Money Rehab with Nicole Lapin - Uncovering Financial Infidelity with a Forensic Accountant and Brandi Glanville's Real Story

Episode Date: November 7, 2024

When one person suspects their spouse of financial infidelity during a divorce process, they might call up a forensic accountant— an accountant who specializes in following money trails that have been intentionally obscured. Nicole sits down with forensic accountant Cheryl Hynes to talk about red flags that could mean financial infidelity and ways spouses hide assets from the other during a separation. Plus, Nicole revisits her conversation with Brandi Glanville, a Real Housewives of Beverly Hills alum who suspected her husband of financial infidelity during their divorce. Originally aired 4.9.24

I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start, or even too complicated, if, say, you want to put your summer home in Maine on Airbnb, but you live full-time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you.

I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at airbnb.com slash host. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no

maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits

apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. A little over a year ago, I had Brandi Glenville of The Real Housewives of Beverly Hills on the show to talk about splitting up relationships and splitting up assets. Brandi was married to an actor who had an affair with another married actor, but I'm not here for the gossip. I'm here to talk financial infidelity. The definition of financial infidelity is simple. It happens when one spouse lies to another spouse about money in a significant and or harmful way.

This can be particularly nasty and damaging in a divorce when couples need to look at each other financially naked, so to speak, to divvy up assets. When one person suspects their spouse of financial infidelity during the divorce process, they might call up a forensic accountant, an accountant who specializes in following money trails that have been intentionally obscured. Today, you're going to be hearing from a forensic accountant, Cheryl Hines, to talk about what she actually does, the red flags that could mean financial infidelity, and ways spouses hide assets from the other during a separation. And I know what you might be thinking. Any type of accountant, even if it's a forensic accountant, is boring. Cheryl is certainly not that. She even told me about some of the wildest cases she's worked on and they are wild, which you'll

hear about later. But first, I want to stick with Brandy. Brandy alleges that there was not just romantic infidelity, but financial infidelity that happened throughout the divorce process. Here she is. So my divorce is extremely public and I still worry, you know, all of our bills went to another address. So even if I wanted to, and at a point I wanted to check his phone bill, I couldn't. And for some reason, I was okay with it. I just was madly, blindly in love. Do you feel like that's financial infidelity? Do you feel like that's financial infidelity?

Yes, absolutely. It's wrong on so many levels. And it's almost like it's preconceived. Like they know that at a point they may be getting out and they're protecting themselves. And that to me, that's worse than a prenup. Honestly, like I would rather have a prenup and know what I get at the end of it than having someone always planning for when it's over. That hurts. And then, you know, when I left the situation, I had to ask my dad to co-sign on a car for me at 36 years old. I was so embarrassed. I couldn't even lease a house without my parents co-signing. And it was horrible and embarrassing.

And at that moment, I'm like, I am working on my credit. I went and saw a credit counselor, and I started doing everything I was supposed to do to get my credit better. And right now, I have great credit, but it's still very expensive to live here, and it's still a struggle. I got alimony for four years because we were married for eight and it was, it sucked actually because it was, if he was working, I would get it based on what he was making. And for a lot of the four years he wasn't working. So I wouldn't get anything for my alimony. Child support was different. It was always, it was always varying. Never great. And even now when he told me he was taking,

you know, cutting it in half, I was like, all right. Like I got this. But it's also just kind of like ladies out there, no, they will not take care of you forever. Even if you're the mother of their children, you have to take care of yourself. Would you tell other women to get a prenup or a postnup? Do you advocate for those? I do. I mean, I know a lot of women that have. They were upset about it. And I told them my story.

I said, listen, I didn't have one. And everyone thought I was going to be great. And I left with nothing. No credit, no money. We were living out of my range over the back of my car for couch surfing on my friend's couches. Me and two little babies. It was, it was, I can't even tell you. I'll cry about it if I think about it. But what was the question? I'm like thinking, what was the question again? There's an actual term for this, divorce planning. To explain, you're going to hear

from Cheryl Hines, a forensic accountant. Here she is. divorce planning. To explain, you're going to hear from Cheryl Hines, a forensic accountant. Here she is. When I hear divorce planning, I think about somebody whose marriage has been on the rocks for multiple years. And you have no idea why these people are staying together. Well, it could be that one person is trying to restructure their finances so that when they do file for divorce, typically that would be like a second or a third marriage um not so often on the first one unless you know they have a family history where they've seen divorce over and over and over but they structure their um finances and you know financial planning and everything else so that the picture they paint when they ultimately do file

or when the other spouse files is not a favorable one. So, you know, that way they get to keep whatever it is that they're trying to hide. There's also another couple terms that are related to divorce planning I'm going to throw at you. One is sudden income deficiency, SIDS. And the other one is SADS, sudden asset deficiency syndrome. And they kind of go with it. There's probably no end though, to the possibilities for divorce planning if somebody really wants to hide it. And there are ways to counteract it, which in my case, I try to find out when things started going bad in the marriage. And I assume at that point that one of the spouses or possibly both started moving assets around. Of course, I had to ask.

WTF is sudden asset deficiency syndrome. It sounds like something I would definitely take a sick day from. There's another word, though, for this genre of phenomenon called intentional impoverishment that you might recognize from Brandy's story. Here's Cheryl's description. Intentional impoverishment is something that you're going to see, and it really is a shame when it comes up, where one of the parties is so bitter toward the other that they would rather intentionally take some action or inaction that's going to result in them having less income than they normally would have available

just because they don't want to share it. And it's really a shame when you see it. Fortunately for me, I don't have to do anything when I do see it other than flag it to the attorney and say, hey, you may want to find out what's happening here. Possibly bring in a vocational expert. Let them determine what this fellow or lady's income really should be based on their level of experience and education and so forth. In cases of intentional impoverishment, there is some recourse for the spouse who's trying to prove the financial hardship is by design.

In that scenario, a judge could impute income to the spouse who is making that case, meaning that spouse would get money that is equal to what they could have earned if the other spouse hadn't chosen to not act to realize potential income. Meaning that spouse could get money that is equal to what they could have earned if the other spouse hadn't chosen to not act to realize potential income. Brandy did actually hire a forensic accountant through her process, but it didn't provide the answer she was looking for. So I thought it was going to be great for me not to have a prenup. Unfortunately, when I didn't know about our finances and we were pretty much mortgaged to, you know.

Yeah. Yeah. Extreme. So there was nothing to even get, which I, of course, I didn't know. So I thought everyone's like, you're so lucky. I'm like, what? I'm going to get part of his debt? Great.

You unfortunately get debt too. You can, yes. Did you take on any of that? We did not. We had an apartment building I didn't even know about that we sold and it covered the divorce expenses and lots of secrets, lots of secrets. Tell me more about those secrets. Did you find out through the divorce proceedings?

Yes. So I hired a forensic accountant, which was very expensive because I really thought there was a lot of money. I did. I'm like, he's hiding it. We live this lifestyle. We have this house. We have these cars. You know, I'm driving my Range Rover everywhere and like living the life. like there's no way we don't have any money. And, you know, $12,000 later, we don't have any money and I still have to pay the forensic accountant. Beyond getting a forensic accountant, there are other ways you can accomplish what Brandy was trying to do, which was to disprove lowball estimates of income and net worth. One of Cheryl's favorites is to look at other places spouses have had to talk up their income

that have nothing to do with the divorce. Here's an example. This is great. Like say, for example, loan application. And I'm not trying to rip this out of the headlines. Absolutely not. This is a, one of my favorite tools is the loan application. Because in that case,

you're looking for, how much income are you telling the bank that you make? What's it substantiated by? And for the business owner, what are you saying the business is worth? I've had cases forever where, they're doing what's called puffing, where you're inflating the numbers

because you want to get that good loan, right, that you can't really afford. I've also had cases where for some reason they're diminishing what their assets and their net worth is on a loan application. Still never figured out why, but I have seen that. So that's probably the best example of third-party documentation. Hold on to your wallets. Money Rehab will be right back. I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start, or even too complicated, if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding

you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work,

but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at

airbnb.com slash host. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it.

If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC.

SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Ch chime.com slash disclosures for details. And now for some more money rehab. Listening to Brandy describe her situation and then hearing the most common red flag Cheryl sees in her work was really eerie. For me, the big one is always when I hear from somebody that you don't need to worry about that. Or even better yet, it's complicated. It'll be too hard to explain to you.

Let me just take care of it. So why are you not willing to share with me something that may affect both of us? And if the answer seems complicated and it doesn't inherently feel like it should be complicated, it's because there's a layer there that they're inserting as a barrier and the barrier shouldn't be there. I'd never saved money before I had modeled and basically what I made, I spent. And then I met my ex-husband and I had a credit card with my name on it. And I put everything on that credit card and I was, I trusted him. I was madly in love. And I never questioned anything. And I signed everything that was put in front of me.

And I think that happens to a lot of trusting wives and partners. And I came out of the divorce with nothing. What kind of papers did you sign? I wish I knew. No, I signed my name off of our house right before he filed for a divorce, like six months prior. It was like Christmas. He's like putting all these things in front of me. And I trusted him. And I think that happens like in the Teresa Giudice situation and a lot of these things that we're seeing play out in the media. I think a lot of times women can be naive because we have love goggles on and trust goggles on. Not that we're stupid by any means, but we're fooled by love. It simultaneously breaks my heart and boils my blood to see people take advantage of the trust

their partners have in them. But of course, trust isn't inherently bad. It's the foundation of any healthy relationship. But you do need the tools to be able to fact-check the information you've been given. And if something isn't feeling right, you need to know where to look to validate or override that feeling. Because in some relationships, financial infidelity is premeditated, right? It's called divorce planning. That means there will be money moves that happen pre-divorce. If alarm bells are ringing, here are some things to look out for. Isn't there a change in how the financial assets are being accumulated? Did we suddenly go from having direct deposits and now we're receiving checks? Another fan favorite, because it's really not that creative,

what people think it is, is they're going to switch from either having minimal federal tax withholding to maximizing the federal tax withholding, thinking that they're going to file a separate return from their soon-to-be ex, and they're going to get to hide all that money and keep that tax refund for themselves. Nope, not going to happen. So we just have to look at what's changed. He's bringing home less money. Let's look at a piece, though. Let's see if maybe he's putting more into a 401k.

It could be anything. if maybe he's putting more into a 401k. It could be anything. I mentioned that Cheryl had told me some of her wildest stories from her years as a forensic accountant. Here was one that blew my mind. I had a business owner who sold his business to his CPA.

And we knew the transaction was bogus. Spouse knew it was bogus. All the paperwork lined up and we couldn't prove it. And it was really super frustrating. So karma caught up to him, though, because what happened was after the divorce was settled, et cetera, the business owner went back to his CPA and said, hey um i'm going to give you back your check and you know let me have my business back and the accountant got a really bad case of amnesia and said what no that was a real transaction so business owner and his spouse got back together ultimately over this and they sued him and they did eventually get their business back.

Wow. Karma, baby. And it actually got crazier. And I've got three cases that were pretty epic. Like I hired a hitman to kill his wife. Oh my God. Hitman was a cop, as it always is. And, you know, when he did that, then he, she files for divorce, blah, blah,

blah, blah, blah, blah. While he's in jail, he hires another hitman, not to kill just her, but to kill the attorney, the forensic accountant, that's me, who's, oh yeah, who's coming up with all the crazy, you know, all the stuff that she's going to be able to take away from him if this divorce goes through. Dude, you're in jail for like 25 years. You wave goodbye. Right. And he was actually caught a second time because he wanted the hitman to bring him the attorney's. What's the technical word? Go nuts. Excuse me?

Go nuts. He's nuts. I don't think I've ever been speechless on this show. And the craziest. This one is a former retired pro athlete before a former pro athlete now retired. Divorcing his wife in favor of the much younger model starts three businesses, each of which is a fraud built upon the last one. All of his frauds were uncovered, and it got to the point where we chased him out of the country.

And at the time he was chased out of the country, he had already committed bankruptcy fraud, homeowners insurance fraud, workers' comp insurance fraud. What else did he do? a couple instances of bank fraud a little bit of wire fraud in there for good measure yeah why not you know and uh while he was i mean this guy was the typical stereotypical uh spousal abuser and emotionally he abused his kids promised the one kid you'll get a car when this divorce is over stay with me hang in there as soon as you know the kid was this poor kid had to testify at one of the hearings and he said you know what screw you you're not getting the car it gets even worse though he um i mean the car is a thing right so he's now he's now

wanted on federal charges and this dude was also in um america's most wanted okay um flees the country no one knows where to find him. The girl, his daughter, who had the car taken away from her, the car she never had, that she would now not get, one of her best friends was on vacation in a foreign country and actually saw him on a train.

Like literally sitting in that same passenger car of the train that she was. And she texted her friend real quick. She took a like surreptitious picture of the dude, sent it and said, I think your dad's here. So people find him and he goes on the run. And the story does not have a good ending.

He wound up wrapping his car around the pole. Oh my God. You know, high speed, one car accident. And he died instantly um the depth of deception that this guy went to though neither his criminal attorney nor his divorce attorney were willing to believe it was him until they saw the dental records. So was this a famous guy, like pro athlete? Do we know who this is? Probably.

From what I've said, if you really wanted to, you could figure out who it was. But I'm not dropping names regardless of how long ago it was. I know. And I'm not pushing because you scare me, Cheryl. Now, don't get me wrong. I don't want to scare you. This isn't a who did I marry rerun. Financial infidelity does not happen in every relationship, but it does happen.

And no matter what, it's always smart to have your own back. For today's tip, you can take straight to the bank. Forensic accountants, of course, are not free. William Kirby Law puts the cost of a forensic accountant at around $300 to $500 an hour and on average over $3,000 for a divorce case. Unlike some other types of lawyering where a person who loses the case has to pay for everyone's legal fees, the person who foots the bill for a forensic accountant is simply the person who wants to hire them. However, you can stipulate in a prenup the terms of payment around a forensic accountant if you do want to adopt a clause that says something like, whoever in the relationship does some sketchy financial shit, they have to

pay for the forensic accountant. You'll need to translate that into legalese, but you get the gist. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Levoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content.

And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.