Whoever said that all publicity is good publicity probably hasn’t spoken to Joe and Teresa Guidice recently. The Real Housewives of New Jersey stars were charged in a 41 count indictment with a conspiracy to commit mail and wire fraud, bank fraud, and making false statements on loan applications and bankruptcy fraud. Had they been found guilty of all charges, each could have received sentences of 50 years in prison. Although they might be used to video cameras taping their every move, it was probably different having those cameras follow them from court with dozens of reporters yelling at them to make a comment.

Joe and Teresa Guidice Fraud Charges

Ultimately the Guidice’s pleaded guilty to fraud charges and both will face time in prison. Joe, who is still an Italian citizen, could face deportation when his sentence has been completed, and Judge Esther Salas, the federal judge in charge of the case suggested that deportation was indeed in Joe’s future once he is released from prison. When faced with the charges of this case, Joe admitted that he avoided paying income taxes on $1 million of income between 2004 and 2008. For Teresa’s part, when she faced the music, Teresa agreed to pay $200,000 in penalties to government with more penalties expected to follow later which will possibly double the penalties.

Failure to Disclose During Bankruptcy Is Fraud

In addition to not filing taxes, Joe and Teresa each pleaded guilty to conspiracy to commit mail and wire fraud and they pleaded guilty to three types of bankruptcy fraud. In 2009, the Guidice’s filed for Chapter 7 bankruptcy and were charged for failing to disclose accurate information about their businesses, Teresa’s salary for the reality television program, and rental properties the couple owned. Additionally, the couple failed to report a 2006 Ford F-250 pickup truck, a cement mixer, a bobcat trailer, a 1993 Ford Ranger, and 1997 corvette.

Had the lies about income been discovered during the bankruptcy hearing, the case could have been dismissed immediately. If the case had been dismissed at that time, the financial situation of the Guidice’s would have returned to where it was prior to bankruptcy proceedings. That means creditors would have still been hounding the family and assets would have been in danger of being taken and the family could have lost everything they had if bankruptcy had been off the table for them. Although the 15 month sentence Teresa received and the 41 month sentence Joe received probably feel harsh to them, they may feel different had they lost everything they had, which may have happened had they been caught lying during the original bankruptcy hearing.

There are actually several legal reasons a Chapter 7 bankruptcy case can be dismissed in addition to fraudulent activities: failure to complete credit counseling (if court mandated), lying on the official forms (Teresa did this), hiding property so it can’t be sold or liquidated (Teresa did this too), failure to file the correct forms or pay the filing fee, failure to appear at the meeting with creditors. In some situations, the case can be dismissed, and the people seeking bankruptcy relief can refile immediately or relatively soon, but fraud is not one of those situations.

Fines and Prison Time for Bankruptcy Fraud

Bankruptcy fraud, lying on forms and or hiding property so it doesn’t have to be forfeited to pay creditors constitutes bankruptcy fraud which Teresa is guilty of. Bankruptcy fraud is federal crime that can cause the guilty party to pay fines and do prison time. Theresa has been hit with a $10,000 fine and has thus far has been ordered to pay $200,000 in restitution with another restitution order possibly coming later. Judge Salas, who had this case said that Teresa failed to list at $75,000 in assets during her 2009 bankruptcy. The judge also seemed to question the lifestyle depicted on television. Teresa’s attorney stated that the furniture and wardrobe depicted on the television show were purchased by RHONJ and that what is seen on television is basically an orchestrated fiction.

Judge Esther Salas Sentenced The Guidice’s

The judge responsible for the Guidice’s case is Esther Salas, a woman who was not raised in the Real Housewives standard of living. Judge Esther Salas is the federal district judge for the United States District Court for the District of New Jersey and sits in Newark, New Jersey. Salas was confirmed as a federal district judge in June, 2011 by the United States Senate, making her a member of the Court for life. Prior to the federal judgeship, Salas had been a magistrate judge since 2006.

Salas, whose parents are Mexican and Cuban immigrants, was raised in New Jersey after her mother fled her abusive husband in California. When fire destroyed the family’s possessions when the judge was 11, she represented her mother at meetings with government officials to receive assistance and shelter for her mother and four siblings. This background, in contrast to the lifestyle seen on RHONJ has stuck with Salas and undoubtedly colors the lens she sees life with. She said to Teresa Guidice, “What you did in the financial disclosure really sticks in my craw. It’s what the court has a problem with. It shows blatant disrespect for the court. It’s as if you thumb your nose at this court. I honestly don’t believe you understand and respect the law.” She concluded, “Getting this financial information that I need to judge this case was like pulling teeth, it was the most difficult in my years as a judge and as a lawyer.”

This lecture to the defendant came as Teresa Guidice received a 15 month sentence rather than the maximum 21 month sentence. Her attorney had asked for probation with no prison time, but the judge believed that Teresa needed to learn a lesson about lying to the court and the consequences of spending beyond her means. Judge Salas said that she had considered probation until she read the government report about how difficult it was to receive an accurate financial report, and suggesting that during the process there may have been attempts to confuse the court with the documentation the defense team and the Guidice’s returned to the prosecution and the court. In any case, the process of understanding what assets the Guidice family has was far from straightforward and the judge was not pleased.

The judge also hoped that by passing down a sentence that included jail time for both Teresa and Joe, that the four children of the Guidice’s would be able to learn from the punishment their parents received. In an act showing compassion for the family, Joe will begin to serve his sentence of 41 months after his wife is released so that one parent will remain with the children, all girls ranging in age from five to 13 years.

Divorce: Now? Later? Never?

There have been rumors speculating that Teresa is furious with Joe after being handed down their prison sentences, and is considering a divorce. Even if the divorce is all speculation now, there is a good chance that the rumors could turn into a reality. Reports show that the divorce rate among couples where one spouse is incarcerated for one or more year(s) is about 80%, and for women is almost 100%. Many of the spouses, and secondary victims of the committed crimes (like the Guidice’s 4 daughters) often feel outcast, shame loneliness, and financial hardship. Teresa, who will serve her 15 month prison sentence first, is uncertain if Joe can handle raising their children by himself while she is locked up. Additionally, finances, and the fact it will be difficult to improve their finances while in prison have also been causing the couple stress, especially since a certain amount of the success that Teresa has had financially, selling books an hair care products is based on her public persona. That persona took a hit, and there certainly won’t be a public portion of it during the 15 months she’s in prison.

Although it seems that the divorce rumors about the Guidice family are false, it will be possible for a divorce to occur while one or the other of them is incarcerated. The Utah Divorce process to dissolve your marriage with someone in prison is almost exactly like it is under normal circumstances.

Whether Joe and Teresa have learned anything from this episode of real life, only time will tell. What those who have followed the case have learned is that when tax time comes, pay the taxes. If it is necessary to file for bankruptcy, don’t play fast and loose when listing assets. As stressful as taxes and bankruptcy can be, most would agree, they are not as stressful as doing time in prison.

Jennings & Medura, LLC offers full service family law and bankruptcy representation to the residents of Salt Lake City, UT. We are dedicated to providing efficient and quality legal services to help individuals protect their rights when facing issues of family law or bankruptcy matters.