Reality stars face fraud charges

NEWARK, N.J. - 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 the first season aired.

Teresa Giudice, 41, and her husband, Giuseppe, 43, of Montville, 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 says.

Prosecutors alleged 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, they said.

Giuseppe Giudice, known as "Joe," also failed to file tax returns for 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 Giudice's attorney, Henry Klingeman, said she would plead not guilty. Giuseppe Giudice's attorney did not return a message seeking comment.

Teresa Giudice also issued her own statement, saying it was a difficult day for her family, that she supported her husband, and that she hoped 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.

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 Giudice 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 pay stubs as part of the ruse, the indictment says. 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 Giudice's true income from Real Housewives, website sales, and personal appearances, the indictment says.

Teresa Giudice 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-forthcoming second year of the show, which is now in its fifth season.

Teresa Giudice 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 Giudice was criticized for, and defended, spending $60,000 on home furnishings after the filing.