Reality Bites for Teresa Giudice - A Star with Real Tax Woes

By Teresa Ambord
 
Reality star Teresa Giudice has been in money trouble for a while. On July 29, it all got a whole lot worse when a federal grand jury handed down a thirty-nine count indictment against her and husband Joe (real name Giuseppe). 
 
Teresa and Joe and their four young daughters live in Montville Township, New Jersey. That makes her a New Jersey housewife and got her a starring role in the Real Housewives of New Jersey, now in its fifth season on Bravo. Joe and their daughters also appear on the show from time to time. 
 
Background 
Three years ago, the couple filed for Chapter 7 bankruptcy in a Newark court, listing $11 million in debt against an annual income of about $79,000 per year. Just a few days later, according to a New York Post report, they were spotted on a major shopping spree  mostly for items to redecorate their home  which cost roughly $54,000. They might have gotten away with it, had they not been recognized. Note to self: If your face is plastered all over the TV, don't expect privacy ever again. 
 
The bankruptcy trustee subsequently asked the judge to deny their petition for bankruptcy relief. At that time, the trustee also filed a complaint alleging significant falsehoods and omissions in the couple's paperwork, including the omission of a $250,000 book deal Teresa signed one week earlier, plus the possibility of falsified tax returns. Also related to their bankruptcy filing, they're accused of concealing businesses they owned, rental income they received, and misstating Teresa's true income from Real Housewives. At the time, Teresa staunchly defended her family, chalking up the troubles to some recent bad luck with her husband's real estate investments. 
 
More Serious than Previously Thought
In July 2013, however, the federal grand jury saw it as more than a little bad luck. The thirty-nine count indictment is based mostly on allegations of wrongdoing going back to the years before Teresa ever appeared on Real Housewives.
 
US Attorney Paul Fishman said the couple is charged with various financial crimes, including conspiracy to:
  • Commit mail and wire fraud.
  • Defraud lenders by making false statements on loan applications.
  • Commit bankruptcy fraud (hiding assets during their bankruptcy case).
"The indictment returned today alleges the Giudices lied to the bankruptcy court, to the IRS, and to a number of banks. Everyone has an obligation to tell the truth when dealing with the courts, paying their taxes, and applying for loans or mortgages. That's reality," said Fishman.
 
According to the indictment, the false loan applications were submitted from 2001 through 2008. One mortgage application was allegedly submitted by Teresa in 2001 for $121,000 using falsified documentation of income. People.com says she claimed to have worked as an executive assistant and submitted fake W-2s and fake pay stubs. 
 
According to the government, Joe failed to file tax returns for 2004 through 2008, when he is believed to have earned nearly $1 million. 
 
Both Teresa and Joe face up to fifty years in prison if convicted on all charges.
 
Shantelle P. Kitchen, special agent in charge, IRS-Criminal Investigation, Newark Field Office, told Fox News, "The privilege of living well in the United States carries certain real responsibilities. . . . Today's indictment alleges the Giuidices did not live up to their responsibilities by failing to file tax returns, falsifying loan applications, and concealing assets in their bankruptcy petition." 
 
Teresa herself told reporters she stands behind her husband. "Today is a most difficult day for our family. I support Joe and, as a wonderful husband and father, I know he wants only the best for our lovely daughters and me. I am committed to my family and intend to maintain our lives in the best way possible, which includes continuing my career. As a result, I am hopeful that we will resolve this matter with the government as quickly as possible."
 
Teresa's attorney told reporters the couple will plead not guilty. "We look forward to vindicating her." 
 
Related article: 
 

You may like these other stories...

IRS must take oath on Lerner emails: judgeMackenzie Weinger of Politico reported on Thursday that a federal judge ordered the IRS to explain under oath how it lost emails connected to Lois Lerner, the ex-IRS official at the...
The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.The measure, HR 4718, which was crafted by Representative Pat...
The Republican-led House of Representatives is expected to pass a bill this week that would permanently extend the bonus depreciation tax break. But don’t expect President Obama to sign it.The Obama administration said...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.