Over the last couple of years, there have been two high-profile examples of reality television stars failing to fully reveal all of their property and possessions during bankruptcy proceedings.
These two examples provide insight into the effects of untruthfulness – where the intersection of facts and bankruptcy proceedings collide with fame and fortune.
Lying under oath has consequences for all – the rich and famous, the middle class and for the down and out. Anyone lying during their bankruptcy proceedings will get caught, and can pay a high price. Jail time is the scary reality!
Joe and Teresa Giudice are our first case study. Their lives were detailed in a Bravo reality show called “Real Housewives of New Jersey,” which premiered in May 2009. That high profile and visible television presence spelled doom for them.
The Giudices filed a chapter 7 bankruptcy in October 2009, claiming that their income was not sufficient to pay their debts. That may or may not have been true at the time. But, their disclosure filed under oath to the New Jersey bankruptcy court in 2009 was definitely not true. Much of that falsehood was created by ‘leaving off’ personal property. Like ATVs, go-karts, a rental property (see page 17 on this linked U.S Department of Justice indictment), a cement mixer (who hides a cement mixer?).
Ultimately, in July of 2013, Joe and Teresa Giudice were federally indicted on 39 counts, including lying on their bankruptcy disclosures, and other counts stretching back over ten years, for fraudulently obtaining secured loans against properties, and tax evasion. In some cases, they had created false documents, like pay stubs for jobs that didn’t exist and tax returns that were never filed and were largely fiction. In other cases, they moved income around to shell companies.
The evidence was overwhelming. On October 14, 2014, after Teresa had previously plead guilty to four counts and Joe to five counts of bankruptcy and mail fraud, Teresa was sentenced to fifteen months in federal prison, with her husband Joe facing forty-one months.
Stay tuned for part two, with Abigale Lee Miller of Dance Moms.