“Real Housewives” Stars Plead Guilty to Bankruptcy Fraud

Just one month before their trial was to begin, Teresa and Joe Giudice entered guilty pleas to bankruptcy fraud, mail fraud and other charges in Newark Federal Court. The two are stars of the Bravo cable channel’s Real Housewives of New Jersey. Bravo channel has not commented whether the Giudices will return for Season 6 of the show, set to start filming later this year.

Teresa Giudice faces 27 months in federal prison and has agreed to pay $200,000 to the government at the time of her sentencing. Joe Giudice could get 46 months. Joe, who is not a U.S. citizen, will face a deportation hearing after his jail time that will “likely result in … your being removed from the United States,” said Federal Judge Esther Salas at the time the Giudices entered their pleas. The couple will also forfeit additional cash in an amount to be determined by the judge.

Federal prosecutors charged the couple with 41 counts of fraud including allegations that they concealed about $4.6 million in mortgages, withdrawals from home equity lines of credit and construction loans. Joe also failed to file tax returns for the years 2004 through 2008. During that time his income is said to have fluctuated wildly; the indictment states he made $323,481 in 2005 and $26,194 in 2006. During bankruptcy proceedings, Teresa waived her bankruptcy discharge after the trustee accused the couple of concealing assets. Joe pled the Fifth Amendment when asked about hidden assets. Reports say that the couple will ask the court to stagger their jail terms, so that one parent is available at home to care for their four children, Gia, 13, Gabriella, 9, Miliani, 8, and Audriana, 4.

The federal bankruptcy laws can discharge debt and help a struggling family restructure its finances. However, debtors in bankruptcy are expected to be honest and forthcoming about their income, assets, expenses, and debts. Dishonesty during this time has severe consequences, including federal criminal charges.