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Does the source of child support payments matter?

In Houston, Texas, non-custodial parents with criminal tendencies are not generally known for their dependability with child support payments. However, a Kansas resident and convicted ticket scammer seems to have made a relatively laudable choice in attempting to hide his ill-gotten gains. He pre-paid $100,000 worth of child support to his ex-wife, and the money seems to have been drawn indirectly from the proceeds of his criminal activity.

The former assistant athletics director at the University of Kansas is serving time for stealing $359,000 worth of football and basketball tickets from the university and reselling them. He and other university employees took part in an illegal scheme that ultimately netted $2 million in income from the sale of pilfered tickets.

His legal team assured his ex-wife that the payments, drawn from his retirement account, were perfectly legal. However, the circumstances surrounding the timing of the payments call that into question. The money was withdrawn at around the same time that he cashed in on the ticket scam.

Since the former athletics official will not be earning money for the duration of his 46-month prison sentence, his former wife may feel a bit conflicted about the ultimate source of the child support pre-payments. The IRS and the university's athletic department, on the other hand, are not conflicted at all. Early withdrawal from a retirement fund incurs a substantial tax penalty, and the IRS wants its share. KU would like to recover some of the proceeds from the stolen tickets.

It will be interesting to see what happens if the case proceeds to court. Although in-state precedents carry more weight with Texas family courts than out-of-state rulings, this case could still have an impact on court decisions involving tainted money used for child support payments in Houston.

Source: Lawrence Journal-World, "Child support scrutinized in tickets scam," George Diepenbrock, Aug. 9, 2012

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