(Cindy Peters, Petitioner and Respondent, v. Ralph Peters, Respondent and Appellant) Part 3 Conclusion
Presented by Ron J. Anfuso, CPA, ABV, CFF, CDFA, FABFA
In this issue of Forensic Accounting Today, I continue with the third and final part of the article to examine the case involving a husband who concealed two bank accounts from his wife, accounts that together held $787,112. I was appointed by the court as a forensic accounting expert under California Evidence Code §730. My task was to determine the husband’s gross cash flow available for support. I served as the sole forensic accounting expert for the trial proceedings.
Ron’s Corner
Because this case was not published, I have used fictitious names and adjusted certain dates and financial figures to preserve confidentiality.
One cornerstone of California family law is the parties’ continuing obligation to make full and accurate financial disclosures. When a party intentionally conceals material financial information, the consequences can be significant—including the setting aside of prior support orders years after they were entered.
The Court of Appeal’s decision in In re Marriage of Peters illustrates the importance of complete financial disclosure and demonstrates how a comprehensive forensic accounting analysis can uncover concealed income that materially affects a child support determination.
You may download the PDFs for newsletters number 88 and 89 at https://anfusocpa.com/forensic-accounting-newsletters.
Ron
The Family Court’s Findings
On February 15, 2023, the family court vacated its October 2016 child support order after concluding that Cindy Peters had established grounds for relief under Family Code section §2122.
The court found that Ralph Peters not only failed to disclose relevant financial documents but also understated his income for purposes of calculating child support. Central to the court’s decision were two previously undisclosed bank accounts containing approximately $787,000 in deposits during the period analyzed for support.
As the court-appointed forensic accounting expert, I was retained to determine Ralph’s gross cash flow available for support. My assignment required an analysis of all financial information necessary to accurately determine income. After the previously undisclosed bank records were obtained, I traced the deposits, excluded transactions that represented loans or other non-income items, and calculated Ralph’s actual income available for support.
The court found my testimony to be credible, specifically noting that the analysis appropriately distinguished income from borrowed funds. By contrast, the court found Ralph’s explanations regarding the undisclosed accounts to be unsupported and lacking credibility under Evidence Code section §780.
Ralph argued that neither Cindy nor I had specifically requested the undisclosed bank accounts. The family court rejected that argument outright, describing it as “specious and unpersuasive.” The court emphasized that the stipulation appointing me as the forensic expert required both parties to provide all documents necessary to complete a reliable cash flow analysis. Incomplete financial disclosure was not optional.
The court also rejected Ralph’s contention that deposits into one of the Wells Fargo accounts merely represented line-of-credit advances. Because he failed to produce credible documentary evidence supporting that position, the court accepted my analysis and concluded that Ralph had failed to rebut the calculated income available for support.
Based upon my updated DissoMaster™ calculations, (now replaced by Xspouse), the court vacated the prior support order and ordered guideline child support of $7,120 per month from October 2016 through December 2021, $8,756 per month during the first half of 2022, and $11,112 per month beginning in July 2022.
The Court of Appeal Affirms
The Court of Appeal affirmed that the evidence fully supported the trial court’s findings in all material respects.
The appellate panel upheld that the trial court relied upon my testimony, the declarations submitted by Cindy and her counsel, and the banking records documenting approximately $787,000 in previously undisclosed deposits between 2014 and 2016. It noted that Ralph never disclosed these accounts during discovery, while conducting the court-ordered cash flow analysis, or during the evidentiary hearing itself.
The forensic analysis demonstrated that the concealed accounts materially affected Ralph’s income available for support. After eliminating deposits that did not constitute income, I calculated guideline child support using Ralph’s actual cash flow. The resulting analysis showed that his child support obligation had been significantly understated.
On appeal, Ralph argued that the family court had previously determined his financial disclosures did not constitute fraud under Family Code section §2122. The Court of Appeal rejected that argument, pointing to the trial court’s express findings that Ralph intentionally withheld financial information and understated his income for child support purposes.
Equally important, the appellate court observed that Ralph produced no expert testimony or documentary evidence contradicting the forensic analysis. Nor did he identify any calculation errors or demonstrate that deposits had been improperly characterized as income. Instead, he relied primarily on testimony and declarations that the trial court had already found not to be credible. Under the substantial evidence standard of review, those credibility determinations were entitled to considerable deference.
Finally, the Court of Appeal rejected Ralph’s argument that Cindy could have sought an earlier modification of child support. At the time of the original proceedings, Cindy had no knowledge of the undisclosed bank accounts. The appellate court concluded that the evidence overwhelmingly demonstrated Ralph’s intentional concealment of material financial information, resulting in years of underpaid guideline child support.
