Court Sees Through Husband’s “Nefarious Scheme” to Hide Swiss Bank Account Money
In a recent Ontario decision called Radlo v. Radlo, the court rejected as “preposterous” the husband’s story that almost $450,000 in undisclosed income actually belonged to non-Canadian “wealthy friends”. It described the dispute between the husband and his former wife of almost 20 years in this manner:
From [the wife’s] perspective, this trial was really all about nondisclosure by [the husband] of two large sums of money, that is $353,600.00 and $80,000.00, which [the wife] submitted were not disclosed by [the husband] in his financial statements or to the court. [The wife] suggested that the undisclosed monies ought to be considered either in equalization of net family property and/or also income for [the husband]. …
[The husband] spent most of the trial trying to explain the two large sums of money that were in dispute and suggested to the court that both sums belonged to his wealthy friends who lived outside of Canada. He stated that the large sums at issue should not and do not represent part of family monies to be shared with [the wife] or to be accounted for in his income.
In support of her claims, the wife presented a forensic accountant’s report that traced the money; it showed that the contentious funds had originated from a Swiss Bank account, and had ended up in an account of a third party in Spain who was likely holding the money for the husband. However, the court concluded that – as the report stood – it was not enough to prove either position, and lamented that the further forensic analysis that the report’s author had recommended was never done. (The wife had run out of money.)
However, the wife also introduced certain “smoking gun” emails the husband had written to and received from the so-called “wealthy friends” abroad. In the court’s view these established conclusively that the financial transactions were not a gift or loan as the husband had claimed; indeed most of the emails had been concocted by the husband himself in order to form a paper-trail of his scheme to hide the money. The court said:
The test in a civil case is on the balance of probabilities. I find on the balance of probabilities, based on the email evidence presented, that [the husband] presented a nefarious scheme to deceive [the wife] and the court with respect to the $353,600.00 and the $80,000.00. The preposterous explanations given by [the husband] are not believable. …
This simply leaves the court to conclude that there was an elaborate scheme of transfers in and out of the country from Geneva, Switzerland, then to Spain, in order to mislead, deceive and confuse.
(Incidentally, the wife had been able to access the husband’s emails on her own computer using an email password that the couple used during the marriage. Over the objections of the husband that the emails were “stolen”, the court ruled they were admissible, adding: “When parties separate if they do not amend their computer passwords, then they do so at their own peril.”)
The court therefore concluded that the money belonged to the husband and not the “wealthy friends”, and that it should be dealt with in the normal course as part of the equalization of the net family property. The court also concluded that the husband’s conduct in trying to deceive the court fell within the definition of “bad faith” and unreasonable behaviour which justified a substantial costs award him in the amount of $15,000.
For the full text of the decision, see:
Radlo v. Radlo, 2013 ONSC 7329 (CanLII) http://canlii.ca/t/g2b3l