What Marriage of Mohammadijoo Teaches Us About Accountability in Divorce
Money vanishing across borders. Financial secrets. A paper trail gone missing. No, this isn’t the plot of a Netflix series—it’s a real California family law case.
In Marriage of Mohammadijoo & Dadashian (2024) 102 Cal.App.5th 392, the Court of Appeal tackled a thorny question: when money disappears post-separation—and only one spouse had control—who’s responsible for proving where it went?
This case extends and sharpens a rule that can make or break high-stakes property division in divorce: the burden-shifting framework from Marriage of Margulis.
The Setup: International Investments, Informal Transfers, and Disappearing Dollars
The couple lived far beyond their means, using large cash infusions from Iran—transferred through an informal, sanctions-dodging network known as Havaleh, where trusted intermediaries move money without traditional banking.
Two major transactions came under scrutiny:
- 2007: Husband sold inherited real estate in Iran for $170,000
- He said he gave Wife the money to invest in Iranian property.
- She denied receiving the money and gave inconsistent answers.
- 2008: Wife withdrew $150,000 from a home equity line of credit (HELOC)—a community asset—and sent it to her brother in Iran to invest on the couple’s behalf.
The couple separated in 2013, and Husband later discovered that all records of their Iranian investments had vanished.
When he asked Wife about the money, she reportedly told him:
“Do not ask about the money. There’s no more money in Iran.”
The Trial Court: 🤷♂️ “We Can’t Say What Happened”
The trial court didn’t make any findings about what ultimately happened to either the $170K inheritance or the $150K HELOC transfer. It ruled there was no credible evidence either way.
Even more critically, the trial court did not shift the burden of proof to either party—despite evidence that each spouse had sole control over certain funds.
The Court of Appeal: You Don’t Just Get to Say ‘It’s Gone’
🔁 Enter the Margulis Burden-Shifting Rule
When one spouse has exclusive control over assets after separation, the burden shifts to that spouse to prove:
- Where the money went
- That the expenditures were reasonable, or
- That the value declined for legitimate reasons
This framework is designed to protect non-managing spouses who are otherwise left guessing—or being blamed—for missing funds they never controlled.
⚖️ Mohammadijoo Expands the Rule in Two Big Ways
1️ Applies Even When a Third Party Is Managing the Funds
Here, Wife claimed she gave her brother full authority to manage the $150K sent to Iran. But she still had control of the relationship, communication, and oversight.
The court said the Margulis rule applies when one spouse controls the relationship with the third-party manager—not just the money.
So Wife still had to account for the missing funds—and the trial court erred by not requiring her to.
2️ Also Applies to Separate Property
The court went further, saying the burden-shifting rule also applies to a spouse entrusted with separate propertybelonging to the other.
Here, Husband claimed Wife mishandled his inheritance. Even though it’s separate property, the court said:
A spouse’s fiduciary duty under Family Code §721 includes the duty to manage separate property in good faith.
So if a spouse controls your separate assets during marriage, and those assets vanish post-separation, they must explain where it went—or risk being charged with the full value.
💡 What This Case Means for You
- Trust isn’t enough. If you allow your spouse to manage money—especially after separation—keep a clear, traceable paper trail.
- You may not have to prove the money is gone—they do. If your ex had exclusive post-separation control over an asset, they must account for it under the Margulis rule.
- The rule covers more than community property. Spouses have fiduciary duties over separate property too.
- Courts will look beyond borders. Even informal financial networks like Havaleh can’t shield a spouse from accountability.
🧾 Final Word: Paper Trails Matter. So Does Who Held the Reins.
If money went missing during or after your marriage, and your ex had control, you may not need to prove every dollar’s path. Instead, under Mohammadijoo, they must account for it—or be charged for it.
Have questions about hidden assets or missing money in a divorce? Reach out my Office- The Law Office of Channe G. Coles for a consultation. We know how to track the money—and make the law work for you.
Channe G. Coles
Santa Barbara & Ventura Counties
Family Law Attorney
