or fraud.

Acquaintance with IRS operations over 50 years has brought me many times into contact with “special agents” of the IRS, whose main function is to investigate possible fraud and evasion cases for ultimate referral and prosecution by the U.S. Attorney.

Not surprisingly, I am informed that public filings such as the New York case cited above initiate many criminal investigations.

Others are initiated by direct contact with an angry and vindictive wife who seeks to destroy her unfaithful ­husband for his temerity in leaving a loveless and often destructive relationship.

Quite obviously, the moving party in these matters has not thoroughly understood the net consequences or what destructive powers she has unleashed, destructive not only to the main actor, but to herself and the entire family as well.

Whether criminal prosecution and the ­infliction of jail time are added to customary civil collection efforts is really a nicely ­balanced issue, which depends upon a host of considerations not here relevant.

At a minimum, the IRS will launch a civil action to collect unpaid or evaded taxes, plus interest and penalties. This could result in a levy against all property owned by the taxpayer, allowing the IRS to take both marital and non-marital property.

Since married couples customarily file joint returns, the IRS claims, including interest and stiff penalties, will attach to all the property of the husband and wife. Despite her role as a whistleblower, the wife gains no legal or ­financial advantage and often has effectively destroyed her grounds for possible personal financial redemption by claiming she is an “innocent spouse.”

Legal counsel, when faced with an angry client bent upon the destruction and ruin of the other party, is placed in a dangerous dilemma and confronts ethical quicksand. It has to be taken as an article of faith that a spouse angry and self-destructive enough to publicly disclose all these damming materials is not the least bit interested in what can or might happen to the lawyer who seeks to ­assist and serve her.

In the first instance, the attorney must ­recognize that being rational and effective simply may not be accepted by such a client. Instead, a bit of sympathy for her position has to precede, but be accompanied by, an ­exposition of the civil and criminal action she may face if these charges are boldly made a public record.

Courtesy and consideration on both sides is mandated by the presence of an elephant in the conference room in the form of knowledge, which, if made public, would destroy the interests of both parties.

While the attorney wants to prevent his or her client from making a serious mistake for which she may well suffer grievous consequences, there is nonetheless intertwined in your advice the nagging issue of professional culpability.

Am I ethically exposed somehow by seeking to suppress this material that may constitute felonious activity? Probably not, if for no other reason than that your client’s confession of participation-active or not-places her in jeopardy, and you must not reveal your client’s confidential communications to you without her express consent or her direction to do so.

There is, unfortunately, a suicidal streak in many personalities who believe that “the truth will set you free.” Believe me, not in this life or the next, and I have often cautioned my clients to “Always tell the truth, but don’t ­always be telling it!”

A strategic secret well played is often much more productive of positive results all the way around than is a dirty bomb prematurely exploded in the most public of forums - the tabloids.