Why RHNJ's Teresa Giuduce Was Sentenced to Prison

Real Housewives of New Jersey co-star Teresa Giudiuce was sentenced to 15 months in prison yesterday, while her husband Joe received a 41 month sentence, in a federal fraud case. The Indictment included 41 counts of bank fraud, loan application fraud, bankruptcy fraud, and mail and wire fraud. Joe was also charged with tax offenses. Teresa pleaded guilty to four counts and Joe to five.

While I've never seen their TV show, I think the case has some interesting elements worth discussing.


Teresa's sentencing guidelines were 21 to 27 months. Joe's guidelines were about double that. (The guidelines are not mandatory, and unless there is a mandatory minimum, which there was not in this case, the judge can impose a sentence below them.)

Teresa was hoping for probation. What went wrong? The judge said yesterday she had been inclined to grant probation, until Teresa submitted false information about her assets to the probation department which was preparing the presentence report for the court.

Backing up for a minute, here's how the Government described the fraud scheme in a pretrial pleading:

In sum, the Indictment charges Defendants in Count I with engaging in a mail and wire fraud conspiracy involving the submission of fraudulent mortgage and other loan applications and supporting documents to financial institutions and other lenders in order to obtain mortgage and other loans. The Defendants falsely represented on these loan applications and supporting documents that they were employed and/or receiving substantial salaries when, in fact, they were either not employed or not receiving such salaries.

The Defendants also created fake documents such as tax returns, Forms W-2, and paystubs, which they then submitted to the lenders in support of these fraudulent loan applications.

Counts 2 through 13 further charge Defendants with specific instances of bank and loan application fraud resulting from this unlawful agreement.

The Indictment charges in Counts 14 through 36 that, after accruing a large amount of mortgage and other debt in this fashion, Defendants engaged in bankruptcy fraud in connection with the Chapter 7 bankruptcy petition that they filed on October 29. 2009 in U.S. Bankruptcy Court in Newark. The Indictment alleges that during the course of the bankruptcy proceedings, the Defendants repeatedly concealed assets, made false oaths. and made false declarations.

Among other acts of concealment and false statements, Defendants intentionally failed to
disclose their ownership of certain income-producing properties as well as the income they were receiving from those properties. In many instances, these properties were the same properties that they had earlier acquired with the proceeds of false and fraudulent loans.

Finally, the Indictment also charges Giuseppe Giudice with the willful failure to file tax
returns on the basis of his failure to tile a federal income tax return for the years 2004 through 2008.

Now back to the sentencing. After a defendant pleads guilty in federal court, they have to meet with the Probation Department. The Probation Department is tasked with writing a presentence report to the Judge, with a description of the offense, the history of the offender, the applicable guidelines, and a recommended sentence.

To prepare the report, the Probation Department requires the defendant fill out financial disclosure forms, listing his or her assets and liabilities and monthly expenses. Among other things, this helps the court determine whether the defendant has the ability to pay a fine. These documents are very important to the process. Submitting false information to the probation department can result in a separate charge of making a false statement to a federal official or obstruction of justice. (In Teresa's case, according to the Plea Agreement, she had to fill out disclosure forms that were drafted by prosecutors, rather than Probation's usual forms.)

The Judge believes Teresa lied on her financial disclosure forms. That is an affront to the court. And the judge made no bones about the impact. Until the discrepancy of Teresa's disclosures came to light, the Judge had been considering probation.

During Teresa Giudice's sentencing, [Judge] Salas said she had even considered giving her probation combined with home confinement and community service but changed her mind because of the omissions.

"You are a savvy businesswoman. You know how to brand yourself," she said. "You tell me you didn't understand you had to cooperate? It defies logic."

Instead, Teresa got 15 months in prison. According to the New Jersey Record,

The judge noted the total value of the discrepancies at more than $75,000, and cited seven assets that were not listed on any document provided to the court.

What did she leave out?

[A] pool table, jewelry, all-terrain vehicles, closets full of pricey handbags and expensive shoes when reporting their assets.

According to the Judge:

“If [Teresa] had put something down, anything, I think [probation] would have been fine with that,” Salas said of Teresa’s reports to probation officers. “She put nothing down, nothing.”

She repeatedly challenged Teresa’s attorney, Klingeman, to explain the problem-riddled documents. “I’ve been a judge for seven years and I have yet to ever see the mount of confusion and work that went into these financial disclosures,” Salas said.

The Judge didn't buy the attorney's explanation, that Teresa had hired an accountant to prepare the documents and assumed he'd do it correctly. She put the blame squarely on Teresa, telling her:

“I’m not sure you respect this court. I’m not sure you respect our laws. And I’m not sure you understand what you’ve done,” Salas said.

Teresa's plea agreement (Doc. 24, available on PACER) specifically addressed what could happen if she failed to disclose all her assets to probation:

Teresa Giudice agrees to disclose all of her assets to the United States on a Financial Disclosure Statement to be provided by this Office and agrees to provide the Financial Disclosure
Statement by the date that a draft presentence report is circulated in this matter. Teresa Giudice agrees that if the government determines that she has intentionally failed to disclose assets on that Financial Disclosure Statement, that failure constitutes a material breach of this agreement.

In addition, Teresa Giudice consents to the administrative, civil, and/or criminal forfeiture of her interests in any assets that she failed to disclose on the Financial Disclosure Statement.
Should undisclosed assets that the defendant owns or in which the defendant has an interest be discovered, Teresa Giudice knowingly and voluntarily waives her right to any required
notice concerning the forfeiture of said assets. Teresa Giudice further agrees to execute any document necessary to effectuate the forfeiture of said assets.

It remains to be seen whether the Government will now seek to forfeit Teresa's handbags and shoes or her pool table.

Despite the judge's belief that Teresa lied on her disclosure forms, she still imposed a sentence below the guidelines. Her reasons: The couple has four daughters, Teresa has aging parents, and she was less culpable than her husband. She also gave the couple another break: They can serve their sentences sequentially. Teresa will begin her sentence in January. When she gets out, Joe will start his sentence.

Joe, however, may not make it home. Apparently, he's not a U.S. citizen, having been brought here as a baby by his parents. He says he didn't learn he wasn't a citizen until he was an adult. Bankruptcy fraud is an aggravated felony, requiring deportation at the end of his sentence.

The Guiduces must also pay almost $400k in restitution. Their bankruptcy discharge was denied so they still owe $13 million to creditors. Yet it doesn't seem to have had much of an impact on their lifestyle -- or else, as the judge said, they just don't get it:

When it was over, the couple left the federal courthouse in Newark holding hands. They were surrounded by security as they made their way to a white Mercedes-Benz SUV.

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  • Display: Sort:
    She has the tears now, but (5.00 / 3) (#4)
    by BarnBabe on Fri Oct 03, 2014 at 08:44:18 AM EST
    In case people do not know which one she is, maybe you remember promos showing her losing her temper in a restaurant, standing up, and tossing the table. She is the original mean girl of NJ and not as innocent as she appeared in court. They really do believe this is an invasion of their life style and laws do not pertain to them.

    In the beginning, first season, she would take her daughters shopping in one of the episodes and before leaving the house, she would grab some cash and toss it into her purse. I believe it was more than several thousand dollars at a time, like the loose change on the table. She would brag that she never paid with credit cards, only cash. As I was watching I was thinking, 'hasn't this woman ever heard of robbers or the IRS'?

    I know, it is not a show worth watching, but sometimes, when channel surfing, there really isn't anything worth watching. The few minutes I have seen of it recently are not even worth that time. There are more like her now. I certainly hope she is not expecting a new show after the 15 months, like Teressa is out of jail, what was it like? It is time for these people to get over their 15 minutes. Actually, it was time right from the first season. Total garbage.

    when you've seen one shopping center (5.00 / 4) (#12)
    by fishcamp on Fri Oct 03, 2014 at 02:15:33 PM EST
    you've already seen a mall...

    I still haven't figured out who in their (none / 0) (#5)
    by Anne on Fri Oct 03, 2014 at 09:03:16 AM EST
    right mind wants cameras on them all the time, or would trust that editing wouldn't change the context to maximize the drama.  Maybe it's all ego-driven, but it looks to me like ego has done in the Giudices, but good.

    Really, it's no wonder these people were under investigation; try watching some of the older seasons through the eyes of an IRS agent and all kinds of questions are raised.  How stupid does someone have to be, or how massive an ego would someone have to have, to participate in one of these shows if one's business wasn't being run strictly by the book?

    Maybe it's a little of both.

    I feel bad for their children, and not just because they appear to be the brattiest, most ill-behaved children I've seen in a long time.

    But I have no sympathy for the Giudices.


    Only the kids will really suffer (5.00 / 4) (#6)
    by Dadler on Fri Oct 03, 2014 at 09:16:23 AM EST
    I agree, and the parents seem to have the IQs of a pebble. No offense to pebbles. DISCLAIMER: I have to admit, along with re-runs of DRAGNET (my fave episode, of course, being the LSD one -- COP: "You sit down in that chair!" LSD KID: "Hey man, I AM the chair!"), me and a few friends of mine in LA watch this show fairly regularly for the sole reason of its absurdity rating. It's like tragi-comedy therapy for us. And, yes, I do feel guilty. Slightly. ;-)

    It's mindless, really. (none / 0) (#7)
    by Anne on Fri Oct 03, 2014 at 09:32:39 AM EST
    And the only other good thing is that it will leave you feeling that if this is what "rich" is, you don't want to be that.  Easy enough to see the fabulous accoutrements of wealth, but even easier to see that money is not a substitute for character and class.

    I just find it hilarious and pathetic all at the same time, that in every season of every iteration of the Real Housewives franchise, all these so-called "housewives" jet off on fabulous vacations where they mostly just sit around screaming at each other about all the petty insults, slights and drama they've endured at home at their fabulous parties, weddings and dinners.  

    It's a cage fight in 20,000 sq ft cages - but it's still a cage fight, even if the combatants are dripping in diamonds and designer clothes.


    Not all in NJ are like that (none / 0) (#14)
    by BarnBabe on Fri Oct 03, 2014 at 02:53:40 PM EST
    OK, they drive worse. I had Italian relatives there and they were normal and non screamers. My Aunt was so sweet and I loved spending summers visiting them. It meant trips to Seaside Heights, Asbury Park, the local swimming pool (daily) and of course, Palisades Park on a Monday night. I do not remember any shopping. What I really do remember when her family got together was the food. It was a gathering of laughter and conversation and Eat Eat. Yes, it was different from California and Florida family events, but it gave us a variety of experiences in life.  

    BTW, Dragnet is good but I am really enjoying Perry Mason. The music is in my head now. Heh.


    I can proudly and truthfully say that I've never (5.00 / 2) (#8)
    by Angel on Fri Oct 03, 2014 at 10:18:54 AM EST
    watched any of those housewives (and similar) reality TV shows.  Seriously, is there anything meaningful those people or those shows have to offer?  

    Hear, hear. (none / 0) (#9)
    by sarcastic unnamed one on Fri Oct 03, 2014 at 11:21:09 AM EST
    I watched RH of Miami (none / 0) (#15)
    by Jeralyn on Fri Oct 03, 2014 at 03:26:19 PM EST
    because I know and really like Lea Black (attorney Roy Black's wife) and it was fun to watch someone I know. Also sometimes Roy and their son would be on. The show also featured the Blacks' huge yearly charity event. I just never had a reason to watch any of the other RH shows.

    Ugh (none / 0) (#1)
    by ruffian on Fri Oct 03, 2014 at 04:22:38 AM EST
    I'd say 'they just don't get it' covers it. She is being sentenced for creating false financial disclosure documents to get loans...and then for her probation hearing she provides more false disclosure documents. I can see where that would not sit well with the judge.

    Reality TV Star meets Reality (5.00 / 1) (#2)
    by Mr Natural on Fri Oct 03, 2014 at 07:50:11 AM EST
    Did the Real Housewives show cameras follow them through this trial?  Are the producers are planning a couple of prison episodes?

    "Orange is the New Black" (5.00 / 1) (#3)
    by jbindc on Fri Oct 03, 2014 at 08:31:57 AM EST
    The Real Butched In Housewives... (none / 0) (#10)
    by ScottW714 on Fri Oct 03, 2014 at 12:13:35 PM EST
    ...of cell block C.

    That (none / 0) (#17)
    by CaptHowdy on Fri Oct 03, 2014 at 06:55:38 PM EST
    i would watch

    An Answer to Your Question (none / 0) (#11)
    by ScottW714 on Fri Oct 03, 2014 at 01:04:13 PM EST
    It remains to be seen whether the Government will now seek to forfeit Teresa's handbags and shoes or her pool table.

    Not really an answer, more like a segue , but Tuesday, the state that thinks evolution is a myth because their commitment to god is so profound that the bible is taken literal, just auctioned off thousands of seized sex toys.

    Kansas state government is on the verge of a financial windfall with the auctioning of thousands of sex toys seized by the revenue department for nonpayment of income, withholding and sales taxes, an official said Wednesday.

    Online shoppers for adult DVDs, novelty items, clothing and other products can participate in a bonanza shopping experience resulting from the four-county raid on a Kansas company known as United Outlets LLC.

    Senate Minority Leader Anthony Hensley, D-Topeka, said there was irony in disclosure of the sex toy sale, while political allies of Republican Gov. Sam Brownback denounced Democratic gubernatorial nominee Paul Davis for a recent report that Davis had been in a Kansas strip club 16 years ago at the same time law enforcement officers raided the nightspot.

    "Brownback is so desperate to fill the massive hole in the state budget caused by his reckless income tax cuts that the state of Kansas is now in the porn business," the Topeka legislator said. "This is the same governor whose supporters spent this past week attacking his opponent for a strip club incident."  LINK

    Oh, I've seen her and joe on the show (none / 0) (#13)
    by ZtoA on Fri Oct 03, 2014 at 02:19:33 PM EST
    When I visit my daughter in LA there seems to be a Real Housewives dedicated TV channel and I'll watch it (a little bit) with an apartment-mate of hers who is from NJ. Then we discuss it seriously (meaning we make fun of the show and the Beverly Hills and Orange County housewives shows too).

    I think Joe should be deported/banished....to New Jersey. I wonder if cameras will be allowed in jail, because the show producers could really capitalize on those jail sentences.

    J, fascinating legal facts you present too.  

    The network (none / 0) (#18)
    by Amiss on Fri Oct 03, 2014 at 11:11:01 PM EST
    Dedicated to the Real Housewives franchises,I guess you would call them is BRAVO network. I enjoy the TOP CHEF shows shot by BRAVO as well.

    Okay. (none / 0) (#16)
    by Ga6thDem on Fri Oct 03, 2014 at 03:31:04 PM EST
    I confess. I have watched the real housewives shows. I have not watched RHONJ much this year but watched it previous years. I used to watch RHONY until they changed almost the entire cast. I have watched RHOBH the first season or two and watched RHOOC until this year. Pretty much the only one I watched recently is RHONJ and really just to see what was going on with Teresa's family and her brother and sister in law who are also on the show.

    Me, too (none / 0) (#19)
    by BackFromOhio on Sun Oct 05, 2014 at 01:53:23 PM EST
    I am fascinated by the psychology of the shows.... and the audience. Teresa has quite a following. Her relationships with the other housewives mirrors her relationship to the law -- denial and refusal to accept responsibility for her actions. Andy Cohen has a post-sentencing segment with the Guidices tonight on Watch What Happens Live; it will be interesting to see how the couple's (mis)deeds are addressed. Teresa, however, is not altogether the typical Bravo housewife; whether you like them or not, many of them have built successful, apparently legitimate businesses. I don't necessarily laud some of the character attributes of the business-women housewives, but I do respect their hard work.