The Fraud Examiner

For Better or for Worse

February 2013

By Yasmin Vazquez


“I, John Doe, take you, Jane Poe, to be my lawfully wedded wife, to have and to hold, from this day forward, for better or for worse, for richer or for poorer, in sickness and in health, until death do us part.” 


The institution of marriage has long been a sacred ritual between two people in love; however, even this sacred institution is vulnerable to fraud. There are people who enter into marriage for fraudulent reasons, including tax benefits, health insurance, military benefits, real estate ownership, immigration status and others. Marriage fraud is not an exclusive problem within the U.S., but rather a global issue that CFEs must recognize as an increasingly common occurrence.


Tax Breaks 

Rather than the traditional reason of marrying for love, couples might enter into marriage solely for the benefits provided by the government. For example, married couples in the U.S. receive a federal tax break when their incomes are disparately different or when one spouse does not have any income at all. Couples who live together and are not formally married but claim to be in order to take advantage of this tax break may be prosecuted by the government.


In 2010, the federal estate tax was approximately 20 percent higher than the federal income tax. For this reason, there were instances when people chose to marry their beneficiary in order to avoid paying the higher estate tax. Regulations were recently modified since discovering this excuse. CFEs must remain vigilant for these loopholes within their own government to deter individuals from using this as an incentive to avoid higher taxes.


Health Insurance Benefits 

Sometimes an individual enters into marriage with a stranger or friend for health care benefits. An individual who is employed with a company that provides health insurance will also cover the spouse. Those who are unemployed or self-employed often pay higher premiums, copayments and deductibles than those covered by a larger company that receives a group rate. Even people who are covered in smaller companies could benefit by marrying and transferring to their significant other’s insurance if their rates are lower. An instance where this might occur is a male friend offering to marry a female friend who needs major surgery in order to cover her medical expenses under his company’s health care plan.

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