You Just Discovered Your Husband Is a White-Collar Criminal—Now What?

Lisa Lawler’s nightmare is something no one should ever face. But many do, and the battle scars it leaves are brutal. 

In 2007 her husband told her he embezzled from the company he worked for. He first copped to $150,000, then upped it in increments to $500,000, and then to $1 million, before attempting suicide on Christmas, when he finally confessed to $2.5 million. As if this horror were not enough, it came on the heels of his admitting a long affair with one of her best friends. 

It took two years for the grand jury to indict her husband, and he was arrested in December 2009. Fortunately, he made restitution and was sentenced to two years in jail. (He served one year, and was released on parole and then given five years’ probation.) Watching as he was led away in handcuffs to languish in jail while his attorneys arranged his plea, Lisa wondered what was next. It did not take long before she found out.

She soon received a bill from the IRS for $384,000 for taxes, penalties, and interest. Because her husband had not reported the ill-gotten income on their joint tax return (which she signed), she was responsible to pay it. No discussion. In the case of a white-collar criminal who cannot pay the restitution and fines, the government can seize all marital assets. 

Lisa had few options, but she started by divorcing her husband, and then living off the proceeds of the sale of the marital residence, which the judge awarded her in the divorce settlement, to pay for living expenses for herself and the couple’s 13-year old son. Next, she moved from Cape Cod to Austin, where the cost of living was less and she had an extended family support system. She eventually worked in real estate and took care of her father, stricken with Alzheimer’s, until he passed away, leaving her a small trust that relieved some of the immediate financial pressure. And she negotiated with the IRS, using the ‘innocent spouse’ defense.

But what she wasn’t prepared for was the social stigma, particular the question people often posed: How could you not know? She developed sympathy and compassion for women like Ruth Madoff.

And she set out to help others avoid it, beginning in 2013 with her blog, The White- Collar Wives Club. A year later, she founded the private, online support group, The Secret Lives of White-Collar Wives, which now has 100 members, and penning The White-Collar Wives Survival Guide: What to Expect When Your Husband is Prosecuted for a White-Collar Crime. Her blog and counselling service are now combined in The White- Collar Wives Project, which also provides education on the acute stigma innocent spouses must endure and is bringing change to the front lines of prosecution so that spouses can have their own fair legal standing recognized in the courts. “Women come in emotionally crippled and afraid. I tell them they cannot be wallflowers—they must take action,” Lisa says.

White-collar crime claims losses of between $300 billion and $600 billion annually, and men commit a staggering 85% more white-collar crimes than do women in similar positions within companies, according to the Association of Certified Fraud Examiners’ 2014 report. However, men are not immune to the suffering. Sometimes their wives are the culprit, known as pink-collar crime, which Kelly Paxton writes about extensively.

What advice does Lisa have for women? First, understand that no group is immune from white-collar crime. In addition to the financial loss, the women family members affected by it run the gamut from doctors’ and accountants’ wives to the spouses of tow-truck drivers. Marriage may be based on romance, but at its most basic level, it is a partnership. Like any partnership, it carries obligations. Just as a spouse’s running up a big credit card bill becomes a marital obligation, so is the aftermath of embezzlement. As the spouse, you are on the hook. 

Although Lisa is not a lawyer, she tells victims to get divorced immediately (and seek legal counsel). That way, you will have a chance to rebuild and possibly protect some of your assets. “Make sure you understand everything you are signing, such as loan documents and tax returns. And, lose your denial. The Feds don’t bring cases they don’t think they can win, so wives need to stop being in denial, because paper trails don’t lie,” she cautions. 

She helps her clients create a forward-thinking mindset, “You will get through this.” Spouses and families are the first victims of white-collar crime, and are left to glue the detritus of their shattered financial lives back together. “Don’t make your husband’s case your full-time job. You are on separate paths now and will likely become your children’s sole caretaker, so if you are not gainfully employed, you need to get a job or obtain training to support yourself and your family.” She herself had been out of the workforce for 20 years when she came face to face with her husband’s crime, and the only job she could find paid a mere $14 an hour. But it was a start on her path back to normalcy.

What is next for Lisa? Would she remarry? “I dated someone for a year, but he needed more time and attention than I had to give. My work takes up the majority of my time, so I don’t date these days,” she explains. In addition to her blog and private coaching, she is working on a documentary to garner even more exposure for this issue. And she is working on a training for attorneys to understand how to represent innocent spouses, as the court system often sees these situations as low-hanging fruit. “They need to adopt an eyes-wide open stance, showing (women) where the pitfalls are, because innocent spouses are not only betrayed by a trusted spouse, but also are victimized by a legal system that treats them as chattel and or collateral damage rather than having fair legal standing of their own.” 

Bottom Photo of Lisa by Austin Lawler

About Merry Sheils (24 Articles)
Merry Sheils won the New York Press Club’s Journalism Award for best business writing in 2011 and 2012. As a portfolio manager for private clients, she writes a financial column for as well as features and profiles. She frequently writes economic and capital markets commentary, including white papers, thought leadership pieces and investment reports, for companies and investment managers. Prior to becoming a writer, Merry worked as a senior portfolio manager and investment analyst at BNYMellon and Wilmington Trust Company (now M&T Bank). A SUNY graduate with a degree in finance, she is the author of “Debt-Based Securities” and has been published in The Financial Times, Forbes and Chief Executive Magazine, and has appeared as a guest on CNBC. She founded First New York Equity, Incorporated, an investment advisory firm, and sold it to Price Waterhouse (now PricewaterhouseCoopers). She divides her time between New York City and her 18th century house in Columbia County, NY, where she is active in the North Chatham Free Library, the Old Chatham Hunt Club and the Columbia County Historical Society.