Last week, a Tennessee judge fined Oprah Winfrey’s father, Vernon Winfrey, $70,000 in legal fees as punishment for bad behavior during his divorce. According to the judge’s decision, Mr. Winfrey used some fairly complicated maneuvers to avoid splitting the value of a barbershop he owned with his soon-to-be ex-wife while at the same time leaving her on the hook for a loan taken out against the property.
First, Vernon transferred the barbershop to a friend, who did not pay him anything for the property. He then he intentionally let the property go into foreclosure, knowing that Oprah would purchase it at a discounted rate. In the end, his wife caught wind of the scheme, and ended up getting what she was due.
We see it all the time: spouses who just don’t want to ante up their share of the marital assets. The scheme Vernon Winfrey employed to keep his wife from getting half of the barber shop may seem elaborate, but divorcing spouses commonly use relatives, shell companies, or a combination of the two to hide assets.
As we wrote here and here, we have found that the best way to start unraveling any money-hiding scheme is with a search of the public record. Searching the public record is cost effective, productive, and carries a very low risk of alerting the subject that he or she is being investigated.
For example, if Mrs. Winfrey had come to us with suspicions that her husband was hiding property from her, we would have begun by searching proprietary databases that aggregate public information about the search subject.
That search would lead us to list of properties Mr. Winfrey had owned, the dates when they were transferred, and the name of the transferee. Once we had identified the barbershop property as having been transferred after the couple knew they were heading for divorce, we would then conduct a search of county records for details about the barbershop.
County property records would have revealed the initial transfer of the barbershop from Winfrey to his friend, the subsequent foreclosure, and the purchase by Oprah. We could have reconstructed Vernon’s entire scam without formal discovery and without putting him on notice that we were conducting an investigation.