Court Rejects Ex-Husband's Claims of Expenses
A man must pay his ex-wife more than $282,000 in child support and maintenance payments after a judge determined he misclassified personal expenditures, including a mountain-climbing trip to Mount Everest, as business expenses.
Westchester County Supreme Court Justice Colleen Duffy (See Profile) wrote in E.D. v. J.D., 634/05, that the ex-husband tried to "artificially deflate" his income in a number of ways between 2007 and 2012 to avoid full child support and maintenance payments to his former wife.
They included the three-week trip in 2010 to train to climb Mount Everest, Duffy said, a journey he said was related to his work in marketing for a company that sold mountaineering gear.
The judge said his explanation that he was compelled to take the trip by his company was "not plausible" because the husband was the sole shareholder, board member and officer of the corporate entity he established in 2007.
In addition, Duffy said the husband charged to his company the travel expenses for a 2007 trip to Israel that coincided with his son's bar mitzvah. The husband said he met with representatives of an Israeli clothing company while in that country.
According to Duffy, the husband did not supply the court with receipts to verify that the overseas trips had the bonafide business purpose he said they did.
The "most glaring" of the husband's co-mingling of business and personal assets was his use of corporate money to pay his lawyers to defend him in the action before her, Duffy ruled from White Plains. Though the corporation was not named as a defendant in the action, the husband testified that the entire amount paid to lawyers in the case before Duffy, $20,000, came out of corporate accounts.
Coinciding with the creation of the ex-husband's marketing company in 2007 was a "precipitous" drop in the ex-husband's annual income, according to the ruling.
The judge said she agreed with the ex-wife that her former husband should be made to pay maintenance and child support according to the formula in the 2005 divorce settlement. It calls for the husband to make maintenance and child support payments according to 66 percent of his after-tax "earned income" up to $200,000 a year and at lower percentages above $200,000.
For the year 2010, for instance, Duffy said the husband paid the ex-wife $11,304 based on the $28,600 he paid himself in salary from his corporation.