Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

BITTER DIVORCE AND TAX EVASION -- MORE FUN TOGETHER!

May 08, 2008

One subplot of the Robert Beale tax evasion saga was the way his ex-wife ended up with his Florida house during his run from the tax man. It makes one think that fighting a divorce battle while evading taxes might just be too much fun to have all at once. A recent case out of Milwaukee supports that theory.

Ronald Miserendino was a successful Milwaukee-area real estate investor who didn't take his wife's divorce petition well. From the California Divorce and Family Law blog:

According to court records, within a month of the divorce filing, Miserendino secretly set out to liquidate his company's assets and go underground. The divorce court judge, John DiMotto, had ordered that all the company assets be frozen until the divorce was final.

Miserendino enlisted the aid of his son from his first marriage, Mark, whom he had made a vice president of Trace. Son [Cynthia Son, Mr. Miserendino's wife], who had been Trace's secretary, was removed from the company roster.

The effort involved taking out a bank loan for $5 million, a $500,000 advance on the company's line of credit, and cashing in Treasury bonds worth more than $10 million, according to court records. Miserendino gave the $5 million from the bank loan to his son. Mark got smaller cashier's checks and sent them to his father, who was secretly in Hawaii, where Trace owned a house and two lots.

The divorce was granted, and the court awarded Cynthia Son $5 million plus the family home in River Hills. But the money was gone -- much of it to taxes and penalties. But Miserendino also had converted nearly $5 million to cash and had stashed it in safe deposit boxes in Australia and in several states, according to court records.

This worked out poorly for Mr. Miserendino. Now the 72 year-old has been sentenced to four years in prison for tax evasion and money laundering charges arising out of the ill-fated divorce planning. The sentence also requires him to forfeit $750,000 property to the government for payment to his ex-wife, who was awarded $5 million in the divorce.

The Moral? Hell hath no fury like a woman scorned, but it's much worse if the IRS is on her side.

Links:

Plea agreement

Sentencing Document

      Bookmark: del.icio.us • Digg • reddit