Tips From a Fraud Investigator: Financial Empowerment During Divorce

“I wanted to offer resources to help reassure, empower, and provide a framework through which someone can tackle something that seems insurmountable.” -Tracy Coenen

Money is a leading cause of marital trouble in the U.S., so it’s common for people to have financial friction during divorces. Tracy Coenen is a forensic accountant and fraud investigator at Sequence Inc., so she sees these situations up close as divorces unfold. She’s found that the spouse with the most financial knowledge and experience often gains the upper hand.

How can divorcing spouses feel more empowered during the process? Can financial brands help people in these situations?

Tracy discusses these questions with James Robert Lay, founder of the Digital Growth Institute. 

Behind the Scenes With a Divorce Fraud Investigator 

Tracy developed The Divorce Money Guide after seeing divorcing couples struggle through sorting out the details of their financial separations. She created a ten-step program that provides financial direction as a divorce unfolds.

Her work as a forensic accountant and fraud investigator has given her special insight into the specific types of help people need in these challenging situations.

“I am digging through bank statements, credit card statements, investment account statements, tax returns, and I am trying to figure out where the money went,” she says.

She often finds that the spouse who’s not been handling the money is at a disadvantage in terms of access to information. They might suspect something fishy has been going on, but they don’t know where to look and what to do next.

Even if they don’t suspect fraud, a divorcing spouse might believe that their soon-to-be ex isn’t telling them the whole truth. They’re concerned about not being able to locate hidden money, secret bank accounts, and funds they may never see again.

Tracy decided to become a resource for these people and empower them to understand their rights and financial options. She wanted to go beyond offering basic budgeting and financial planning tools and provide divorce-specific services to minimize additional trauma during an already-traumatic time.

Hiding the Money, Hiding the Truth

James Robert relates a story about hiding money problems from his wife in the past. He did it with good intentions of trying to protect his family, but he looks back on it and says, “I was 100% in the wrong. I look back and I think, why would I do something like that?”

Tracy sees many people in similar situations, whether they’re trying to stay together or are initiating divorces. They don’t necessarily want to be adversarial or cruel to the other spouse, but they might not be telling the “whole truth” about money.

“We are nothing without a plan, and knowledge is power,” she says. Her goal is to give people a solid strategy and help them understand how to get their arms around their money troubles.

The Divorce Money Guide lays out ten steps that are simple enough for anyone to handle, even if they have no financial background or skills. The guide breaks things down into manageable pieces so it’s less overwhelming.

Feelings of Financial Vulnerability

Let’s face it...

Money is an emotional topic for almost everyone. When you add divorce into the mix, it’s like adding fuel to the fire. 

“Divorce is probably one of the most terrible things someone can go through and it's probably a time when they feel most vulnerable in their lives.”

This is why Tracy provides services beyond just the financial framework, helping people acknowledge how emotional and vulnerable they feel.

She does podcasts and social media posts sharing common frustrations and challenges. It’s a casual and accessible way for people to learn about red flags for fraud, how to approach difficult conversations, and other emotional issues that arise while dividing finances.

Red Flags for Financial Troubles During Divorce

Tracy shares some of the most common red flags she sees during her fraud investigations.

Would you notice these red flags in your marriage or divorce?

• Changes in behavior, like becoming more secretive or hiding documents
• Removed access to accounts and online banking
• Evasiveness about topics they used to be open about
• Phone-related conflict, like hiding their phone from you
• Spending pattern changes that seem out of the ordinary
• Large expenditures without clear explanations
• New affairs, gambling, drugs, and addictions

James Robert muses that there might be an opportunity for a fintech company to analyze spending between couples and suggest red flags. If the algorithm saw something off, the tech could send out an alert that it’s time to take a closer look.

This is essentially what Tracy does as a human investigator. She conducts data analysis, identifies outliers, looks for changes in patterns, examines unusual account activity, and observes factors like timing, amounts, sources, and destinations of transactions.

Banks already have this technology, which is evident whenever you receive an alert about potential debit or credit card fraud. Your bank is essentially telling you something is out of character for your usual spending. Tracy does this in a more personal way, helping her clients track down the sources of unusual spending and seek the reasons behind it.

Common Misconceptions About Dollars and Divorce

Tracy says most people are wrong in their assumptions about money and divorce. People often believe their soon-to-be-ex spouses when they say things like, “You’ll never get a dime. You’ll lose the home equity. You won’t get any of my retirement money.”

That’s not necessarily true!

Someone who has been a stay-at-home parent, for example, may be entitled to part of the total home income like a paycheck and retirement savings.

When fraud is involved, there’s often a perception that the money is long gone and there’s nothing that can be done about it. Tracy says this is a mistaken assumption. Even if your spouse gambled away a large amount of money or spent it on drugs, there’s still hope. There could be valuable home equity, cars, jewelry, or even family money to make up for what your spouse spent so irresponsibly.

Tracy also points out that her guide isn’t just for women, although women tend to use it more frequently than men. Anyone can use it to prevent losing their financial stability during a divorce. 

She relates the story of one of her clients, a husband going through a divorce. He’d been a stay-at-home dad for 15 years and had given up his career to take care of the children. His wife, a doctor, had been bringing in up to $2 million per year and offered only a small amount of alimony for 12 months. By using Tracy’s services, the husband had the confidence to say, “No. That’s not fair and that’s not enough.”

Tips and Takeaways from Tracy

Knowledge is power.

When you educate yourself, you empower yourself. Give yourself the advantage of financial knowledge so you’ll have the confidence to demand what you deserve.

You don’t have to do this alone.

You can hire someone like Tracy to help you, you can use her guidebook, or you can join a support group that helps you feel like you’re part of a community during a difficult time.

Use the type of educational materials that feel most comfortable for you. It might be a YouTube series, podcast, checklist, or worksheet that helps you feel organized and ready to move forward. You might even need in-depth discussions with a financial coach. Do what it takes to access the support you need.

Money is emotional and divorce amplifies your emotions.

Don’t shy away from this fact. Instead, embrace feelings of empowerment and stay hopeful that you have the emotional wherewithal to survive and thrive after divorce.

For more information about divorce-related financial investigations, connect with Tracy through fraudcoach.com or look her up on Instagram @divorcemoneyguide. To learn more about financial transformation, reach out to James Robert Lay at the Digital Growth Institute.