NEWARK, N.J. (CBSNewYork/AP) – Two stars of the “Real Housewives of New Jersey” were indicted Monday on federal fraud charges, accused of exaggerating their income while applying for loans before their TV show debuted in 2009, then hiding their improving fortunes in a bankruptcy filing after their first season aired.
Teresa Giudice, 41, and her husband Giuseppe “Joe” Giudice, 43, of Montville Township, were charged in a 39-count indictment with conspiracy to commit mail and wire fraud, bank fraud, making false statements on loan applications and bankruptcy fraud.
The couple submitted fraudulent mortgage and other loan applications from 2001 through 2008, a year before their show debuted on Bravo, making phony claims about their employment status and salaries, the indictment said.
Prosecutors allege the Giudices received about $4.6 million in mortgages, withdrawals from home equity lines of credit and construction loans. In some instances the couple filed fake W-2s and tax returns.
Joe Giudice also failed to file tax returns for the years 2004 through 2008, when he is alleged to have earned nearly $1 million, the government said. During that time his income allegedly fluctuated wildly; the indictment states he made $323,481 in 2005 and $26,194 in 2006.
The reality TV stars were scheduled to make their initial court appearances Tuesday.
Teresa’s attorney, Henry Klingeman, said she would plead not guilty.
“The judicial process that begins today with the indictment is the search for the truth. As it moves forward, we look forward to vindicating her,” Klingeman told WCBS 880’s Jim Smith. “She’s holding up well, she’s with her family and I’m sure she’ll have more to say as the case unfolds and we learn more about the government’s allegations.”
Joe’s attorney did not return a message seeking comment.
Teresa also issued her own statement, saying it was a difficult day for her family, that she supports her husband, and that she hopes to resolve the case with the government as quickly as possible.
“I am committed to my family and intend to maintain our lives in the best way possible, which includes continuing my career,” she said.
A Bravo spokesman had no comment.
Teresa is best known for flipping a table during an argument during the show’s first season, and her stained relationship with her brother’s wife.
The indictment alleges “the Giudices lied to the bankruptcy court, to the IRS and to a number of banks,” U.S. Attorney Paul Fishman said.
“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,” he said.
When Teresa filed for a mortgage loan of $121,000 in 2001, she falsely claimed she worked as an executive assistant, submitting fake W-2 forms and fake paystubs as part of the ruse, the indictment said. In 2004, she claimed she was the owner of a stucco company and made $14,750 a month.
In their petition for bankruptcy protection, initiated in October 2009, the couple concealed businesses they owned, rental income they received, and Teresa’s true income from the “Real Housewives,” website sales and personal appearances, the indictment said.
Teresa failed to report TG Fabulicious, a business she created after the bankruptcy filing to sell products and capitalize on her fame. Prosecutors said the couple also hid their anticipated increase in income from the then-upcoming second year of the show, which is now in its fifth season.
Teresa made $110,677 from the reality show, website sales and personal appearances, according to the indictment.
In their 2009 bankruptcy filing, the couple stated their monthly take-home pay was $16,583, but $10,000 was from “monthly assistance from family members” and Bravo income.
It also said they owed $2.2 million in mortgages, $13,000 to Neiman Marcus and Nordstrom and nearly $12,000 to a fertility clinic. However, the couple stated that their wardrobe was worth $3,000. Teresa was criticized for, and defended, spending $60,000 on home furnishings after the filing.
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