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Television’s “Real Housewives” Star Convicted of Fraud and Bankruptcy

TV star Teresa Giudice was convicted of fraud in the filing of her federal personal bankruptcy petition and has been sentenced to prison.  How did this happen?  We don’t follow this tv show but we learned that when Giudice filed for Chapter 7 bankruptcy protection in 2009 along with her husband, her Petition and Schedules listed $13.5 million in debts with assets of $2,261,150 and an income of $79,000 per year.  Given that they have four children, these simple facts would lead to a straight forward discharge of debt and allow for a “fresh start” under the bankruptcy law. 

Ms. Giudice stated that the bankruptcy was the result of “real estate ventures [that] failed.”  In 2011 they apparently withdrew their personal bankruptcy; however, their false testimony on the Petition and in Court may have sealed their fate.

Disclosing All Assets in Federal Bankruptcy Petition and Schedules

The Giudice family disclosed $11 million in debt, including $5 million in investment mortgages and $2.2 million of that in their home mortgage, and debts to credit cards and medical providers.  Unfortunately, the Giudice family neglected to disclose assets in their Petition and Schedules.  Further, they testified falsely at the 341 Creditors’ Hearing falsely.  We understand that they neglected to include assets such as a publishing contract with Hyperion regarding the book “Skinny Italian” ($280,000 in two advances), ownership of TG Fabulicious, LLC or the real estate contained in another company called 1601 Maple Avenue Association, LLC.  News reports of a shopping spree after they filed for bankruptcy protection, paying $60,000 for high end items such as curtains and home accessories may have indicated that there were more assets than disclosed.

The federal 39 count indictment indicated that the Giudice family failed to disclose assets, failed to disclose information about their businesses, failed to disclose information about their rental property and failed to disclose accurate information about Terese’s TV salary.  The indictment also included counts of failing to file tax returns by Joe Giudice during a period when he earned over one million dollars.

Penalties for Bankruptcy Fraud

Teresa Giudice was given 15 month federal prison sentence while her husband, Joe Giudice was given a 41 month sentence.  The guilty findings were for fraud, bankruptcy fraud, mail fraud, and conspiracy to commit wire fraud.  Because they have young children the bankruptcy judge gave them staggered sentences, so Mr. Giudice will remain home while the tv star serves her time in prison.  When Teresa returns from her sentence Joe’s will begin.  In addition, the Court ordered $414,000 in restitution payments; $200,000 of which apparently has already been paid.  Further, as they did not get a discharge in bankruptcy, all of their debt is outstanding.

Bankruptcy and Legal Malpractice

The Giudice family has sued their bankruptcy attorney for legal malpractice.  It is not clear what information the Teresa and Joe Giudice provided to their attorney, however, a bankruptcy attorney can only work with the information they secure from the client.  On the other hand, an experienced bankruptcy attorney will work hard to be sure that all possible information is on the Petition and Schedules and that the debtors are prepared to testify honestly and fully at the creditors hearing.

Bankruptcy Fraud and Immigration

We understand that Joe Giudice is not a US citizen so his plea in federal court could have negative ramifications for his immigration status following his prison sentence.  His prison term follows his wife, and then he may be deported to Italy.

Hire An Experienced Bankruptcy Attorney

Don’t commit fraud.  Bankruptcy is an excellent way of getting a “fresh start” under the law.  Retain Attorney Neil Burns who has 29 years of experience.  He offers a free consultation.  Call 617-227-7423.

 

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