Hacker News new | past | comments | ask | show | jobs | submit login
How to Hide $400M (nytimes.com)
399 points by scarmig on Nov 30, 2016 | hide | past | web | favorite | 257 comments

The more interesting question is what is the source of all this money?

Osterlund has a net worth of $400MM. His company, Xacti, geneated revenues of $75MM per year. The article explains that Xacti "sold banner ads, video games and various other kinds of software, including “toolbars” that promised to clean viruses off your computer or free up space on your hard drive." I don't think the article really explains how this malware could generate such huge amounts of wealth.

The company's website [1] is nothing short of pathetic. The NYT article does mention that Xacti had legal troubles and was investigated for some deceptive marketing practices (like default opt-in credit card charges for trial software). At best, Osterlund is an Internet con artist.

But this still leaves questions in my mind. Can a simplistic malware fraud generate half a billion dollars of wealth? This mystery is compounded with a maze of sophisticated offshore banking structures, which sounds like more than just a way to hide assets from his wife. For example, could these structures have been used for money laundering by organized crime? Was this malware used for criminal activities beyond simply asking customers to enter their credit card numbers and charging them a few dollars?

His wife was allegedly involved in his business, and is trying to get a share of his assets in divorce proceedings. If this money had a darker story behind it, that she knew of, she would have an incentive to leave that out of this NYT story.

[1] http://www.xacti.com

> Can a simplistic malware fraud generate half a billion dollars of wealth?

Absolutely. Traffic Vance was a great example of this. They installed adware on users computers and advertisers could bid on what sites you wanted your popup ad to display on and their adware would display your popup and charge you the money.

There are shady individuals who bid $10+ for a single popup on a site like StateFarm.com with a fake "rate comparison" and the infected user would assume that the ad was associated with State Farm despite the tiny disclaimer at the bottom.

On a site like CNN a shady weight loss supplement company might have a popup with a fake news story that pushes a misleading negative option subscription that is setup in a way where the infected user assumes it is a CNN story.

The adware itself is designed to be as subtle as possible so that the user is unaware that anything suspicious is going on and views these ads as legitimate.

Traffic Vance has since been renamed several times due to this type of scrutiny, are well past their glory days, and don't push their adware anymore. Despite all of that they are still making millions[1] from all of the people who have downloaded their adware over the past 10 years that still haven't deleted the adware or gotten a new computer.

[1] https://www.propelmedia.com/propel-media-reports-6-1-million...

Man, haven't heard that name for years. Traffic Vance and others like them were all the rage when affiliates were big on "CPV" (cost per view) traffic where instead of paying on a CPM rate for pop-up and pop-under traffic, they would pay for each view. The CPMs were actually pretty high in many cases, but when you think about the computer savviness of the infected users, the shady tactics affiliates would use, and the potential payouts, the math definitely worked out for many of them.

But even in Traffic Vance's case, I'm not sure that they have generated $400 million over the life of the company. Even at $6M/quarter in EBITDA, it would take ~16 years to get there. I'm not sure what else this guy was into, but I doubt he made it solely with malware.

That said, nobody actually needs $400M, and there are plenty of people making $1M+/yr operating useless websites like viral news, quiz sites, etc. There is a ton of money in online advertising. Most goes to Google and Facebook, but there are still billions left over for the "little" guys. The rise of retargeting through Adsense has enabled even the most worthless of sites to show ads that generate reasonable RPM. If you can generate impressions, you can make quite a bit of money.

> Even at $6M/quarter in EBITDA, it would take ~16 years to get there. I'm not sure what else this guy was into, but I doubt he made it solely with malware.

They have been around for 10+ years and are currently a shell of what they once were. They stopped promoting their adware years ago and that $6M/quarter is solely from all of the previously infected people who still haven't gotten a new computer. I would be very surprised if they didn't make considerably more than $400M over the life of the company.

Is there any literature on this? I always figured Google and Facebook dominated the market so heavily everyone else was left with scraps (twitter, for example).

Google annual revenue is $75B, Facebook annual revenue is $18B. The total Internet advertising spending this year is about $250B [1], and total advertising combined is $600B [2]. Google and Facebook combined account for only about 30% of Internet advertising, and 15% of total advertising.

They get the lion's share of attention because they're the biggest players, but that doesn't mean they're the only ones, or even that they own a majority of the market. People in general are not well-equipped to process the idea of a long-tail, where disparate players collectively make up a majority of the market but aren't identifiable as a single organization. By the numbers, there's room for about 400 $400M companies in the space of the online advertising market not claimed by Google and Facebook, or alternatively, for 1.6M sole proprietors who each earn a six-figure income on ad revenue alone.

Twitter, BTW, makes a very respectable $2B+/year in revenue. Their problem is that their cost structure assumes that they're going to beat Facebook; they're supporting 4000 employees with fat salaries & option packages on that revenue (Facebook, with 8x the revenue, has only 4x the employees). If they fired half their employees they could easily be profitable. And the company in the article probably has no more than a few dozen employees, hence its massive profitability.

[1] http://www.pwc.com/gx/en/industries/entertainment-media/outl...

[2] https://www.emarketer.com/Article/Advertisers-Will-Spend-Nea...

Actually, those guys make only a tiny slice of the value per click. Banner advertising is a low return game.

Now...if you control the landing page and conversion funnel, basically delivering paid customers (vs. clicks) to a paying merchant, your value per visit goes up by a factor of 10 - 50. $.25/click vs. $10 - $30 (varies by product).

Now imagine a company that launches dozens of offers with hundreds of variations and plows it's bankroll back into the best (most profitable) version (for years at a time).

Yeah, $400MM is possible.

You make a great point that advertising and ecommerce have no clear demarcation. Revenue for all online commerce is divided among layers of players performing specialized steps in the process, so any sizing of the online advertising market starts with an arbitrary distinction.

The biggest ever industrialised clickfarm/clickbait ring I've heard of was making around 100m in revenue in 2009, but they had thousands of "affiliates"

Do you have any information on this weight loss fake ad on CNN. I think my parents got this one.

I'd check out this story[1] on Jesse Willms, who made hundreds of millions of dollars distributing these types of products using an assortment of deceptive tactics.

[1] http://www.theatlantic.com/magazine/archive/2014/01/the-dark...

>Can a simplistic malware fraud generate half

"Surprise" billionaires are popping out of Eastern Europe/Israel/Russia/Russian concessions every year.

The guy who ran ebanners/advmaker was said to have lost $1.3bn when Cyprus seized deposits. Before he filed the case against the bank, nobody ever knew of the guy.

They are very good at hiding cash. All those dumb banking AML rules are kinda useless as the easiest way to launder money is to run your own bank.

Just back in 2013, ads for sale of "1 day banks" in UK/Ireland/Delaware/Cyprus were openly published in Russia's number 1 business magazine.

"the easiest way to launder money is to run your own bank."

What is this, I've never heard of it? Are there significant benefits?

>What is this, I've never heard of it? Are there significant benefits?

Nobody to block your transfer and freeze your accounts simply for the reason you look suspicious and you are suddenly transfering a 10 digit sum to a *stan country.

And even if a higher tier bank with whom your own bank has a correspondent account will bother to intervene (which is highy, highly unlikely), you and your moneys will already be far away from the sphere of influence of the civilised world thanks to the fact that transaction settlement is nearly 100% automated and instantaneous for top tier banks.

You severely and drastically underestimate the size of the "shady economy" on the Internet.

I used to laugh a little 10 years ago even when people said spamming couldn't be profitable. Spammer could e-mail the same million people every single day, and still get 8-12 $30 commissions every single time for months.

Expand that to even a low rate of 50M e-mails/day and you can see how profitable it can be.

And the "web spam" made the e-mail spam market look pretty much trivial in comparison - before you even get into the outright illegal stuff like hacking boxes and doing drive-by installs.

Matt Levine highlights [1] the discrepancy quite nicely:

[...] let the wife's lawyer describe them:

Oesterlund was “a highly successful internet swindler,” engaged in “internet scams, forgeries, tax fraud, bank fraud, HUD fraud, immigration fraud, fraudulent overseas transfers and other misconduct,” Fisher told a Florida judge. Or here's the wife's defense of the business:

“Every time you click on an ad, someone gets money,” she told me, shrugging. “We were the people who got the money.”

[1] https://www.bloomberg.com/view/articles/2016-12-01/mortgage-...

Both meebo and bitorrent (the company) made tens of millions through toolbar installs (though their operations were much more legit than this)

the article states he had a number of other businesses.

"Their earliest success was a direct-mail firm called Credit Key Express, which promised credit cards to people with bad credit. Later they started Columbia House-style online membership clubs that sold discounted movie posters, books, DVDs, even dietary supplements. Xacti, which came to enfold most of their ventures, sold banner ads, video games and various other kinds of software, including “toolbars” that promised to clean viruses off your computer or free up space on your hard drive."

all the money wasn't made from malware, it just created a slush fund for other profitable(albeit questionable) businesses to be started.

She would also have an incentive not to talk about it at all. Playing out the whole game so openly, especially with purely selfish interests, seems really strange to me, as well.

Halfway through, I started thinking, this piece is incredible marketing for the wife's attorney, Fisher. He's the only one really likeable character (the wife didnt care about defrauded customers, the husband was always the villain). Given that the money might never materialize, pitching an interesting, detailed, already researched article to NYT lets Fisher salvage some marketing out of a potential loss.

Don't underestimate greed. She wanted to have the money at all costs. The article says that she didn't have any issues taking money from other people. What's disclosed in the article is already shady, I wouldn't be surprised if she also knew of more severe business practices.

Yeah, agreeing on that. But do you see how it makes sense to do it publicly in the NYT? In her position I would try to keep the shady business in the dark.

Money perhaps? She still didn't get anything from the settlement. Maybe she hopes to either speed up the process or she got some money for the interview.

That is a rather interesting theory.

> Xacti, which came to enfold most of their ventures, sold banner ads, video games and various other kinds of software, including “toolbars” that promised to clean viruses off your computer or free up space on your hard drive.

Sometimes I can't tell whether I'm an ethical and honest person, or whether that's just an excuse for not being rich.

> By his wife’s account, some of Oesterlund’s new friends also began tutoring him in how to minimize his taxes.

That reminds me of how cheating in video-games spreads like a disease, socially-transmitted. [0] People enter into sub-groups where the behavior is seen as normal.

[0] https://arxiv.org/abs/1112.4915

> Sometimes I can't tell whether I'm an ethical and honest person, or whether that's just an excuse for not being rich.

LOL. I ask myself this question every time. I look back at my life and wonder, was there any chance I could have screwed someone and got rich. Did I pass up on that opportunity?

Paul Le Roux is a case study of why not - https://magazine.atavist.com/he-always-had-a-dark-side.

I've skimmed the link, but I'm still a little unclear: Why not what?

I interpreted it as 'why not to lose your ethics and pursue richness in questionable areas'

Always? Without reading the article, sounds like confirmation bias.

> Like many women married to very wealthy men, she didn’t know much about the family accounts.z

Makes it sound like she married him for the money, but she didn't[0]. While it turns out she really didn't know much about the accounts[1], she help start the businesses that made the money[2].

[0] > Robert Oesterlund wasn’t born rich, either. When Pursglove first met him, on a cruise ship off Helsinki in the ’90s, he ran a struggling flower-import business.

[1] This is truly stupid. In a marriage, a couple should share completely all of this information. Otherwise, do not get married.

[2] > Living in Florida and New York, they started a series of companies. Oesterlund came up with most of the ideas, Pursglove would later state in court filings, and ran the companies day to day. Pursglove hired the employees, trained them and helped manage the offices.

I think that $400 million could be a lot more complicated to handle than most family accounts, especially if the family was aggressively trying to minimize their tax liability, which they were. And the finances really started to get complicated because the husband started to hide the money when Pusgrove found out about the affair. Also, the legality of the business is questionable. It looks like the money was made from adware. So I would not expect Pusgrove would want to take much credit for the management of the company.

Surprised actually. If she really did run the company "day to day", seems like she would be in a position to give him the boot (grab the accounts) vs. what actually happened.

1: There is a limit to how much you can be completely involved. There are many parts of our household that are opaque to me, and as I trust my wife, it's just not worth the time, energy, and effort to look over her shoulder on them.

> In a marriage, a couple should share completely all of this information.

I disagree. Couples are allowed too be financially independent. Leave the information with your lawyer in case of death or accident? Sure. But not necessarily have joint management.

[1] Rarely happens especially in the boomer'ish generation. Many stories of widows who are left with millions after the husband passes away, but has never been involved with managing the money. All too often, she is taken advantage of by "financial advisors" who swindle her through steep fees or worse.

A fraudster-millionaire shares a fictionalized account of her side of a soap opera story too wild for television but just right for NY Times magazine

A recently arrested colonel of the Moscow anti-corruption police had $100M+ in cash in his apartment (i wonder - may be he just was working from home much?). Another $300M+ were in his bank accounts because I guess they just couldn't fit into the apartment - Russian city apartments are typically on the smaller side... I mean it is really hard to hide giving that $100M weight ~2000lb in $100 bills.

...or you know, it was planted.

Planting a 1.5 ton of cash? Wouldn't a 100kg do it or even just a bucket of cash?

In Russia, all high official positions are up for sale. Posts are bought and sold. The amount of money he spent to amass this much during that short career, must've been even bigger.

> In Russia, all high official positions are up for sale.

This is outrageous and patently false. No society in the world operates this way.

>No society in the world operates this way.

But Russia does

Come on.

I have never been to Russia or studied the political structure in a systematic way. But I can still assert that this is patently false.

If it were not, the oligarchs would have absolute control, as it is they writhe (rightly, imo) under the jackboot of Putin. What about local regional and ethnic interests and loyalties? How do you account for state security and other sensitive sectors if you sell all your positions to the highest bidder?

A society run like you imply, would soon collapse. Competing money from oligarchs,the mafia, foreign intelligence agencies, rich corporations and so on, would rip it apart.

I get the western obsession with Russia bashing but HN readers should have a higher standard.

>A society run like you imply, would soon collapse.

Yes, and it did

$100M+ cash? I would assume there are better places to hide that, than in MOSCOW, RUSSIA?

How about.. a vault?

People may notice if you start renting a large vault at your local bank. And flying it out will be hard, he'd have to justify why he has to rent a private jet to some small island nation.

Does a dollar even have value in Moscow? What do you do with that cash, exchange for roubles?

>Does a dollar even have value in Moscow?

a dollar - not really. A ten thousands can get you through a night at a not the worst club though :)


in English http://rbth.com/politics_and_society/2016/09/13/head-of-russ...

(my mistake actually - it was $140M and "According to the REN TV channel (in Russian), the money weighed about 1.5 tons: ")

Most of the related news are in Russian, and especially the humongous body of jokes about it - even for Russia, it is a bit out of everyday experience. I mean it is just a colonel and it makes any Russian FSB or police general who has amassed only bare tens of millions (or even just millions) of dollars to look like a complete professional failure.

Interesting. BTW (if credible) this would seem to be pretty candid revelation for a government-affiliated organ like RBTH to make:

According to Gazeta.ru (in Russian), the colonel lost his “protection” after the recent senior reshuffle at the FSB’s economic security department: The influential patrons he used to have there were removed, which allowed the FSB and the Investigative Committee to move in on the colonel.

it isn't exactly revelation. The domestic fight (basically for the control over Russia's economy, especially "grayish" parts of it) between FSB economic security dept (when it was taken over by new rising faction inside) on one side and economy/corruption related structures of police/Interior Ministry/Investigative Committee on the other side has been going pretty much in the open for about 3 years with FSB clearly (an not surprisingly at all) winning. During that time there have been a number of high profile arrests, including for example the head of Internal Affairs of the Investigative Committee together with some other high profiles there several months ago - that brought the Investigative Committee onto the side of and under the control by FSB.

The opening salvo of the war, like a comedy setup, was when the 2 opposing teams - FSB and the other side - tried to setup and arrest each other for bribery in a restaurant with the FSB team succeeding http://www.newyorker.com/magazine/2015/07/27/the-double-stin... which immediately led to the arrest of the head of anti-corruption department of the Interior Ministry - general Sugrobov - and his deputy general Kolesnikov.

In case you're wondering, most firms in this business won't even talk to you unless you're looking to hide at least $10MM. Below that amount, the costs of setting up the corporate structures and paying all the necessary parties aren't worth it. It is kinda funny there is a practical cut off point for being "super-rich" at which point the rules start working for you.

If you're looking to hide $10MM+ with one firm, then diversification says that you have a lot more than that in total. So imo the "super-rich" cutoff is around $100M

I'm not sure that you need to diversify for that. It makes sense to have one really good lawyer who knows how to distribute it. The money will end up in different countries, trusts and with a number of partners. But if you don't want to deal with the complexity yourself, you likely need to have one expert who does. That's also why you need so much to start, it's not just about setting up one company, it's about creating a whole net of companies .

and you know this how?

Your question is not much helpful. You are not in a position to question the parent poster about his knowledge or practices. His host country does.

Many HN contributors are high-profile individuals.

I don't really understand why someone would not just stay with $200M without hassles, instead of hiding $400M. The value of money is logarithmic. What can be bought with $400M that cannot be bought with $200M??

If it were a case of wife wanting 99% of his assets, it would be reasonable to fight. If I lived some of these FoaF stories where the husband is wiped out, then I'd rather go to jail (and profit from an MRA blog some years later)

To many of us, money is a tool. You convert time and effort into money, store it, then convert it back into other things when necessary or desired.

To many others, money is a high score.

There are quite a lot of things that can cost a meaningful % of $200M. Artwork, property, vehicles (planes, yachts, expensive cars), upkeep and potentially staff for all those things, etc. The impact to your net worth is thus 50% lower if you can double your net worth.

Also, if you get to that level, I imagine there reaches a point where those things become much more realistic to obtain, and your expectations for your earnings go up. Why settle for $200M when you can have $400M like your friends? Why settle for $400M when you can reach the three comma club?

> What can be bought with $400M that cannot be bought with $200M??

More money. Example...OPEC negotiated a deal today to cap oil output. If you are into trading futures or ETF's related to oil, you stood to earn roughly 8%(3x ETF's could pay 24%) of your investment. 8% of 400m is nicer than 200m.

Though that's not related to being rich. You can participate on that market with less than $1k. If you knew that they'd reach a deal (many people thought they wouldn't), you didn't need $200m to play that game.

You don't get to be the kind of person who has $400 million by writing huge checks to make people go away.

Sure you can.

Here's an example of someone who hand-wrote a $975 million check to make his wife go away:


> I don't really understand why someone would not just stay with $200M without hassles, instead of hiding $400M.

Pride. It's not about the money, it's about "winning".

Near the end of the article it said that they were finding out he may not actually have the $400M after all (It was just a claim to get a loan), or that has lost/used it all up over time during this case. Then he will have to prove his real hidden wealth, along with how he did it, otherwise risk paying out the $200M that he may not even have.

It's probably more about sticking it to the wife than the money. That's why a lot of people spend a fortune on divorce attorneys to divide up things that neither party actually wants.

I don't really understand why someone would not just stay with $200M without hassles, instead of hiding $400M.

I think like you and I believe this is why you and I will never be billionaires.

There is always something bigger and better and more expensive. Always.

I actually don't think it would be a crazy strategy to focus a business on the extremely high end of the market. I always think about the person who offered a $1m travel tour to each UNESCO world heritage site. Free to offer the theoretical tour, and charge enough that you can worry about the details later. Only ever skim-read about it, but I believe he got a taker.

What can be bought with $400M that cannot be bought with $200M??

Four movie studios instead of two! https://en.wikipedia.org/wiki/Korda_Studios

If the value of money is logarithmic, then going from $200M to $400M would be identically valuable to him as you doubling your net worth; I'm sure you'd like to do that.

Are you referring to the divorce or the taxes?

In terms of taxes, if you are hiring all those people, banks and lawyers to deal with it for you, I do wonder what the actual amount of hours it takes for this person to manage things. 3 hours a week? Slightly more or less? I wonder what the return on that time works out to be.

The article also alludes to the fact that most of this stuff seems to be in a legal grey area, like driving over the speed limit or something.

Note that he describes the US as "the country of Evil".

It's motivated by a revenge-like emotion, rather than necessarily reason.

Let's say you think you can earn 3% real after tax (big assumption but let's use it), the difference between $200m and $400m is $6m and $12m a year of annual spending power. If your boat costs you a couple million a year, and your plane the same, $6m is really not going to cut it...or it could just be spiteful...

Why $200M?? What not just stay with $100M? etc...

Staying with 40M of 400 would not be acceptable because then the log marginal value of money is one level smaller. Would need to trade that jet for a turboprop, etc.

love can be ... bitter

There's a word for it - hubris.

Trump has some kind of airliner. I'd want a modified B2 for mine. Low profile. Know how much those cost? ;)

Fun fact, Trump bought his plane from Paul Allen. It's an aging gas guzzling Boeing 757, quite costly to fly.

At current oil prices it's likely that the decision pays off. He'll not fly the plane on a daily basis (post-election) and even many airlines are putting back new orders because old machines are overall cheaper at current prices. 20% less fuel for an expensive plane doesn't pay off at $50/bbl. And they probably fly at least 10x the distance of the Trump plane.

He didn't buy it at current oil prices or for rational reasons. It was an emotional buy in the past likely connected to ego. That it's a hand-me-down from a more successful businessman is where it gets funny for me. He finally topped him by riding in the more exclusive plane they all want.

Cool story, but he bought the plane from Allen in 2011 when oil prices were about double the price today (it averaged $111/bbl for the year).

Trump bought it not because of oil prices, but because it was huge (among other things, Allen used it as the team plane for the Seahawks).

Didnt know it was a hand me down from Paul Allen. Wow. That's funny given Trump's ego and sense of being Number 1.

It's a lot cheaper to install some gold plating on an aging airframe and pretend it's the best (it was built in 1991).

"install some gold plating ... pretend it's the best"

Is that Trump's trillion-dollar infrastructure plan in a nutshell?

I got stuck part way through. "She packed the laptop and documents, left her suitcase near the front door and went for one last walk on their beach." then a couple of lines later "When she opened her suitcase at the security line, there was no laptop. No paperwork. It was all gone."

But then the subject changes, timeline changes and I can't find what ever happened to the laptop.

They return to it later:

> That was when — and why — Fisher dispatched Pursglove to the Bahamas: to gather clues about where the money went. When Pursglove returned to the house to confront the caretaker that day, she told me, the caretaker admitted removing the papers from her suitcase. Bahamian police took custody of the papers, but later, and for reasons they never explained, handed them over to Oesterlund. When Fisher tried to subpoena the papers back, Oesterlund’s lawyers said he could not find any such documents; in any case, they wrote, Pursglove had no right to “stolen” materials.

The article alludes to the fact the caretaker or the older gentleman removed the laptop and documents, or someone else in the employ of the husband.

Was a bit confused by that. The way both of them are described I'd guess that they're not the nicest employers. If your employer is far away, probably doesn't pay you very well, why show such loyalty to prevent that from happening? The husband probably hadn't found out about it otherwise.

Search for the paragraph that mentions "Bahamian police". Sounds like someone got bribed.

Note that the transfer pricing strategy only makes sense for this fellow because he's not a US citizen/resident. If he were, it would be illegal to not report the income of the (wildly-profitable) off-shore entity. And if you have to report the income on both sides, there's no point playing transfer pricing games.

But due to his foreign residency and citizenship, he only has to report the US-based income to the IRS, and the transfer pricing shenanigans are "legal" but subject to repricing by the IRS.

If the entity is in an irrevocable trust, and the trustee is a 3rd party, and the beneficiary is this fellow, taxes should be deferred as long as the profits are not distributed out of trust, no?

you can keep the money off shore and pay the taxes later though, no?

Not for individuals — US taxpayers have to pay tax on their worldwide income, though they can get credit for foreign taxes paid to other governments. When the income is received by an entity in a tax haven, there is generally no credit to be had.

Speaking generally, if a corporation is owned by fewer than 10 US taxpayers, there is no effective deferral. This is based on the assumption that closely-held companies are being operated at the behest of the owners and will be structured in a way that is tax efficient for the individual owners.

Public companies are not subject to these rules, and they can defer paying tax on some types of income.

yea i was more thinking of "earning" it and keeping it in the entity until its needed or wanted. that would allow you to defer taxes, yes? i was under the impression that it is not income until its paid to me as salary or dividends, that could be wrong though.

That's not how individual income tax works in the US, only corporations get that special pleasure.

If you're not a US citizen, yup.

Interestingly, the couple might not be worth anything near $400M, and they haven't yet cracked the trust.

If I had to guess, I'd assume that everything was bought on credit, and the true net worth is somewhere south of $40M.

Oesterlund's yacht the "Deja Vu" is practically a major character in this whole story.

In case you're wondering here are some pictures of the Yacht. Keep an eye out for the gaudy paintings of Oesterlund in the yacht.


and by the way, all vessels over a certain size are required (by international maritime law) to have an AIS transponder fitted and enabled.. and there are internet sites which listen and post information, so we can see that Deja Vu is currently marked in Fort Lauderdale

though it seems that it has now been renamed as 'Broadwater'


so perhaps has been written out of this story..

Actually $400m is quite easy to hide, if denominated in $100 bills. It would fit in a small 1-car garage. You could squeeze $1B in if you had a regular 2-car garage.

Souce: http://thehustle.co/how-much-is-a-billion-dollars

Means you lose ~2% per year (inflation) and have a problem if new notes are issued. Also, if anyone finds out your money is gone very quickly (or if the garage burns down). I'd rather buy some precoious metals. Easier to hide, although the weight means you have to be careful where you hide it.

> You’d need bubble wrap so the money would’t flop around during the exchange.

Best thing I read all day.

So basically, shady fraudster millionaire engages in more shady fraudulent activities, and takes steps to avoid any repercussions from illicit behavior. Not shocking at all.

Not completely. It's more like seemingly righteous woman seeks compensation for hard work she did together with her soon-to-be-divorced husband, but no, actually both are fraudsters that now try to fraud each other.

This looks a more readable and entertaining version of this academic journal: http://www.emeraldinsight.com/toc/jmlc/19/1 ;-)

Will definitely be checking this article out in full. The techniques are of particular interest to me. It might sound exotic to outsiders but I do like the suspension of disbelief that kind of comes along with fantastic wealth.

I've used "hide vast sums of money" as the basis for a long, serious screenplay based on the Enron downfall of the early 2000s in the US. Currently in review for edits. If you'd like to read I can make it available by request.


You don't have an e-mail address in your profile, else I would have used that instead.

As someone who works in finance, and has a keen interest in how the murky side of that world works, I'd love to read your screenplay.

Ack yes about that I tend to use Twitter as the fence to connect then will provide email/DropBox link. If that's not a path for you I can say it'll be public early in 2017 I think.

A very interesting question about divorce asset-splitting:

How are assets split if the woman (in the above story) cheated instead of the high net worth man and the man filed for divorce? Who gets what?

Depends on jurisdiction, but I believe with no-fault divorce laws, typically it doesn't play a role.

Typically, cheating is not a factor.

No wonder marriage is a shit deal. If love is the only thing uniting us, in a fall out, love should be the only thing that is lost.

Sign a prenup if that's your deal.

This puts me in mind of Bleak House https://en.wikipedia.org/wiki/Bleak_House. It sounds like the legal manouvering has entirely consumed the value of the estate.

I didn't quite understand this bit, where she discovers all these papers and laptops full of important documents and then just leaves to take a walk!

i'd just pack my stuff and leave the country the second i'd transferred the money offshore.

once you're a resident of another country you only have to share your wealth with the country you move into.

Walter White, are you there?

The story does not add up. What kind of person decides to go on a "beach walk" after finding documents that says their husband is worth 300M dollars? My reaction would be to get the document, and at least take a picture, and get the fuck out.

People respond in different ways in highly stressful, shocking situations.

I have a "flight" response in high stress fight or flight situations, and can empathize with her response.

Good argument. People do irrational things. But still, it's smart to assmue that taking pictures of interesting documents never hurts. I'm not worth $10k and already do it regularly.

Shocking? That's unbelievable, as in I don't believe her.

she was at her own home...

> In any given year, trillions of dollars sit safely in the offshore financial world, effectively stateless, protected by legions of well-compensated defenders and a tangle of laws deliberately designed to impede creditors and tax collectors.

This. I always worry that if/when I get married -- in California where the Divorce laws are heavily in favor of the woman -- that I will be middle-aged, penniless, and will have to start over in my only known career (software development) that is brutally ageist.

So my sincere question (not trolling) to HN peeps. Are there any such banks / off shore options for the 99% not-so-wealthy crowd, whereby I could "squirrel away" just a few 1000 $ (maybe like 40, to 50K) so that in my worst-case-scenario, I don't have to start from 0. I understand there is no incentives for the "well compensated defenders" since the $ amount of such accounts won't be in millions, but surely there must be some countries / banks that offer this?

(NOTE: The intention is more to safeguard my individual future from a bad marriage and divorce and not greed. Hope you understand).

Thank you!

This is premature optimization. The California divorce regime is "community property", that is anything not covered under a prenuptial agreement is divided 50/50. A visit to a men's rights website will unearth horror stories of abusive alimony decrees but these anecdotes are unrepresentative outliers.

A prenuptial agreement would safeguard you more than attempting to hide money overseas. Another safeguard would be to marry a person who wouldn't be eligible for alimony due to preexisting income.

I consider this sort of optimization to be an inaccurate threat model, focused on outliers rather than the expected case. The expected case in California or any other state would be that the marriage would survive if not flourish (the most common case for upper-middle-class marriages), with a contingency that a divorce would occur amicably (the second-most common case). Screening for contentious attitudes is part of the due diligence of dating.

(only on HN would I ever expect to post something like this instead of the common-sense "find the right spouse and work on your marriage and you won't have to worry about this issue")

You're sorely wrong. Divorces in several states, California included, are like mutually assured destruction with one side having twice the firepower, and everything about a relationship can change in a divorce.

To OP: you don't have to hide your assets in offshore accounts, you can talk to an estate planner and look into setting up a trust (google domestic asset protection trust) and make yourself the sole beneficiary. You would no longer "own" the money and it's protected in a divorce.

Also prenups are typically worthless in the madness that is family court. Never ever ever rely on one.

Almost everything you wrote is factually incorrect. Prenuptial agreements are upheld 99.999% of the time; it is the extremely rare case that a prenup is voided, which is why such situations make the news.

Also, in a community property state like CA, all assets acquired during marriage are presumed to be "community property" of both spouses, unless there is a prenuptial agreement specifically describing the ownership of assets acquired during the marriage using a spouse's individual and separate pre-marital assets (i.e., pre-marital savings). Thus, an estate planner could not do anything to help you in this situation.

Don't be an armchair lawyer if you don't know what you're talking about.

I personally know two folks where the prenup was partially voided. It didn't make the news and these guys were certainly not wealthy by HN standards.

Do you have some research on the topic? I'll admit my assumption has always been they are more or less worthless due to my anecdotal direct experience, and I've even had a family law attorney in my state make comments that also led me believe this was the case.

> Also prenups are typically worthless in the madness that is family court. Never ever ever rely on one.

Are you saying that prenups are worthless in the case of child support or that prenups are worthless in all cases? In the case of child-related issues, you're right. However, in the case of dividing assets, I think you might be mistaken.

I've read stories of super wealthy people with prenups who did not get screwed; i.e., the prenup held up. The best example I can find is a certain billionaire who got divorced, but I cannot mention his name without creating irrevelant political discussion. He had an ironclad prenup and it held. That's the point I want to make. Prenups still work.

>I've read stories of super wealthy people with prenups who did not get screwed

That's because we (the USA) have a two-tiered legal system.

> The best example I can find is a certain billionaire who got divorced....

lol would that be by any chance XXXXXX XXXX ?

> you can talk to an estate planner and look into setting up a trust (google domestic asset protection trust) and make yourself the sole beneficiary. You would no longer "own" the money and it's protected in a divorce.

Thank you for this real and actionable advice.

I found this article, and according to it, California does not allow it. I guess I'll have to move to 1 of those state? Not too bad lol. http://www.forbes.com/sites/ashleaebeling/2016/07/06/compari...

> with a contingency that a divorce would occur amicably (the second-most common case).

Is that the second-most-common case? I haven't seen a single amicable divorce amongst my friends and colleagues. The level of nastiness has been different, of course, but it's never been amicable.

Given the profound downsides that I've seen, I think that a prenuptial agreement is mandatory for anyone who chooses to marry in our era. Otherwise you're just going for the standard 'prenup' — and like the standard deduction on your taxes, it just ain't sufficient.

Dammit. While researching for some hard stats on this, I performed several Google searches containing the keywords "California divorce". Now I'm already getting divorce ads. Which my spouse might see. Better explain this one now before it becomes self-fulfilling ;) !

Can you clear it on this page? I've used it before to clear out "temporary" interests.


You should be able to opt out of OBA ads by clicking on the AdChoices icon at the top of your display ads a little "play button", typically. Another, possibly less effective, way to do this is to clear your cookies. Then the "ad networks" will have to find another way to identify you and stitch your cookies together.

Another great reason to have an ad blocker.

That's what incognito mode is for. My cellphone provider is Cricket Wireless, and just leaving out the ".com" had Google showing me cards for cricket games for weeks on my Android.

Now I only ever visit Cricket's website in incognito mode.

Ads could be targeted by IP.

Uhh considering how divorce rates are near 50%, your assumption of divorces occurring amicably as a second-most common case would heavily depend on what portion of that 40-50% _does_ actually end in a friendly manner.

Let's be extremely optimistic and say 80% of divorces occur amicably.. that would give us ~10% odds of a nasty divorce--which I would not chalk up to "outliers"

~50% divorce rate is dated information, it's much lower and decreasing [0]. There's also the fact that the divorce rate amongst the college-educated (which I assume includes the software developer in question) has always been much lower. Something else that throws off divorce statistics is serial divorcers, a significant cadre who have divorced two or more times.

[0] http://www.nytimes.com/2014/12/02/upshot/the-divorce-surge-i...

divorce rates among upper income, educated folks is low. . . closer to 10-20% range. . . and to be fair some matches are just plain bad or green card marriages.

That wasn't the point of my post.

My point was that, no matter how you fudge the numbers, it's impossible to chalk up bad divorces as outliers. Outliers are defined as 3 standard deviations from the mean in a normal distribution, so the parent was implying that bad divorces occur at a rate of 0.1% or less--which is off by at least one order of magnitude.

> Outliers are defined as 3 standard deviations from the mean in a normal distribution

I kind of agree with your overall point, but that definition is wildly incorrect.

Hey there, my green card marriage is coming up on 18 years strong..

that 50% thing is not really true any more. http://bestdivorcelawyer.co/family-law/divorce-rates-higheri...

> find the right spouse and work on your marriage and you won't have to worry about this issue

Because, unfortunately, it is way too easy to give up on a marriage[0] instead of trying to work it out. Marriage takes effort.

[0] Preemptively, because surely someone will reply about it: If a spouse is getting beat, they aren't giving up on their marriage if they leave; they're protecting their life.

>> "...horror stories of abusive alimony decrees..."

[0] is IMHO a fairly evenhanded (and comprehensive) treatment of divorce outcomes by state, partially written by an MIT CompSci professor.

It was an eye opener, and I wouldn't call it a men's rights website.

[0] http://www.realworlddivorce.com/

You shouldn't wear a seat belt or a helmet, you should make sure your skills are the best and you should really choose the best bike!

Shit happens, thats why we have audits, contracts and airbags and why many people avoid driving motorcycles vs. cars. There is stuff outside of our control and to get rid of unnecessary risk is a benefit in itself.

> find the right spouse and work on your marriage

Why buy car insurance? Just find the right car and work on your driving.

Wait a minute. Liability insurance is not for you, it's for all the other road users. The rest of the world won't put up with you being uncollectible when you cause damage with your vehicle, yet meanwhile reaping all the benefits.

When you buy comprehensive insurance (or any other-than-liability) it is for your benefit, and sometimes also for your lender's.

The grandparent's analogy is perfectly apt. There are two reasons to get liability insurance for your car: To protect yourself and to protect society.

Suppose liability insurance was entirely voluntary and not required by law. Would you get it? I'll bet you that most people with good income or significant assets would still buy it, just like people buy home or fire insurance even when not mandatory.

Stop caring about nonsense stuff.

If I were you I will go to an extremely inconvenient experience with my girlfriend, like for example crossing the Atlantic on a small rented yacht or camping for a serious amount of time without the comforts of civilization. I have done this myself and it is extremely useful.

Your priority should be to know the other person as fast as possible, her priorities in life, her deep beliefs(and she doing the same with you). Not what she says about herself but how she is, how she behaves.

With hard experiences it becomes orders of magnitude faster than in normal life, in which acting-faking-posing is possible.

This way you will marry the right person. Even if the relationship breaks you don't need to be enemies. I had a lot of girlfriends in my life and most of them continue being part of me. If they need help I will help them without a doubt, but most of the time they are the ones that help me.

You are seeing a relationship as a liability, but a great relationship is a big asset by itself. It provides much more than the sum of the parts.

By being extremely afraid, you are not living your life in the important stuff, and you are not risking anything, so you are already losing.

>>If I were you I will go to an extremely inconvenient experience with my girlfriend, like for example crossing the Atlantic on a small rented yacht or camping for a serious amount of time without the comforts of civilization. I have done this myself and it is extremely useful.

Unless you plan to spend your entire married life on a small rented yacht, it's a silly idea to use it as a "trial run" for marriage.

I've seen similar practices backfire many times. What happens is that the adversity of the adventure brings the couple together and helps them bond, but when they return to their regular lives they grow resentful of each other because they no longer have the Adventure Stuff to distract them from their actual issues.

I think the idea is not to do something adventures but something monotone and boring.

Congratulations, but not everyone is as great with women as you are.

Sorry to break out the bad news to you.

Every thing sells for money. Its just the figure.

If what the person wants from you is big enough. None of your on-the-yatch evaluations will even matter.

They will want that divorce, take that alimony and move on.

Love that approach. Any literature, message boards or similar places that you can recommend?

1 - Get an attorney and arrange a pre-nup and all these issues go away.

2 - If your masculinity can stand it, find a bright intelligent high earning woman for a partner. Who knows, she might owe YOU support in a divorce!

3 - Foreign bank accounts have tax implications, like FACTA reporting compliance during tax reporting. Your tax preparation bills will go up... unless you plan on keeping these accounts secret from the government? Then hey, here's a felony tax evasion charge for you! Say Hi to Wesley Snipes for me.


4 - You may wish to think about a vasectomy before marriage. In many cases, the woman has physical custody of the children so the husband has to pay her support for rearing his kids. This is why the law appears to favor women. In truth the law favors kids not being financially abandoned by their fathers. Anyway, you can prevent having to pay for children by not having any. A vasectomy is the best solution for remaining financially sound.

Marry someone who isn't dependent on your income and doesn't want to be. Get a prenup so it stays that way. End of story.

"By all means marry; if you get a good wife, you'll be happy. If you get a bad one, you'll become a philosopher." --Socrates

And they say romance is dead!

A relationship that's based on things other than money is unromantic?

Is "you get half my assets" really the height of romance?

My vision of romance is more like "I love you for who you are, so I give you everything I am, and everything I have, until death do us part". Corny and old-fashioned, but that's me.

Old-fashioned romance is a financial agreement. "marrying for love" is a modern innovation, not necessarily a good one.


And before you say "well you can always see the signs"...sadly, no, some people are really good at hiding it.

Sorry, I'm not sure what you mean.

Er, pardon my confusion, but I have no idea what that has to do with my comment.

At least in the terrible romcoms my wife makes me watch, people just marry someone they love. They don't ask "what's my exit strategy when this marriage inevitably fails?".

It's a good idea to prepare for risks even if they don't have a 100% chance of occurring ("inevitable"). Your point stands that preparing for a non-zero chance of relationship failure is certainly "unromantic" in the traditional sense, but it might be a wise move anyway.

Knowing a breakup would have a lot of painful consequences encourages me to focus on making my marriage work. Carrying a "get out of jail free card" would me make more reckless during arguments, this increase the chances of failure.

What's missing from this thread is the psychological effect of breakups - on you, your ex-partner, your children, your friends, etc. A prenup doesn't wave away all that damage.

> Carrying a "get out of jail free card" would me make more reckless during arguments, this increase the chances of failure.

This is interesting. Does wearing a seat belt in a car equipped with airbags make you drive more recklessly? Does wearing a helmet make you bike more recklessly? This may be true for some people but not for me. None of those countermeasures claims to guarantee you'll walk away without a scratch if the worst happens - they are designed to mitigate damage.

I'm sure it's not a perfect analogy - none are - but what do you think?

I honestly can't say. There are quite a few studies that suggest prenups make divorce more likely, but probably those more likely to get divorced are more likely to get prenups.

I would turn your question around. How much does your potential loss from an event affect how hard you try to prevent it from happening? My guess would be the greater your loss, the harder you'll try.

When in the midst of what feels like an irretrievable situation, knowing that you stand to lose economically can make you go back and work on it - and that's usually a good thing. That's my personal experience, but I'm sure it's not true of all people in all relationships at all times.

True - the greater the loss, generally the harder I'll try to prevent it. However, I'll make just two observations.

One: of course the potential loss from a divorce is often not equal for both partners, meaning on some level they may - to your own point - be unequally incentivized to prevent a break-up.

Two: In some unfortunate situations it may not matter if you try even harder to prevent a break-up if your partner has made up their mind. Or, if you stand to lose more, concessions can be squeezed out of you in an unfair way. Obviously you do your best to avoid a partner that would do anything like this, but in the end you can't be sure for a variety of reasons.

If I understand you correctly, you're saying that one party may do fairly well in the absence of a prenup, so is actually more likely to breakup rather than less.

That's a good point, and not something I'd thought about. Perhaps as I'm not very wealthy, these questions are so hypothetical that they sound a bit ridiculous to me. If I had a £200 million in the bank I might be more inclined to worry, no matter how in love I was. More money, more problems!

It's been shown that a biker wearing a helmet makes car drivers more reckless.

To clarify, did you mean riders of bicycles or motorcycles? I would expect the same effect applies to both, in any case.

Put into any bank or brokerage account in your name only now. Don't commingle with community funds when you get married. Separate property remains separate -- it's what you acquire and earn during the marriage that's considered community property. If still worried, get a pre-nuptial agreement before taking the plunge.

To those young-uns worried that asking for a pre-nup might upset your potential future wife: it's much better to see what kind of personality she has in a controversial situation now rather than 2, 5, 10 years down the road. Sometimes it is only under stress where a person reveals their true personality, and believe me you are going to encounter stress during marriage.

Not only that, the terms you propose in the pre-nup give your potential wife a very good indication how you value the effort of child-raising and her career that she will give up for you (it's still usually the wife that follows her husband). Then she can also make an informed choice.

"a very good indication how you value the effort of child-raising and her career that she will give up for you (it's still usually the wife that follows her husband)"

Is that still the trend these days? Are most couples able to afford to only have a single working parent anymore?

What you usually see is that one spouse (the wife, usually) spends time with the children when they are very young and then works part-time. Obviously, that impacts career progression. Salary data would support the theory. It's not a single working parent, it's 1.5 working parents for a few years.

I suspect you are right. Now that I think of it, I actually recall hearing a podcast on this (Planet Money? Freakonomics?) where they dissected the statement around women only earning something like $.75/dollar compared to men. I believe they found that if you looked at earnings before having a child, they were equal, and that the reduced earnings came from taking time off or sacrificing workload (and presumably total contribution) for flexibility. This then resulted in not advancing as rapidly as say, someone putting in twice the hours, or who did not take several years off and thus has that many more years career experience, despite being the same age.

Cases where wife follows her husband in job-related relocation are more common than the opposite, and they are typically detrimental to the partner's career.

Spot on.

While the laws may be awful in California and you should always seek to make reasonable and prudent financial decisions... if you have a spouse in mind and this is still weighing on you then you're probably not ready to get married.

Also if you have a ton of money go talk to a financial adviser or do some more research, there's many ways to protect your finances from a number of scenarios that don't involve skirting the law. You'd likely have to disclose offshore accounts in the scenario you're imagining so you'd either have to lie -- which is illegal -- or it would all be wasted effort.

Generally if you're ready for marriage, the question you should be asking yourself is in the event of death, sickness, and yes divorce, how do I ensure the well being of my spouse and kids?

If you're asking how do I protect myself in the event of divorce, you yourself are not ready for marriage.

If this is truly a concern of yours, I would suggest not marrying.

Or living together. Thanks to government, in most Western countries (including the U.S.) even living together binds you to the same or almost the same contract as marrying.

> in most Western countries (including the U.S.) even living together binds you to the same or almost the same contract as marrying.

Correct. This is such a terrible thing. I'm coming up on 6th year of living with my girlfriend and I am told that California is also something like this... i.e. if you are living together for 7 or more years (maybe 10, not sure) that it's as if you are married. Terrible!

This is incorrect and is a common myth being propagated recently. States don't have a defined time period. It's up to the parties to make a claim in a court whether they are reasonably married (looking at correspondence, documents, etc.)


How does this work with same sex roommates in states that allow same sex marriage? Or even simpler, what if a male and female live together as roommates?

I've never heard of this. Someone can actually be entitled to half of your wealth just for living with you...?

If you live together long enough. Common Law marriage or something...

Common law marriage is only a thing in eleven states. It requires the couple to present themselves as married.

Australia and Canada have common-law relationships that aren't marriage but do involve dividing property in courts.

Buy bitcoin with cash every month on LocalBitcoins. Store bitcoin wallet keys somewhere safe, offline, in at least 2 geographically separated places.

This. The asset has a very minimal presence in the physical world (just an encrypted file that is your wallet) so it's pretty easy to make it impossible to prove whether you own any or how many bitcoins.

Watch this for an interesting perspective on Divorce in Canada:


>and will have to start over in my only known career (software development) that is brutally ageist.

freelance consulting pays better and nobody gives a rats ass what you look like.

Flowers, date nights, and little gifts are all a lot less expensive than offshore financial schemes, a lot more likely to work, and a lot more personally rewarding.

Each $10K stack of mint $100 bills is just shy under .44″. $50K is rather easy to hide in cash or precious metals. Then there's BTC and other crypto currencies. An amount small enough to fork over to several people you truly trust and have them put it into their savings accounts in case you feel more comfortable that way. But like others have said: premature optimization.

A prenuptial agreement would probably be easier? And cheaper...

Agree with the prenup. That is the simplest way to establish what will happen when you divorce. If you remain part of the 99% then it will likely be uncontested, if you hit the lottery and become super wealthy there is a chance your soon-to-be-ex-spouse would try to invalidate it.


Nice catch.

How about not marrying? You could live a life as a committed couple including merged finances, co-living, even having kids. But without an actual marriage, you would never be at risk of losing in a divorce.

The only benefit to get married, legally and practically speaking, is perhaps for tax optimization.

$50K in $100 bills fits in a safety deposit box. Precious metals are even more compact.

I'm sure those are registered in an asset seizure or discovery phase of a lawsuit. Sure nobody knows what's inside, but the bank owns the vault so there's got to be a discoverable record of it. Now, a fire-resistant keep-at-home box might be undetectable if you concealed it well enough.

The problem is, this money is losing value every year. I think he wants to put money away and still earn _some_ interest to combat inflation.

I think that hiding money in a divorce is illegal and you made this post with what is presumably your real name. But maybe money you squirreled away before getting married is different, i dunno. IANAL.

> in California where the Divorce laws are heavily in favor of the woman

I thought they were in favor of the less rich of the two? I.e. marry a richer women that you are and you'd be the favored one.

They do favor the less wealthy spouse. That's why Britney Spears paid Federline several million dollars in alimony.

The reason for the apparent gender bias is that the woman is usually the less wealthy spouse, generally because the woman is usually the younger spouse and frequently leaves the workforce or takes lower-paying employment to care for any children that may issue.

Depends on what you want. If you only want money, this is true.

If you want custody of your children, most of the time women win it. I believe this is true even if the man was looking after the children and the woman was working, although I'm not sure about the US.

Family court is terribly biased against men. http://www.realworlddivorce.com/

The options are:

- cash and or jewelry in a safety deposit box (will lose money every year due to inflation!) - bitcoin or some kind of untraceable digital currency (risky!) - buy hard assets over time that don't depreciate in value (fine art, collectible coins, etc.) - transfer assets to someone you really trust - life insurance policy that you pay into over time

Back in the day you could have bought bearer bonds and stash them away in a safety deposit box.

  that I will be middle-aged, penniless
Is there any reason to believe a divorce settlement would not divide your assets reasonably equally/fairly?

> Is there any reason to believe a divorce settlement would not divide your assets reasonably equally/fairly?

In an ideal world, no. But a co-worker of mine -- Indian guy from India like my Dad was -- with 2 kids got divorced, and his all American white wife (born and raised in Florida) essentially took him to the cleaners. I don't know the details, but apparently she "worked" the system by "getting fired" from her day job months before the divorce was initiated, and now he has to pay child-support and alimony and 1/2 their house (on which he's the only one paying the mortgage) while she is "rediscovering" herself with yoga, hiking and other trips paid for by my co-worker's alimony.

He is 44 years old and in a state of panic. I think the only thing common between me and him is that we share the same ethnic origin. Maybe I am over-thinking this, or maybe not. LOL.

"Taken to the cleaners":

Child support for 2 kids and 1/2 the house. Oh come on! You have to take care of your kids! And, like it or not, 1/2 that house is yours and you should help pay. Sell it if you need to get out from under the debt, but it's still 1/2 yours to deal with.

Alimony. Ok, maybe he could have gotten out of this.

All in all, this is HARDLY getting taken to the cleaners. This is pretty much to be expected (especially the Child Support!).

I agree. That sounds like a more-or-less standard divorce.

> Alimony. Ok, maybe he could have gotten out of this.

Even if the wife lost her job months before the divorce, she should still be required to seek work and/or agree to stipulate a particular income for herself from which spousal support would be calculated.

Forgetting gender and who earns what for a moment...

If one partner earns more and pays a disproportionate amount of the downpayment and mortgage on a house that both partners live in, is the house really only 1/2 theirs legally? Ethically?

And in such an arrangement, particularly where one partner decides to stay in the home, can the partner who is not there force the sale to improve their cashflow? If so, how should the proceeds be divvied up assuming that a disproportionate amount of money was paid into the house by one partner?

If one partner earns more and pays a disproportionate amount of the downpayment and mortgage on a house that both partners live in, is the house really only 1/2 theirs legally? Ethically?

Makes sense to me. If say, the dad stays home to take care of the house and look after the children, while the wife works. Should the husband then be left with no claim to money/house if the wife decides she wants a divorce?

Maintaining a house and raising children are not low effort jobs. If you calculate how much daycare + a basic cleaning service would be year round, I doubt the cost would be minimal. Not to mention the fact that the person staying home will undoubtedly have a tough time entering the workforce after an extending period of time away from their careers.

Even if both work, how would you go about figuring out the split if the incomes were inequal? Do you literally just take the incomes and proportionally divide up the assets accordingly? What if the person earning more doesn't actually contribute their share to the mortgage, and wastes money on frivolous expenditures? How do you actually decide what is fair?

Thanks for the thoughtful answer. I'm not sure why I got downvoted--I'm genuinely curious about people's responses to this.

Being a homemaker is absolutely a high effort job, and cleaning/daycare are hardly cheap. You also are right to point out the opportunity cost of not being in the workplace.

These are interesting things to think about as I just don't think the matter is as black and white as some people might want to think.

But that isn't what happened there. The wife quit the job on intention so that she could be eligible for free alimony pay from the husband.

Why work and make a living, while you could skin this man alive and have him pay for you.

This sort of behavior incentivizes divorce. Not that hard to play victim when you can get some one to pay for you all life, while you chill around beaches and make merry.

> If one partner earns more and pays a disproportionate amount of the downpayment and mortgage on a house that both partners live in, is the house really only 1/2 theirs legally? Ethically?

In a marriage, this is what you agree to, yes.

  > If one partner earns more and pays a disproportionate amount of the downpayment and mortgage on a house that both partners live in, is the house really only 1/2 theirs legally? Ethically?
That's a thoughtful question, and I'm not sure why it's being down-voted. It's literally one of the questions a court considers, when judging matrimonial division of wealth.

On the one hand, in the case of a spouse who brings significant assets to the marriage, or provides a significant monetary contribution to the marriage, their contribution is recognised.

But also, a spouse who has sacrificed a high-value career to care for children is given credit for that in a settlement, so that they do not lose out on their opportunity-cost. There are fairly standard practices for courts to determine the relative merits/costs when judging a settlement.

All that said, does it happen all that often that a court decides that the assets should be divided far from 50:50?

Thanks for seeing the question for what it was--a question. You are right that things are not black and white, and might be hard to put a value on. A homemaker certainly contributes value to the relationship. How does the value of that get determined? That's what I'm really curious about as I think it is anything but black and white.

One variable is extremely easy to quantify, and the other much less so.

if this is to be "expected" then why would anyone get married in California? Can you imagine the psychological cost of paying for your ex-wife (who initiated the divorce and planned well in advance to maximize her financial position) to enjoy herself without working?

You're only focusing on the alimony part, but anyway, if the court says you owe alimony, then you do. If you later find out your ex isn't trying to find gainful employment, you can always have your lawyer try and get you out of alimony.

Almost nobody should complain about paying child support[0] and 1/2 the house. Those are still responsibilities that need to be taken care of.

[0] I left this open ended because there are (very rare) exceptions.

  > now he has to pay child-support and alimony and 1/2 their house
As a Brit, I'm not all that familiar with the term "alimony", but the dictionary definition I've read says "a husband's or wife's court-ordered provision for a spouse after separation or divorce". Alimony appears to be a generic term for the total payment from one spouse to another, on divorce. Would that mean he's paying "child-support and 1/2 their house"?

From the information given, that seems a fairly equitable split. Half the house, and a contribution towards his childrens' costs. OK, maybe he's the only one currently paying the mortgage, but in most circumstances, that would be a choice left to him: whether to keep his share (and equity) in the property, or sell it.

Alimony is also known as 'spousal support'. It's a completely different payment independent from child support. You can only get alimony if your married.

Child support can come up if your married or not and is based on how many children you have and your income levels. Your income can be imputed, which means your still on the hook even though you don't have that income level anymore. Child support is based on custody, which is a major reason why they turn very nasty in the USA/Canada.

It also sounds like they have a 3rd payment requirement in paying the mortgage. I don't know if that is voluntary or court ordered.

So this guy is paying

1. Spousal support 2. Child support 3. A mortgage

I can see him in that case paying out more than %60 of his income and possibly going in debt or living in his car to cover the shortage.

Alimony is quite different from child support in US law.

For one thing, child support ends once the kids are old enough. When and whether alimony payments end probably depends on the state...

you think he is telling you the whole story?

> from India like my Dad was -- with 2 kids got divorced, and his all American white wife

I wonder how much citizenship played into his decision to marry her originally ? In that case he would have been using her for a ticket on the "all american" gravy train.

> I wonder how much citizenship played into his decision to marry her originally ?

Nothing at all. In fact, he had already "earned" his Green Card by slaving for his Tech Employers for over 10 years. In his own words, it was "Love at 1st sight." Too bad it turned out this way. He says his Indian parents warned him against marrying a "Gori Ladkee" (i.e. white lady)

People focus too much on the husband and wife when making this risk assessment.

They forget that the incentives for lawyers in family court are REALLY screwed up, and definitely not on the side of "dividing assets reasonably and fairly."

Indeed. My ex-wife was very much led by other people: her lawyers, her accountant, and later her new husband. Literally nothing she did changed any terms of the divorce-it was all ridiculous; but it cost us both quite a bit of money.

I asked my otherwise-great lawyer a clarifying question about something the other side had said or done and he immediately went on the offensive, which ended up costing some money in response as well. I put the kabosh on that quickly, but I don't think most people would have even thought about it.

Numerous anecdotal horror stories I have heard from several friends in real life, as well as stories in the newspaper/internet.

Yup, I know a number of people who will never be able to save for retirement because their paychecks finance their ex-wives' (now carefree) lifestyles. Pretty scary.

He is probably including alimony into his reasoning. I think it's still over-the-top.

HA! No, it rarely works like this, especially if one party is more spiteful than the other, or if there are kids. Pre-nups are the best way to go.

Would a prenuptial agreement help?

Also note retirement accounts are subject to being split for divorce, but they are protected from lawsuit. So loading up your 401k will prevent you being sued and having your assets taken.

This is what you took away from this story? That you want to conceal money best as possible in a byzantine labyrinth of tax optimization?

It would seem that the protagonist here would still be obscenely rich if he had simply settled with his wife.

And saved a lot of time and money.

> In 1999, the Florida attorney general sued to shut down Credit Key Express, saying that it misled customers into thinking they would receive preapproved credit cards. (In fact, all they got for their money was a list of banks that might give them credit cards.) Some years after Credit Key Express shut down, the Florida attorney general came after Xacti’s club businesses, claiming that Oesterlund’s companies had again misled customers. According to court filings, they had abused what are known as “negative options”: Customers would provide their credit card number for a “trial offer,” only to be charged a monthly fee, disclosed in the fine print and difficult to cancel.

> Oesterlund had begun exploring how to structure his business to insulate himself not just from taxes but also from future civil litigation. “I want to have in writing a statement,” he wrote to his lawyers in 2011, “that I can no longer be subject to Florida or U.S. law.” Take every step necessary, he added, to “remove myself from the country of Evil.”

> “Women get 10 percent in Russia by law,” Oesterlund wrote back. “In Dubai they get 0 percent.”

> Oesterlund had stopped making mortgage payments on the house in Boca Raton, she later said in court filings, and threatened to evict her mother and disabled aunt from a house they had bought in Wales. He warned Pursglove that he wouldn’t pay any bills until she agreed to a settlement.

Top HN comment: How can I be this guy?

Stick it in a metal box, and bury it in a big hayfield up near Buxton, under a rock that has no earthly business in a Maine hayfield. Piece of black, volcanic glass.

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact