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Jail Becomes Home for Husband Stuck With Lifetime Alimony

Former Citadel Investment Employee Ari Schochet Bloomberg – by Sophia Pearson

Ari Schochet has grown so accustomed to being sent to jail for missing alimony payments that he goes into a routine.

Before his family-court hearing, Schochet, 41, sticks on a nicotine patch to cope with jailhouse smoking bans, sends an “Ari Off the Grid” e-mail to friends and family, and scrawls key phone numbers in permanent ink on his forearm.  

Schochet, who said he worked as a portfolio manager at Citadel Investment Group Inc. and Fortress Investment Group LLC (FIG) and once earned $1 million a year, has been jailed for missing court-ordered payments at least eight times in the past two years as he coped with the end of his 17-year marriage.

The reason he ran afoul of the law was simple. He was out of work for most of that time, a victim of a weak economy, and he ran through his savings trying to pay his wife alimony and child support that totaled almost $100,000 a year.

“It’s a circle of hell there’s just no way out of,” Schochet said. “I paid it as long as I could.”

Schochet and ex-spouses in similar changed circumstances say New Jersey’s law unfairly imposes lifetime alimony on them. If they fail to make payments, like the $78,000 a year Schochet owes his ex-wife in alimony, they can be jailed for contempt of court regardless of whether they have a job or resources.

Massachusetts’s Law

Relief may be on the way. In states such as New JerseyConnecticut and Florida where divorce laws are based on century-old notions of what an ex-spouse deserves, laws are being proposed to limit alimony in recognition of wives’ earning power and the changed economic circumstances husbands can face.

The American Academy of Matrimonial Lawyers in 2007 recommended restricting alimony amounts and duration. The proposal became the basis for Massachusetts’s alimony reform laws in 2011. Those statutes eliminated permanent alimony and gave judges guidelines for calculating amounts.

Three states have enacted laws abolishing permanent alimony with caveats allowing discretion in exceptional cases, according to Laura W. Morgan, an attorney and owner of Family Law Consulting in Charlottesville, Virginia. Lawmakers in at least 10 other states, including New Jersey, are being prompted by advocates to consider more restrictive legislation, said Morgan, who is writing an alimony handbook to be published by the American Bar Association.

New York lawmakers are considering a bill that would create an alimony formula that would require that only spouses with much higher incomes than their ex-partners pay support.

Connecticut’s Law

Connecticut Governor Dannel P. Malloy in June signed legislation revising the state’s alimony statutes to add education and earning capacity to a list of factors to be considered. The changes, which take effect Oct. 1, direct judges to specify the basis for any award of permanent alimony. The law also calls for lawmakers to study the fairness and adequacy of statutes governing alimony awards and make recommendations by February.

Florida’s legislature passed an alimony overhaul that would have eliminated permanent support. Governor Rick Scott, a Republican, vetoed the bill in May, citing its provision to allow changes to existing awards.

Following a state commission’s recommendation in 1995, New Jersey limited the duration of alimony after short-lived marriages while leaving intact permanent alimony and judicial discretion.

Far-Reaching

The first of two proposals before New Jersey lawmakers would allow modification of alimony due to changed circumstances such as a payer’s unemployment or disability. The bill, sponsored by Assemblyman Sean Kean, a Wall Township Republican, would keep permanent alimony. That bill and an identical one in the Senate have passed the judiciary committees.

more far-reaching proposal, sponsored by six Assembly members including Kean and Charles Mainor, a Democrat from Jersey City, would abolish permanent alimony. Identical legislation in the Senate is sponsored by Sandra Cunningham, also a Jersey City Democrat.

The Mainor-Kean bill is modeled on the Massachusetts law, which was supported by women’s groups and the state bar association. It would base alimony on the length of the marriage and income and allow ex-spouses to stop payments when they retire.

Reform Group

“You have a moral and legal obligation to provide for your child until they’re 18,” Mainor said in an interview. “You don’t have that same obligation to your former spouse for the rest of your life.”

The Mainor-Kean bill is backed by New Jersey Alimony Reform, an advocacy group headed byTom Leustek, a divorced Rutgers University plant-science professor from Rahway who pays his former wife alimony based on a private settlement to avoid litigation.

Mainor’s bill would leave in place three types of alimony: rehabilitative, reimbursement and limited-duration.

Rehabilitative alimony is to help an ex-spouse become self-supporting. It would generally be limited to five years barring “unforeseen events.” Reimbursement alimony can be ordered if one spouse supported the other’s advanced education expecting to share the “fruits of the earning capacity” it created.

Limited-duration alimony would be awarded for no longer than half the length of a marriage of five years or less, with higher percentages for those approaching 10, 15 or 20 years. For marriages of 20 years or more, payments could last indefinitely.

Circumstances Differ

Alimony would end if the receiving ex-spouse remarried or entered a new civil union, as permanent alimony does now. It would end when the paying spouse reached retirement age, whether he or she retired. Judges could make exceptions to the rules “in the interests of justice,” based on evidentiary findings.

The difficulty with strict criteria for alimony amounts is that family circumstances differ, Bonnie Frost, a former chairwoman of the New Jersey Bar Association’s family law division, said in an interview.

About 22,000 former spouses receive alimony under court supervision in New Jersey, with child support also going to about 60 percent of them. An unknown number receive maintenance under private settlements that couples reach before going to family court.

Persuading a judge to change amounts is difficult and expensive, Leustek said. The average fee for a lawyer to start the process is about $10,000, he said.

Mainor’s bill seeks to rein in judges by requiring them to justify their refusals to make modifications in writing.

Legal Origins

Judges are following the law, not deciding cases “based on a public discussion about reform,” said Winnie Comfort, a spokeswoman for New Jersey courts.

Alimony laws in most states originated when women typically stayed at home and depended on their husbands for financial support. If a husband left, the wife was entitled to lifelong support to avoid starvation, said Morgan, the family law attorney in Charlottesville. In the 1950s alimony was seen as necessary to a woman’s survival.

Women now make up almost half the labor force, 47 percent compared with 30 percent in 1950, the U.S. Bureau of Labor Statistics says. Dual-income couples accounted for 59 percent, of married households with children under 18 in 2011, according to the bureau. About a third of women earned more than their husbands in 2011, compared with 18 percent in 1987.

“But there is still a glass ceiling, and women are still earning just 70 cents on the dollar” earned by men, Morgan said.

Women’s Stories

She called the current push for change “very male-driven.”

“As men retire, they don’t want to keep paying alimony,” she said. “For every horror story that you can come up with about a support obligor, I can come up with 10 for an obligee who can’t make ends meet because her post-divorce standard of living has so drastically dropped.”

Women paying alimony have horror stories too. Alisa Whiting, 50, who helped form New Jersey Women for Alimony Reform last year, worked in the mortgage industry for 25 years earning about $160,000 with bonus in 2004, when she was a vice president at JPMorgan Chase & Co. (JPM), she said.

Whiting’s ex-husband was self-employed with two businesses and made more than she did for most of their 20-year marriage, she said.

When he stopped working after she filed for divorce in 2008, she was ordered to pay $20,000 a year in alimony until her youngest son is out of college and $25,000 a year afterward.

Lost Job

Whiting lost her job that year and went to work for a software company in Woodbridge, New Jersey, earning $52,000 a year responding to requests for proposals. Her hours were cut July 1 to two days a week. She takes home about $800 a month, including unemployment payments, she said.

She plans to represent herself in court in a request for an alimony modification.

“There are no words to describe the despair that I feel,” Whiting said. “I’m tired. It’s infuriating. Permanent alimony is an outdated concept. It’s based on a salary that I don’t have any hope of ever earning again.”

Support-enforcement hearings for people like Schochet in Bergen County have been held in the county jail in Hackensack since Hurricane Sandy damaged the courthouse.

Schochet’s ex-wife, Sharona Grossberg, declined to be interviewed about her divorce, which became final in April 2012. Her attorney, William Schiffman, didn’t respond to requests seeking comment on the case.

Citadel spokeswoman Katie Spring said in an e-mail that Schochet worked as an analyst and “not a portfolio manager” when he was at the firm. Gordon Runte, a managing director at New York-based Fortress, didn’t immediately return an e-mail message seeking comment about Schochet’s employment.

Holding Cells

Accused scofflaws like Schochet store their belongings in lockers in a central lobby before being sent through electronic metal detectors and corralled in holding cells that flank a fluorescent-lit multipurpose room.

Judge Lisa Firko, like other family-law judges, conducts hearings from a makeshift bench while jail employees pass documents between a court-appointed attorney and probation staff.

Schochet parks in a dirt lot across the street when he’s required to make an appearance at Firko’s court.

“When I tell people what’s happened to me these last two years they say, ‘Your story can’t possibly be true, and you must be in court because you beat your wife,’” Schochet said. “This has nothing to do with anything other than money.”

Since April, he has managed to leave the jail following each appearance after Firko acknowledged his efforts to secure a well-paying job. Schochet now works part-time as an entry-level stock transfer agent, a job that leaves him with about $100 a month in disposable cash after garnisheeing and taxes. He’s got a steady girlfriend and job prospects.

Water, Gas

“It’s amazing how small you can live,” said Schochet, whose longest jail stay was 11 days. “I’m down to paying for electricity, water, my cell phone, Internet and gas. Friends help out with whatever else I need.”

All that may be in jeopardy after he faced Firko again today to explain why he was rejected for a court-required $500,000 life insurance policy naming his ex-wife and children as beneficiaries.

“I have been more than patient with you,” the judge told Schochet.

The judge ordered him to surrender to authorities and the head of the work/release program gave him until 6 p.m. today to report to jail, where he will spend his evenings and leave during the day for the next two weeks, when his case will be reviewed by the judge on Sept. 9. His release is conditional on paying $25,000 in arrears.

“What am I supposed to do?” he said in a phone interview today. “This is so against the law, so against my civil rights. Now I’m stuck in the system again for months. It’s just unbelievable. I have no recourse. The legal system has totally stepped away from me.”

To contact the reporter on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

http://www.bloomberg.com/news/2013-08-26/jail-becomes-home-for-husband-stuck-with-lifetime-alimony.html

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5 Responses to Jail Becomes Home for Husband Stuck With Lifetime Alimony

  1. Lauren says:

    Are we supposed to feel sorry for a slime bag banker who can’t pay his alimony? He helped destroy this country. I hope he suffers forever.

    • diggerdan says:

      Yep, I agree with ya 100% .

    • uninformedLuddite says:

      While I have no sympathy for bankers it is an illustration of bad laws/rules/statutes/policies that should be changed. He might think he is suffering but what about the poor sod who only earns $20K pa?

  2. uninformedLuddite says:

    If I had a job earning a million dollars a year I would only need to work a couple of years to set myself up for life. People live far beyond their means and fail to plan for the future.
    Having to pay alimony to keep some cow living the way she thinks she deserves is just wrong. She needs a trailer park.

  3. DL. says:

    Gee I’m surprised no one on here has attacked the guy because “he’s Jewish” (seeing as how his surname is)…a banker? Yes, and I’m okay with that if he’s one of the evil ones (my late dad worked for Bankers Trust for 30 year in foreign exchange, but that doesn’t make him an evil banker). But I am glad no one has attacked the guy “because he’s Jewish.” Just like not all folks who work in banks are evil, not all Jews are evil, either. Misguided? Likely, but not all evil. BTW I’m a Gentile, and believer in Christ to boot.

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