Ever since Bernie Madoff's Ponzi scheme was revealed several years ago, many Florida residents have been facing the long-term consequences. Florida was one of Madoff's biggest hot spots for investors.

Interestingly, the Ponzi scheme has even had an impact on divorce cases in Florida. With so many joint marital assets tied up in Madoff's bogus investments, the fairness of many divorce settlements have since been called into question.

Recently, another New-York-based Ponzi scheme has been causing legal snags in the realm of family law. This time, it involved the division of assets between the alleged perpetrator and his ex-wife.

In 2007, a woman divorced her husband, who was a wealthy trader in New York. The judge ordered the husband to pay his wife $12.5 million biannually until the year 2020. However, in 2009 the man was accused by federal investigators of running a 13-year Ponzi scheme.

After the charges were filed, a judge put a freeze on $7.59 million of the woman's assets. Presumably, this money was illegally obtained in her husband's fraud.

But she had no knowledge of the Ponzi scheme and was never implicated with her husband. The question to be decided was: should she still be eligible to receive this stolen money as part of a divorce settlement?

Interestingly, the answer was yes. Earlier this month, the 2nd Circuit Court of Appeals agreed to unfreeze the woman's assets. The Court was applying a separate ruling made earlier this summer by the state's highest court.

In that ruling, the New York Court of Appeals said that proceeds from a fraud can legally constitute marital property. Furthermore, if an innocent spouse acted in good faith, a divorce decree can give that spouse a right to her fair share of those proceeds.

Cases like this are difficult because while the money was obtained illegally, a spouse may have had no part in the fraud or any knowledge of it. Should that spouse be penalized in a divorce settlement because of her ex's misdeeds?

Source: Thomson Reuters Westlaw News, "Ex-wife may recover assets tied to Ponzi scheme: court," Sept. 15, 2011