The case

A couple divorced by agreement in 2007 and lived separately without dispute for 16 years. Last year the man suddenly sued the woman in Xuzhou, Jiangsu, seeking division of property totalling about RMB 140 million; because both lived in Shanghai and the main assets were there, the case was transferred to the Putuo District People’s Court in Shanghai. At trial, each described tens of millions of yuan in repayments, refunds and stock gains in their names, but neither could explain the lawful source of these huge sums. Before retiring, the man was a deputy department-level official in the railway system, and the woman an ordinary police officer. The court found that the case involved suspected crimes, dismissed the action, referred the leads to the police and copied the discipline-inspection and supervisory authorities.

Why didn’t the court simply divide the property?

In civil proceedings, dividing joint marital property presupposes that the property is lawful. Here the parties’ positions and income clearly didn’t match the huge assets claimed, and neither could prove the source of the funds. That went beyond an ordinary property dispute and into the territory of criminal offences, so the court channelled the case into criminal and discipline-inspection procedures rather than ruling on it as a civil case.

Why would anyone use divorce litigation to “launder” property?

Divorce property litigation should be a legal tool to clarify ownership of lawful marital property and divide it fairly. But a few parties try to use a court’s division judgment to dress property of unknown origin as “lawful property”. Once spotted, this not only fails but puts the parties squarely in the spotlight of a criminal investigation — a plan that backfires.

How Wang Xin’s team can help

  • Divorce property division litigation
  • Identifying and responding to sham-litigation risk
  • Defense in duty-crime cases
  • Reviewing the lawfulness of property in family cases

If you need professional advice on divorce property division or the lawfulness of assets, contact Wang Xin: phone +86 186-0113-9509, WeChat wang223040.

Quick answers

Will a Chinese court divide marital property whose source cannot be explained?
No. Division in civil proceedings presupposes lawful property. Where claimed wealth clearly exceeds the parties’ status and income and its source cannot be shown, the court may dismiss the case and refer it to police and discipline-inspection authorities.
Can divorce litigation be used to legitimise illicit assets in China?
Attempting it is risky: once detected, it fails and puts the parties under criminal investigation, as in this Shanghai Putuo case.

This is an English edition of Wang Xin’s original Chinese article, 退休16年后突然打官司分9870万元家产？法院：移交公安. It explains the law of the People’s Republic of China in general terms and is not legal advice for any particular case; outcomes depend on the specific facts and on how local authorities apply the rules.