One of the stars of the television show, The Real Housewives of New Jersey, was charged with bankruptcy fraud in federal court this week. In addition to being indicted for bankruptcy fraud, the couple is also charged with fraudulently obtaining loans based upon false loan applications and failing to file income tax returns.
Teresa Giudice and her husband, Joe, filed for Chapter 7 bankruptcy relief in the fall of 2009, several months after becoming cast members of a television show designed to flaunt the wealth and fabulous lives of the “housewives.” Soon after the bankruptcy filing it became apparent that the Chapter 7 Trustee and the U.S. Trustee assigned to the case believed the Giudices had failed to disclose all of their assets and income in their Chapter 7 bankruptcy petition as required by law. In addition, one of the Giudices’ creditors filed a claim that he had been defrauded by Joe Giudice and that his debt should therefore be nondischargeable.
As the Chapter 7 bankruptcy case progressed, it became apparent that significant amounts of income and assets had not been disclosed by the Giudices and that Joe Giudice, at least, had engaged in significant acts of fraud against his creditors. Most likely, a referral of the issue of bankruptcy fraud from the U.S. Trustee to the U.S. Department of Justice resulted in the indictments we have seen this week. Once the Justice Department began investigating the bankruptcy fraud, it appears the Giudices’ financial history was extensively reviewed and this resulted in additional federal charges for fraudulent loan applications and failure to file required tax returns.
This case, while almost cartoonish in nature, is the poster child for what not to do in your bankruptcy filing. We may never know if the debtors in this case were simply supremely arrogant in believing no one would discover the significant omissions in their bankruptcy schedules or if they received bad legal advice. But it is clear the debtors failed to follow the golden rules in filing for Chapter 7 relief – tell the truth and do not leave anything out! If you are considering a filing for bankruptcy relief but are concerned about what the rules require and how they may affect you, please contact one of our locations nearest you in Alabama, Mississippi or Tennessee for a free, confidential consultation with one of our experienced, licensed attorneys.