June 10, 2022 • By Dennis Beaver
“I stumbled across evidence that my husband, ‘Chris’ is again stealing from his employer.
“He works at a golf course and pockets cash from golfers. He doesn’t record their tee times so there isn’t a record of them playing or names on a tee sheet. He stole $14,000 last golf season and so far he’s taken over $2,000 this season. The owner — who is a longtime, close friend — is unaware.
“He keeps the stolen cash in empty golf ball boxes in a drawer in his Man Cave – a spare bedroom – which I recently discovered. Amazingly, he records what he takes each day in a calendar notebook, taking anywhere from $25 to $175 every day depending on how busy the golf course is that day. He’s a gambler and has been kicked out of most of the casinos in our area.
“I love golf and could play anytime but I’m so disgusted and disturbed by what Chris is doing that I can’t bring myself to go there.
“I’m full of resentment and terrified that he could take me down with him. What should I do? Thanks, ‘Mona.’”
Photos of Cash and A Calendar Showing Dates of Theft
Attached to Mona’s email were photos of something like $20,000 in clean, new $100 bills, along with pages from a calendar indicating how much money was taken on certain days, with a running total of over $14,000.
“It was spooky looking at evidence of this embezzlement – and in his own handwriting! He did the same thing at a different golf course some years ago, but I thought he had stopped. All of what he stole went to support his gambling habit. I never saw one cent of the money and he did not purchase anything for our home, pay bills, nothing!”
Many Issues Involved Here
I ran Mona’s question by a retired police detective, a private investigator, and a CPA with the national accounting firm CBIZ, each one beginning their evaluation with these questions: “When did she first know or have reason to know of his thefts? Does she want to remain married to this thief?”
Advice from a Private Investigator
California-licensed private investigator Riley Parker observes that, “Spouses discovering embezzlement usually happens one of two ways: (1) The thief uses the stolen money to buy things for themselves or the family, so it is obvious, or (2) it is discovered accidentally as might have happened here.
“This is important if law enforcement becomes involved, for if she in any way participated or knowingly benefitted, she’s dirty and subject to prosecution.
“Given his stealing in the past, I see her at risk and therefore should retain a criminal defense attorney in addition to at the very least, a consultation with a divorce lawyer. At some point in time, the IRS might need to be contacted, in an attempt to establish herself as an innocent spouse but I would only do this through counsel.”
Law Enforcement’s Opinion
“Tony Mosley, a 25-year veteran of the Bakersfield Police Department, recently retired as a detective, provided these recommendations:
“Her specific course of action will depend on whether he knows she has discovered the theft and is willing to admit it and her ability to distance herself from what he has done.
“She should immediately get the money and related evidence out of the house and put it in some safe place until it can be returned to the employer which should be done with the help of a criminal defense attorney.
“From my experience, it is very doubtful that law enforcement would be interested in getting involved if the funds were returned, as she is trying to make things right. But she certainly will have sealed her husband’s fate as an employee.”
The Innocent Spouse Relief with the IRS
“If your readers have filed a joint tax return, she could be liable for a potentially large tax bill she and Chris face from his theft,” observes Southern-California based CPA, Greg Braun, with the national accounting firm of CBIZ.
“By not declaring the stolen money as income, tax and penalties would be owed. However, Mona can file for relief under the innocent spouse rule. IRS Publication 971 tells us that:
“If her application is granted, she will not be liable for tax or the penalties that stem from her husband’s failure to declare the income from these stolen funds. She must meet the following conditions to qualify for innocent spouse relief.
1. They filed a joint return.
2. There is an understated tax on the return that is due to erroneous items of her spouse.
3. When she signed the joint return she did not know, and had no reason to know, that the understated tax existed.
4. Taking into account all the facts and circumstances, it would be unfair to hold her liable for the understated tax.
Additional Recommendations
I asked Mona if Chris had ever been violent with her? “No, not physically, but verbally, especially when discussing his gambling addiction which he denies,” she replied.
“Then unless he gets into Gamblers Anonymous, you know what that means for your marriage, right?” She agreed and promised to keep me in the loop.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.