Real Housewives Stars Sentenced For Mortgage Fraud

Reality finally caught up with Teresa and Giuseppe ‘Joe’ Giudice, stars of the Bravo reality series ‘Real Housewives of New Jersey,’ who were sentenced Thursday to 15-month and 41-month federal prison terms, respectively, for their roles in a mortgage fraud and bankruptcy scheme.

In addition, the Giudices each face two years of probation and must pay $415,588 in restitution, the U.S. Department of Justice announced. What's more, Joe Giudice, who is a native of Italy, faces possible deportation under INS rules.

In what some might consider an act of leniency, U.S. District Judge Esther Salas in Newark federal court ruled that the Giudices could serve their prison terms consecutively, so as to reduce the impact on their four young children. As per the sentence, Teresa Giudice is to report to prison on Jan. 5, 2015, to begin serving her sentence while Joe Giudice will report after his wife finishes serving her term.

In February, the Giudices each pleaded guilty to one count of conspiracy to commit mail and wire fraud, one count of bankruptcy fraud by concealment of assets, one count of bankruptcy fraud by false oaths, and one count of bankruptcy fraud by false declarations. In addition, Joe Giudice pleaded guilty to one count of failure to file a tax return.

Authorities allege that from September 2001 through September 2008 the Giudices engaged in a mail and wire fraud scheme in which they submitted fraudulent applications and supporting documents to lenders in order to obtain mortgages and other loans. More specifically, the Giudices falsely represented on loan applications and supporting documents that they were employed and/or receiving substantial salaries when they were either not employed or not receiving such salaries.

Authorities claim that in September 2001, Teresa Giudice took out a $121,500 mortgage loan, but falsely represented on the application she was employed as an executive assistant. She also submitted fake W-2 forms and fake pay stubs purportedly issued by her employer.

Federal authorities further allege that in July 2005, the Giudices took out a $361,250 mortgage, but falsely claimed on the application that Teresa was employed as a realtor and that she made a monthly salary of $15,000, when in fact she was not employed at the time.

Authorities also allege that the Giudices hid certain assets after filing for Chapter 7 bankruptcy in October 2009, including income from businesses they owned as well as income they received from a rental property. What's more, they allegedly concealed Teresa Giudice's true income from the television show ‘The Real Housewives of New Jersey,’ website sales and personal and magazine appearances. The Giudices also concealed their anticipated increase in income from the then-upcoming second season of the show.

Joe Giudice also admitted that during tax years 2004 through 2008, he received income totaling $996,459 but did not file tax returns for those years.

‘The Giudices together deceived financial institutions with patently false loan applications; were dishonest when they sought the protection of the bankruptcy court and hid assets and income from the trustee; and Giuseppe Giudice cheated the government by failing to pay taxes on years of significant income,’ says U.S. Attorney Paul J. Fishman in the release. ‘When they pleaded guilty, both admitted swearing to statements they knew were lies. Prison is the appropriate penalty for these serious financial crimes.’

‘The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General is pleased to join the U.S. Attorney's Office and our law enforcement partners in this final phase of the prosecution,’ adds Fred W. Gibson, principal deputy inspector general of the FDIC. ‘Today's sentences highlight the seriousness of offenses that undermine the integrity of the financial services industry. We are committed in our efforts to uncover such fraudulent schemes that cause harm to FDIC-insured institutions and to the nation's housing industry.’


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