LEGAL NEWS

posted : Apr 08, 2016

Divorce of the Rich, two Harley-Davidson motorcycles, Beautiful model and famous political names. Epic divorce of multi-millionaire Cancer Centers founder goes to trial.

Money in politics. Allegations that he made $12 million in illegal campaign contributions, though federal regulators split on whether there was a violation.

 By: Ben T. Austin for Georgia Weekly Post

 

Fresh-cut flowers every week. Dining at gourmet restaurants in Chicago. Travel by private jet to vacation homes in Colorado, Michigan and the Virgin Islands, with servants in each location.

 

All that was just part of the "lavish" lifestyle Richard and Alicia Stephenson enjoyed during their nearly 25-year marriage, as described in court papers filed by Alicia.

Richard Stephenson, CEO of Cancer Treatment Centers of America, left, and his wife, Alicia Stephenson.

 

It's all over now — a judge granted the Barrington Hills couple a dissolution of their marriage in January. But six years after the divorce papers were filed, the case is scheduled to go to trial Tuesday after the couple has failed to reach a settlement on dividing their considerable assets.

 

The case could reveal the finances of mult-imillionaire Richard Stephenson, the founder and chairman of Cancer Treatment Centers of America. That in turn could shed light on allegations that he made $12 million in illegal campaign contributions, though federal regulators split on whether there was a violation.

 

Attorneys say the Stephensons' breakup represents one of the longest, most contentious local divorces in recent memory. The case is on its second judge and has involved numerous attorneys, two contempt of court orders, two appellate court rulings and even an obscene gesture flashed in court.

 

Now, a McHenry County judge will consider whether Alicia Stephenson is entitled to a share of any of the millions of dollars her ex-husband controls, or whether a prenuptial agreement prohibits that.

 

The acrimonious breakup contrasts sharply with the celebrations to mark their wedding in 1991.

 

Alicia Valentine was a 26-year-old model and fashion coordinator with a modest income when she married Richard, then 51, in a black-tie ceremony with 500 guests at his 120-acre Tudor Oaks estate in Barrington Hills. The festivities lasted for five days and included a golf tournament, laser show and performances by members of the Drifters, the Spinners and the Chicago Symphony Orchestra.

 

Richard was a divorced father of four, an investment banker and CEO of Cancer Treatment Centers, which he had founded in Illinois three years earlier, citing his own mother's death from cancer as one motivation. The privately held, for-profit company started with one medical center in Zion before growing to five hospitals nationwide.

Before the marriage, Alicia signed a prenuptial agreement stating that, in the event they divorced, Richard did not want that to interfere with his children's inheritance. According to the agreement, all property that each of them had before the marriage or obtained individually during the marriage would remain "forever" their personal and separate "non-marital" property, and that the Tudor Oaks home would remain his.

 

Each would be free to control their separate property "as if the parties had not been joined in marriage."

That agreement came into play in 2009, when Alicia filed for divorce, citing "irreconcilable differences" and "mental cruelty." The couple had one daughter who was a minor at the time of the filing and was the subject of arguments over her custody but who is now an adult.

 

In a sworn statement, Alicia said the couple acquired substantial marital property including a residence, furniture and fixtures, retirement accounts and securities. She identified joint marital property including a wedding gown, a copper pot collection, Baccarat glassware and Versace dishes, a Robert Guenther bowl, plus a Porsche 911, Mercedes S600 and two Harley-Davidson motorcycles.

 

Alicia Stephenson made more than $200,000 working at Cancer Centers in 2009 — her attorney said she served on the board of a cancer center hospital and a fundraising arm — but claimed that monthly expenses to maintain her lifestyle would exceed $150,000. The judge found her needs were $47,000 a month.

Another aspect of the dispute involved an allegation that broadened the scope of the case to the political arena. Alicia objected in court to Richard's transfer of $12 million she claimed was potentially part of her assets and asked for an accounting of his spending.

 

That followed a 2012 Washington Post report that Richard Stephenson contributed about $12 million to FreedomWorks for America, a conservative political action committee for which he was a director, leading up to the presidential election. Two watchdog groups complained about the deal to the Federal Election Commission, arguing that the source of the money was hidden because it was funneled through two corporations. Federal law prohibits making campaign contributions in the name of another.

 

On April 1, more than three years after the complaint was filed, the FEC finally voted. The three Republicans on the commission voted against further investigation, saying the law was unclear. The three Democrats on the commission ruled that the contribution clearly violated election law.

 

As is common in FEC cases, the 3-3 vote meant the commission took no disciplinary action, and the case was closed.

Back in court, Richard's attorneys raised objections that Alicia's court filings included Richard's confidential information about his finances and his business, such as Social Security and bank account numbers. The judge ordered those documents sealed from the public in 2010. The treatment centers also sued Alicia for allegedly entering Richard's home without permission to take proprietary documents, though an attorney for Richard said that case was dismissed.

 

In one of the stranger moments during the many hearings on the case, the judge in 2011 found one of Richard's attorneys in contempt of court for giving the finger to one of Alicia's attorneys. Richard was also later found in contempt for failing to turn over certain documents, a ruling that was upheld by the Illinois Appellate Court.

"This case is extremely unusual," said one of Alicia's attorneys, Elizabeth Felt Wakeman. "It involves billions of dollars in assets, and a party refusing to provide information."

Richard Stephenson's attorneys counter that he has supplied all required documents, though that remains a running dispute between the two sides.

 

One of the more explosive accusations in the case came in 2014, when Alicia's attorneys claimed that Richard was planning to spend millions of dollars for a wedding or civil union while he and Alicia were still married. Richard's attorneys denied that the event was a wedding or civil union, calling it a "union celebration," paid for by his children.

 

Since then, Richard has appeared at numerous events with Stacie Macari, a chiropractor from Indiana who has since become Stacie Stephenson and is now listed on the Cancer Treatment Centers' website as chairman of functional medicine. Other websites list her as Richard's wife, though his attorney declined to confirm whether he has remarried.

The trial due to start Tuesday is to determine how to divide Richard's and Alicia's assets. But the former couple are expected to return to court in the fall when the judge is due to rule on the amount of Alicia's maintenance payments.

One of Richard Stephenson's attorneys, David Grund, who directs the family law program at IIT Chicago-Kent College of Law, dismissed claims that the trial would reveal information about campaign contributions, saying that was one of many "wild accusations."

 

Grund, who was not the attorney who was previously held in contempt in the case, said he hoped that Judge James Cowlin will nullify Alicia's claims to marital property and will simply enforce the prenuptial agreement that's already been found valid.

"It's a matter of enforcement, and that's it," Grund said.

Grund noted that this was longer than any divorce case he could recall and hoped for a quick resolution so each side can "get on with their lives."

"That's a very, very important element," he said in court transcripts, "... to live life that's perhaps left to a 76-year-old man."

Exactly how much money is at stake remains unclear. Richard reported income of $54 million in 2008, but his attorneys said that was unusually high for him and that he actually spent $10 million more than he earned that year after taxes were factored in.

 

"My client makes a lot of money ... and has a lot of assets and can afford to pay any maintenance which this Court orders," Grund conceded in court. He went on to say that he "certainly" didn't expect that figure to be something like $2 million a year, at which point the judge interrupted him, saying he wasn't sure what the other side was seeking.

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