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March 5, 2010

Do we want the feds going hard after the "pampered wives of Ponzi schemers"?

The question in the title of this post is prompted by this article coming from the Sun Sentinel, which is headlined "Pampered wives of Ponzi schemers: Can they be charged with crimes too?".  The piece discusses today's upcoming sentencing of one "ponzi wife," and here is how it starts:

They once could be found at the sides of their charming, wealthy husbands -- leading lives of privilege and glamour. Now those years of comfortably basking in money are gone, replaced by lawyers' questions and the scorn of former friends.  Their posh lives had been built on their husbands' schemes.

Call them "The Real Housewives of South Florida Ponzi Schemers."  Among them is mother Victoria Meisner, whose husband, Michael, masterminded a $37 million fraud.  Her story, however, is different from that of most of the other wives'.  For like her husband, she's now a convicted felon.

Victoria Meisner, 53, could be headed to federal prison when she's sentenced Friday morning for filing a false tax return.  She pleaded guilty in November to reporting $49,626 of total income in 2003, despite helping rack up more than $430,000 in personal expenses that year on a debit card belonging to her husband's business, Phoenix Diversified Investment Corp.

Meisner's case highlights one of the inevitable questions for authorities investigating Ponzi schemers and how they threw around their ill-gotten gains:  Should family members whose luxurious lifestyles were funded by dirty money face criminal charges themselves?  In some cases, yes, authorities say.

John Gillies, head of South Florida's FBI office, has called the Meisner case "a cautionary tale to spouses that they cannot claim ignorance about their financial situation when they know better."

Defense lawyers who specialize in white-collar crime agree that just because a spouse or family member isn't actively involved in a fraud, it doesn't mean he or she is safe from criminal prosecution. "Willful blindness in the criminal system is tantamount to actual knowledge if there are sufficient red flags to alert an individual that criminal activity is afoot," said Sharon Kegerreis, a Miami-based attorney and former federal prosecutor.

March 5, 2010 at 10:40 AM | Permalink

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Comments

WORKS FOR ME! as long as it also applies to govt officals. If one of their laws is eventually ruled ILLEGAL anyone who voted for it or pushed it should be required to seve the COMBINED TIME of anyone convicted of the same law.

Posted by: rodsmith3510 | Mar 5, 2010 1:34:02 PM

The charge was a tax violation, not a case of participation in the fraud of the spouse. She can read and write. She is deemed to have read the tax return. The tax return in no way reflected the family expenditures. She needs to plead wifey incompetence but I do not think that such a defense washes anymore. And I am not sure that such a defense is actually a recognized defense legally although it has had traction in the minds of those who prosecute, judge and sentence. Just sign here honey and go pick up the kids does not work anymore. Nor does the defense of the wifey who does not work in the workplace have traction with women who do work in the workplace and cannot accept the blind wifey defense.

Posted by: mpb | Mar 6, 2010 3:59:10 AM

Unless the spouse was active in the crime, I don't think she should be prosecuted. this is as bad as the cops going to arrest a drug dealer and arresting everyone in the house just to get him to confess to save his family.

Posted by: EJ | Mar 6, 2010 7:50:37 PM

that is JUST what it is EJ A PUT UP job to scare a citizen into turning over their property to the black hole that has become our govt!

cash goes in...BUT NEVER COMES OUT at least not in our country!

Posted by: rodsmith | Mar 7, 2010 2:34:25 PM

"Willful blindness in the criminal system is tantamount to actual knowledge if there are sufficient red flags to alert an individual that criminal activity is afoot," said Sharon Kegerreis, a Miami-based attorney and former federal prosecutor."

Well, that's scary.

Virtually every human being I ever met suffered from delusion and denial (willful blindness?) to one extent or another. Now it's a felony?

And creative aggressive prosecutors like Sharon should have no trouble finding "sufficient red flags" wherever they decide to look for them.

Because that's how federal law enforcement works these days. Start with an unpopular group, the designated villains of the moment, then work backward to match them up with any of the thousands of obscure statutes crime-demagogues in Congress keep cranking out.

Apparently Sharon believes wives who suspect their husbands of cutting corners at the office are duty bound to turn them in.

And of course if they don't, Sharon can hit them with an additional count of misprison as well as willful blindness.

Those tempted to cheer the persecution of wives of scammers should take a moment to consider that this amazing capacity to criminalize citizens at will could one day find its way to their door, too.

Posted by: John K | Mar 7, 2010 10:44:11 PM

The harder case would be a collusive divorce that makes a large award to the wife that would have priority in bankruptcy over many claims.

Posted by: ohwilleke | Mar 8, 2010 3:49:48 PM

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