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obligations. Petitioner was free to pay the ordered obligations
from whatever sources he had available. There is no mention of a
qualified domestic relations order (QDRO) in the divorce
judgment, nor any reference to making Ms. Bougas an alternate
payee on petitioner’s IRA.
In a June 27, 1997, divorce hearing held at the New Jersey
court, the Honorable Milton H. Gelzer, J.S.C., suggested that
petitioner withdraw pension funds to prevent foreclosure on the
marital home, even though such withdrawal may be subject to an
early withdrawal penalty. There was no mention of a QDRO at the
divorce hearing.
Sometime prior to the divorce, petitioner rolled over an
amount from his 401(k) retirement plan at Salomon, Smith Barney
into an IRA at Charles Schwab. Because petitioner’s resources
were limited at the time he was required to pay the amounts
ordered in the divorce judgment, he chose to take a distribution
from his IRA. Petitioner requested a distribution from his IRA
in the amount of $250,000, without presenting the plan
administrator with a copy of the divorce judgment. Charles
Schwab honored petitioner’s request and distributed a check to
petitioner in his name. On March 20, 1998, petitioner deposited
the $250,000 check into his personal checking account at Republic
National Bank of New York (RNB).
On March 31, 1998, petitioner paid Ms. Bougas by personal
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Last modified: May 25, 2011