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What Happens to a Non-Guilty Spouse of a Convicted White Collar Criminal?

In the upcoming weeks, a Manhattan federal judge will determine whether the spouse of convicted insider trader should be able to keep the couple’s $2.2 million Florida home and significant cash that was arguably obtained through illegal activities. The case concerns trader Matthew Martoma who was recently convicted of insider trading and sentenced to almost 10 years in federal prison. Martoma, who was employed at SAC Capital Advisors, was recently found guilty of using secret information to trade two different stocks. This practice was illegal because the information was not public knowledge for other holders of the stocks. This month, Martoma’s wife, who claimed no knowledge of the illegal activities of her husband, submitted a request to the court asking that she be able to keep their $2.2 million Florida house, and also $4.5 million in cash.

The Case For Keeping Familial Assets

In February, Martoma was convicted in federal court for the crime of securities fraud after it was proven that he had illegally traded shares in Elan and Wyeth stock. At the beginning of September, the U.S. District Judge Gardephe ordered Martoma to forfeit almost $9.4 million to the government. Included within this order was the couple’s home and investment/bank accounts that Martoma’s wife is now seeking to protect. Now, following Martoma’s sentence and conviction, Martoma’s wife is attempting to block federal prosecutor’s attempts to seize their assets, which they assert were proceeds of the white collar crimes committed by her husband. The wife was employed as a pediatrician until she gave up her practice in 2005 to care for the couple’s two children. In her filing, Martoma’s wife stated that her personal contributions to the couple’s total assets provides her with a legal claim to keep their Florida house, and also to keep the funds in an investment account, as well as in two separate bank accounts.

Martoma’s wife is seeking to save their five-bedroom, 7,700 square foot Boca Raton home. Florida property law will allow the wife to claim a share in this home that is equal to her husband’s share. In support of this claim, the Florida state constitution prevents a Florida resident’s home from being seized in civil judgments, and also provides an additional barrier to home forfeitures in criminal cases. However, unless Martoma’s lawyers are able to negotiate a settlement with the government, Martoma’s wife could still be forced to sell the house and give the government half of the proceeds that are attributed to her husband. Additionally, it remains unclear whether Martoma’s wife will be able to protect the bank accounts and the investment account held by the couple. In her petition, it is asserted that a bonus paid to Martoma by his employer in 2008 was segregated and placed into a bank account that was separate from the accounts that Martoma is now seeking to protect.

The Martoma case illustrates the difficulties facing the families of convicted white collar criminals. Though a spouse may not have had any idea that illegal activities were being perpetrated by their spouse, the result is often that the family assets will still end up being used to compensate the victims of the illegal activities. If you have been charged with a white collar crime, it is imperative that you speak with an attorney who can protect the rights of you and your family. Contact Miami white collar defense attorney Jeffrey S. Weiner, P.A. in South Florida today for immediate assistance.

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