A former reality TV star looks “amazing” in prison, according to her teenage daughter. The 14-year-old girl added that jail officials had helped her mother put on makeup, and that the family’s first visit together was “fun.”
“Real Housewives Of New Jersey” cast member Teresa Giudice began serving a 15-month federal prison sentence for bankruptcy fraud. Upon her release from the Federal Correctional Institution in Danbury, Connecticut, her husband will begin serving a 41-month sentence for bankruptcy fraud and tax evasion. As a non-citizen, he also faces possible deportation proceedings.
According to court records, the couple filed Chapter 7 Bankruptcy in 2009 but failed to disclose their income from the reality TV show. The matter was subsequently referred to a grand jury for bankruptcy fraud prosecution.
Bankruptcy Fraud
It is almost impossible to conceal fraud from bankruptcy trustees, as they have easy access to tax returns, W-2s, W-4s, and most other financial documents. Moreover, the trustees are normally attorneys, or at least legal and/or accounting professionals, so they are not easily fooled. Prior to the hearing required in most bankruptcy cases, commonly known as a 341 meeting, the trustees carefully review both the petition and schedules, looking for red flags. They may also review other documents, looking for inconsistencies. Other times, debtors may give vague or evasive answers at the 341 hearing.
If the trustees suspect fraud, they may open a Rule 2004 investigation. This rule gives trustees sweeping powers to interview witnesses and subpoena documents in order to gather enough information to take the matter to the next level.
- Adversary Proceeding: This is the normal remedy if the debtors are trying to conceal an asset, like a bank account, rental property or a boat, that rightfully belongs to the bankruptcy estate. As part of a motion for turnover, the trustee can request a temporary restraining order to prevent the debtors from selling or otherwise disposing of the contested asset.
- Criminal Prosecution: This is typically the next step in the process, especially in a case of egregious fraud. Specific offenses include filing a false petition, making a false oath, and filing a false claim. These three are normally present in every bankruptcy fraud matter. Other offenses include bribery, embezzlement, and knowingly concealing assets.
The maximum punishment for these crimes is typically five years in prison, plus substantial fines and court-imposed restrictions.
Bankruptcy fraud is a very serious crime. For a free consultation with an experienced Phoenix bankruptcy attorney who can help you clear your debts and avoid scrutiny, contact our office today. Bankruptcy can stop repossession, foreclosure, and creditor harassment.