Sham Divorces

Students sometimes come to the study of family law thinking that "no fault" divorce is the same as "on demand" divorce.  These students need to be reminded of the necessity to prove "irreconcilable differences" or "irretrievable breakdown" in order to obtain a divorce even in "no fault" states.  

There is precedent for collusive divorces being vacated for fraud (see Family Law Prof Blog post of July 26, 2006); however, recent news stories regarding sham divorces emphasize the role of third parties in preventing sham divorces or reversing their financial outcomes. 

The Connecticut Post reports that federal prosecutors have requested to intervene in the divorce proceedings filed by the wife of Walter Forbes, former chairman of Cendant Corporation, who is serving prison time for one of the biggest accounting scandals in U.S. history.  The feds allege that the  divorce is an attempt to evade a $3.275 billion restitution order.  The couple have been married for 27 years.  Walter was convicted and sentenced in January 2007.  

In another recent news story reported by ABC news in Houston, Continental Airlines is suing nine pilots who allegedly obtained a sham divorce in order to trigger a cash pension payout to their ex-spouse, who they subsequently remarried. In a lawsuit filed in Federal Court, the company alleges the pilots obtained uncontested divorces in which the pilot would assign 90-100% of their pension benefit to the other spouse, who was then able to obtain a Domestic Relations Order (DRO) in state court that resulted in the Continental pension play paying out a cash lump sum to them. After receiving the pension payout, almost all of the pilots and their ex-spouses remarried.

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