Joe and Teresa Giudice’s Burst Bubble

A 33 page indictment against Joe and Teresa Giudice enumerates the 39 counts of fraud, tax evasion and misrepresentation of certain facts to the Bankruptcy Court.  It’s a scary document, for sure, and, if any or all of the charges are true, their future is looking very bleak.   Reading through the indictment, it appears that the Giudices are ignorant, arrogant or a horrible combination of both.

When we lived in Florida between 2005 and 2007, houses were being built at break neck speed and mortgages were handed out to just about anybody with a pulse.  Billboards tempted even the worst risks with offers of guaranteed loans without proof of income, credit checks and with nothing down.  All the potential home buyer had to do was apply and the home was theirs, sort of.   Many of those who grabbed up those loans soon realized that getting them and paying them were two very different things.   The higher the risk, the higher the rate of interest and those same people who thought that a bank or lender wouldn’t give them a mortgage they couldn’t handle soon found out differently.    As the housing bubble began to deflate, so did home values and people found that their new homes not only weren’t building equity but were actually becoming worth less than they’d mortgaged them for.  Many simply walked away, leaving behind abandoned homes and unpaid loans all over the country.

Between 1998 and 2006, the price of a home in New Jersey, adjusted for inflation, appreciated by more than 80%, making the market a perfect breeding ground for predator lenders and fraudulent buyers.  This is not to say that all mortgages were gotten or given by nefarious means.   In order to give the appearance that loans were still following the “rules”, so to speak, banks still required anyone who had a real source of income and above average credit rating to prove it and, oh, by the way, ensure that they had the traditional 20% to put down on the home.

All of that came to a grinding halt on September 29, 2008 when the bubble burst – no it didn’t just burst, it exploded – and we watched as the Dow lost nearly 700 points in one day.  Soon after, applications for foreclosures doubled, then tripled, as the banks and  those high risk home buyers came face to face with the awful, albeit predictable reality that the shit had finally hit the fan.

Smack dab in the middle of those bad mortgages sat the Giudices, who provided banks and other lenders with information that appears not only to be untrue but unbelievable.   Jobs and incomes were reported that just couldn’t be – unless Teresa had several clones who never slept.  She claimed to be an administrative assistant and the sole owner of a stucco company in overlapping years, among other things.  The indictment charges that they provided phony W-2s to back up their claims, and, apparently, the banks took them and ran with them, no questions asked.  One of the banks was the now defunct Wachovia, whose lending practices came under fire and eventually sunk their ship, leaving them with no option but to be taken over by Wells Fargo.

As the housing market continued to fall, the Giudices asked the Bankruptcy Court for forgiveness of much of their debt, with creditors demanding something, anything, in way of recompense.   They should have played by the rules and saved themselves the boatload of trouble they’re now facing.  People got caught up in the housing frenzy and made some mistakes – we get it.    Instead, the feds further charge that they chose to make matters even worse, by trying to pull the wool over the Court’s eyes.  Income they had or were soon to have was hidden from the Trustee.  They swore that they had provided the Court with everything they had, but that just doesn’t ring true.  It didn’t take the feds long to figure out – maybe they watch Bravo – that there was plenty of income coming in from Teresa’ s Fabulicious brand, rental properties and other businesses, all of which both Joe and Teresa chose to keep quiet about.

To compound their idiocy, the Giudices, according to the indictment, failed to file income tax returns for the years between 2004 and 2008.   That can’t be an oversight.  You just don’t forget to file your taxes.  It has to be a deliberate and intentional act to not file taxes for 4 years.   I don’t know what they were thinking or if they thinking at all, but they certainly didn’t help themselves with this one.  Unless you’re a United States Congressman or the Secretary of the Treasury, regular people go to prison for this kind of thing.  Just ask Wesley Snipes.

I could almost understand their financial situation, as I explained above regarding the housing bubble, but what I can’t understand is their choice to obfuscate.   You need look no further than the matter involving Martha Stewart.  The feds couldn’t prove that she was engaged in insider trading but they sure as hell hated when she lied to them.   She served a 5 month sentence plus 2 years of supervised release, along with fines.  The Giudices are facing much more in terms of sentencing, due in large part to their continued failure to just come clean.  I guess they haven’t figured out, that in most of these types of things, it’s never the act, but the attempt to cover it up that gets you in the most trouble.  I don’t think that any judge is going to sentence both or either of them to the kind of punishment that the sentencing guidelines allow, but someone’s going to prison.  They asked the Bankruptcy Court for forgiveness and then handled the thing all wrong.  For their sake – well, for the sake of their girls –  I hope they start playing by the damn rules and listening to someone besides those foolish voices in their foolish heads.  I guess we’ll just have to wait and see.

Link to the indictment (PDF):,%20Giuseppe%20and%20Teresa%20Indictment.pdf


I added these photos just so we’re clear as to how Frank Giudice feels about the whole thing.

Joe Giudice's father, Frank, gives photographers the finger as the family enters through the garage.

Joe Giudice's father Frank showed onlookers what he really thought of them.

Norman Y. Lono for New York Daily News

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26 Responses to Joe and Teresa Giudice’s Burst Bubble

  1. Nancy says:

    Please do not come at me Pro or Non Teresa Fans..
    Teresa is not the brightest light bulb in the socket; to even fake a W2, she would need photoshop and computer/ technical skills. I do believe it was Joe and not Teresa who did the subsequent doing to get the loans because Joe controlled the finances pre- RHNJ
    I feel whoever approved; by not checking the fake Giudice companies should also face charges. A simple check would have shown the business(es) did not exist. I am not in anyway excusing what The Giudices did, I am merely stating the companies who lend out these “mortgages” should be held accountable because help create situations like this. They do exactly what they do now: Wipe their hands clean and claim to be the victim. ( I will explain my experience in a minute). Not to mention; It is their job to do the basics such as: verify Employment, W2’s, actual salaries, check the Authenticity of filed paperwork of or on companies etc. – so this very thing does not happen. What the Giudices did would NOT have required a master set of skills to detect.

    I remember when I first got married in 2005; my husband was 25 and I was 22. We lived in a small apartment – but fabulous neighborhood 🙂 and could not wait to start our lives together as a married couple; living the “American Dream”. The “American Dream” we knew then was: living off of credit cards, saying screw it if its just an overdraft — lets get overdraft protection for a monthly fee instead of paying for each transaction. Yes, we were excited to be “pre” qualified for a loan — so we started looking for a house. How naive we were.
    My husband had better credit than me, so that made me feel I was not contributing equally, of course did not stop us from looking at houses based on that ” Pre” Qualified loan. No, back then I didn’t get the “Pre” part.
    I remember we were sitting with this loan officer in a raunchy office wondering how the hell this place gets ahold money to get You money to buy property, but can’t take of their own property. Later I learned he was a small fish in this game. The big fish has corporate airplanes etc. Anyhow, he asked both of us a series of questions. The norm — right? One of the series was about my employment: how long I was at my current job etc., I told him; “two years”. Next thing you know he smacks his hand on the table and says, “By law I can not recommend you do this but as a “friend”, if you could bring a W2 showing double your salary and at least 4 plus years length of employment at this place – we could get you a much lower rate”
    My husband and I looked at him and asked; “But.. that is illegal.. right??”
    He mumbled; “people do it all the time” I then asked; “What would happen if they checked my REAL W2?” He just shook his head no and mumbled; “They won’t, don’t worry they never do” I remember walking out of there thinking there is no way in hell I would do such a thing, this man is a fraud. I also wondered how everyone else our age was getting by having more than we did — thankfully not putting much thought because needless to say; we were not feeling the pressure to keep up with whoever from other people; just ourselves.
    Our lease was ending so instead of making our landlord rich, we moved out of our fabulous neighborhood and rented a bigger apartment in a “middle” class community. I quote “middle” because people assume the worst. I must say; we ended up having fun there and meeting great people that are our friends to this day.
    We saved up money, build our credit up and paid off our credit cards and were careful how we spent our money. We still are careful, you have to be.
    We did buy our first home in 2011. Yes, our home was a foreclosure, however, the foreclosure was due to fraud. A company who happened to be connected to the loan officer I just mentioned was connected. No, we did not feel guilty for buying the foreclosure because a family did not live here and the company had intentions of selling the property for triple the price – yep, you guessed it: The Fraud Repair Way
    It was horrible. There was no indoor plumbing or pipes, however it had the fixtures etc. I remember thinking how the hell are we going to do this. It turned out to be the best thing we did. My husband’s family is in the construction business so that does help. To this day we still are trying to make it our dream home at a fraction of the actual cost. You have to be able to sacrifice living in a half done home, but it is so worth it. We received our occupancy permit last year after the major construction was completed. We still have a way to go but we would not trade it in. Sure, we could have purchased a home that needed no work, but we are picky people. 🙂
    My advice to young people that we got from our financial advisor:
    • Always: expect, prepare and anticipate the worst

    • Each paycheck; try to put at least 10% away in a savings account not connected to your debit card so you can build it up and prepare for the worst.

    • Do not spend your change! Pretend like it does not exist. Save all change and do not use change. yes, if the total is $11.04 ? Get the .96 in change. Save your change and cash it in every three months. Cashing in does not mean spending it. Deposit ( yes, you have to roll it!) in a savings not connected to your debit card. Believe me, you will be surprised how much you have. We still do this.

    • Pay your credit cards off before saving; you are not saving by paying the companies the interest rates. This may not make sense but think of it this way:
    You never really want to use a CC unless you are intentionally building up your credit or really need to use it. You need your credit – having money in a saving account is helpful; but it won’t help your credit. If you are buying a home this would be your best option. After you pay your CC’s off, you can have your credit limit back which most likely will be more than you have in savings. Remember, you are preparing for the worst. At least if one of your CC is paid off — you will get your credit limit back which most likely will be more than what you could have in savings now. This does not mean to use with intention of making monthly payments. Use the credit card of you have cash and pay it with in the time frame so no interest is due. .

    • Instead of hurrying to furnish your entire home — furnish one room at a time; even if it is just your bedroom.

    • Brew your own Starbucks coffee at home. If you buy one coffee everyday at: $2.50 that equals: $17.50 a week: $17.50 times four weeks, then times that by twelve months: you do the rest of the math. Make sure you buy a good coffee brewer, you get what you pay for. A good coffee maker can cost any where from $50 – $100 , however, you spend that a month on coffee!

    • Use coupons

    • Do not let anyone pressure you or feel that you have to “Keep up” with anyone. If ANYONE in your life is doing this; they are not your friends!

    I know it sounds impossible — it does take restraint; especially if you are an impulsive shopper like myself.
    We had no business spending the money we did (not have) living in our first apartment.

    • Nancy, I don’t think your story is unique. Lots of folks lived the high life during the economic boom, living off credit cards, using their homes like ATMs by taking equity loans and basically living as if tomorrow would never come. The difference between your experience and others is that you and your husband recognized that if it looks to good to be true, it most likely is.
      IMHO, Joe, and probably Teresa, would have seen an offer to circumvent loan standards and practices as a golden opportunity. If you’re already predisposed to playing fast and loose with the truth and with how things are supposed to be done, then, what the hell, just take the money and run.
      They got those loans by providing fraudulent documents, then asked the Bankruptcy Court to forgive those very same loans, as well as whatever they owed other creditors. No court is going to help you get out of debt if the debt was based on criminal behavior to begin with. Then they dug their own hole a little deeper – perhaps because they knew that they’d deceived lenders – by lying to the Bankruptcy Court about their assets and liabilities. You’re right, you don’t have to be a forensic accountant to figure this one out.
      As for the lenders, a number of them, including some well-known banks, no longer exist as they began drowning in debt too, leaving the rest of us holding the bag, so to speak. Some smaller lenders, similar to the type you mentioned, have faced criminal charges, while the big banks were bailed out by the government. Go figure – too big to fail, too big to jail, I guess.
      The Giudices, along with a whole lot of other people, would have been smart to listen to some sort of financial adviser years ago and might have avoided all of this.
      Yours is a cautionary tale and it’s worth listening to.
      Thank you for sharing your experience. It sounds like you’re doing fine.

      • Nancy says:

        I know my situation was not unique. However, having a loan officer suggest that I edit my w2 and then say, “they don’t check” as well as; “they never check” should warrant the banks to hold responsibility as well in all cases.

        I am not excusing what the Giudices did.

        I am trying to understand how Joe Giuduce is is not a legal citizen. Would that mean his parents and siblings are not as well.

    • Becky Grey says:

      I am very much older and I will use what you said and pass it on.

  2. Trehuggers will forever continue to place blame on anyone but Teresa.
    Juicy explained to Tre, ‘We’ve gotta prove that you have a job. We’ve gotta supply fake documents so we can get a loan and take the money so you can shop and show off.’
    Yet, Trehuggers think Tre was too dumb to comprehend and then do this? LOL

    • I can’t speak for the huggers – I try to avoid hugging anyone I don’t know. Whether Teresa is dumb or not isn’t going to impress the court.

  3. Stacey says:

    Thank you Empress for the clear and concise blog. Also thank you for teaching me a new word: Obfuscate. I looked at that word, wondered what it meant and clearly heard my dad in my head saying go get the websters! So thank you for bringing back that childhood memory LOL. And Melissa’s Forehead, I am so glad you were sitting at the kitchen table with Joe and Tre when they had that discussion so you could share it with us!….I am not what you call a Trehugger, I am not on any teams and think the whole lot of them are ridiculous. I believe since Joe and Tre are an “old school” couple that Joe will do his best to take all the blame and keep Tre at home with the girls HOWEVER the federal government does not care about the children, they care about justice (ok, only sometimes) and they have the needed documentation to send them both up the river without a paddle. I was totally blown away this morning to find out Joe is not a citizen of the USA! He may be deported after all is said and done. And in the wise words of Baretta: Don’t do the crime if you can’t do the time!

    • Hey Stacey, I’ve been thinking about how Joe and Tre are going to handle this for the sake of their daughters and I have to agree with you. I can see Joe taking the bigger hit on this and, if the Feds are willing to work out a deal, take the fall and allow Teresa to stay with their kids, maybe with some sort of supervised probation or house arrest. That’s a very big IF, though. We’ll just have to see how it plays out.
      BTW – your Dad advice sounds a lot like my Mom’s. 😀

  4. not THAT Jill says:

    Empress-that’s for the straight shooting-while some people are turning this into an episode of RHONJ-you just laid out the facts. There is no good way to look at this-they cheated and lied and they got caught. That’s the facts-my feelings flip flop from too bad so sad to OMG their poor kids. While the majority of us our breaking our assess to make ends meet some people think they are too good for that sort of thing-it’s infuriating and shameful.
    Human nature shocks and saddens me-while I know it’s vindication for the people who knew this day would come-I just don’t feel like being happy that 4 little girls may be saying good bye to their mom and dad for a while. Call me naive but that’s how I feel.

    • not THAT Jill says:

      (THANKS-for the straight shooting)…. One day I will shoot my iPad!!!!!

    • Hey Jill, there’s worse things to be called than naive. It’s really heartbreaking how those girls will, in some ways, pay for the sins of their parents. Gia’s about junior high school age (I think) and we know all too well how bad kids that age can be to one another. I don’t have any idea how that girl is going to handle such a public humiliation. It’s almost ironic that we, the viewers, are showing concern for those girls when that’s really something that their parents should have considered before they walked this road. No amount of Birkins or Louboutins or mcmansions are worth this.
      This particular reality show has always been a little too real because of the family aspect and now it’s just a tragedy.

  5. Mr. Benji's Butler says:

    I’m sure that tha Joe & Teresa got caught up in the “everybody’s doing it” mentality. I knew prices were too high back then. I, Hubs & Mr. Tigre lived in a fairly nice rental. We paid $850.00/mo. In rent. Along came some Miami developers. They sold the city commission a bill of goods saying they wanted to buy the building to provide “affordable” housing. There were about 135 units in the tower. Many of the people had lived there for nearly 20 years. The commission went along and approved the sale. We were never served with notice of intent to convert. (to condo). There was a meeting called for all tenants to attend. There were representatives from BoA there to start the mortgage process. Just sign on the dotted line…. The asking price for the unit we were in? $333,000.00. As is, where is. (We might have considered paying $135,000.00). We were the first to walk out of that meeting. The developers had by-passed so many state and local rules and regulations and the state received so many letters from the tenants (there were a lot of retirees in the building) that the state stepped in and didn’t approve the condo conversion. The developers were stuck with a rental building, went bankrupt and the building was in receivership for over 4 years. I’ve often wondered what happened to the BoA employees that were involved in that deal.

    • Mr. Benji’s Butler, First, I have to tell you just how good it is to hear from you and I hope you, the hubs and Mr. Benji are doing well.
      As for the housing debacle, I think the Giudices did what 1,000s of others did and bit off way more than they could chew. Of course, they took some extra steps and exacerbated matters by providing some doctored documents, maybe thinking that no one would ever be the wiser.
      I know all too well how banks threw money at people during the boom for overinflated properties – in your case it was BoA, in ours it was Wachovia. Luckily, we were smart enough to see the writing on the wall.
      I wouldn’t lose much sleep over those BoA employees, though. With any luck, they’re working for minimum wage at Mickey D’s.

      • Mr. Benji's Butler says:

        Hi empress,
        Hubs, Mr. Benji and I are all doing well. We found our perfect retirement cottage and have been busy making it our own. Hubs hasn’t retired yet, but all of the preparations should be completed when he does. Mr. Benji has been a great addition to our family and is filling the void Mr. Tigre left behind. I was able to host a family reunion. All my cousins flew in from around the world and even my 95 year old Aunt attended. I think she will out live all of us. She still walks like a 30 yr. old. A good time was had by all.
        I hope you and yours are happy and healthy.

  6. melthehound says:

    Empress, I always love reading your blogs and particularly, the non TV show (recap) blogs. I wondered if you would take this one on as a topic. I’m not coming in as a Teresa fan or otherwise, I’m coming in as, I am not the court nor the government.

    The pictures are hilarious and I would be doing the same thing except, I doubt I would keep my pants up (TMI?) 😆

    • mth, You know that I’ve avoided the HWs in general and NJ in particular because of the family conflicts – real and/or manufactured – they engage in. I’m not taking sides in this one – I don’t think I ever have, with the exception of Jacqueline, who’s a whole different animal.
      The idea that reality shows are some sort of social experiment, showing the good, the bad and the ugly sides of certain segments of our society, really reached a new level with this indictment. I’m so cynical about Bravo that I really believe that their execs are looking at how this will boost ratings. This is the ultimate trainwreck with real injuries and victims, not the least of which are 4 little girls.
      BTW, I have no problem with how you wear your pants, or don’t wear them – just don’t share any photos, okay? 😉

      • melthehound says:

        I agree about the levels and I don’t doubt you about Bravo using this to their bottom line advantage. With the national attention this is getting, it’s bound to increase viewership. If for no other reason, to find out who the hell the Giudices are. Look at what the mention of a hate blog did for IHJZ.

        As for my pants, Promise. No pictures 😀

  7. princesspindy says:

    I was waiting for this….as I was swimming yesterday I thought of you and I said to myself, “Empress is a lawyer!!” Great job of explaining this whole mess and you made points that I thought of, so of course, I think you’re brilliant, lol!!

    • Hey pp, So, I guess that makes both of us brilliant! I can live with that logic. I’m glad you enjoyed it and I hope princess beanie boo is doing well. I have a question – did she go to comic-con this year and did she happen to see anyone from “Dexter”? If so, color me very jealous. 😉

      • princesspindy says:

        Of course we are brilliant, but you already knew that!!! Yes, she did go to Comic Con and had a blast!! She also was able to go to Anime Expo which was about 2 weeks before in Los Angeles…. I got a Dexter ID holder that you put around your neck that says “I ❤ Dexter” on it. But that is not the panel that they camped overnight to see, lol! She saw the Sherlock and XFiles panels. I like Sherlock, I might not have been able to handle her going to a Dexter panel instead of ME!! She also was put on a lot of websites for her Batgirl costume and she is in a huge group shot in Entertainment Weekly of DC characters. We troll the internet the weeks after looking for pictures, lol!

  8. D says:

    I am steaming inside, when I get my thoughts together on this issue that has impacted family/friends/neighbors on a personal level very/almost similar to Nancy.

    When I first heard of the occupy movement my cousins husband was relocated/? I do not have the details. Her husband was a bank examiner that traveled from banks to banks. Enter the occupy NYC movement I knew that he was working in NYC but didn’t realize that he was no longer an bank examiner but an employee of Chase. I asked her if her husband was safe, she no longer speaks to me, he told her I am a nut case, there was no occupation of Zicolatti Park sp? by the non occupy movement

  9. Kaereste says:

    Interesting blog Empress. My own personal experience occurred many years ago when my husband & I tried to buy our first house. Our real estate agent (a close friend of my husband’s employer), actually handed us a photo of a boat and encouraged us to claim the boat belonged to us! He even told us he would “find” us a registration for the boat. we werea shoe-in for a loan!
    We were dumb kids then, like 21 yrs old, but even so we declined. After that I wondered how many real estate & mortgage professionals play fast with the documents just to get their commission or make their quota.
    That said, the Guidices are in a league of their own.

  10. Back during the last real estate “you to can own your own home” free for all, I remember a man I served with on jury duty. When asked what he did for work replied, “I was a house inspector for X Bank but I quit”. When asked why, he said that it didn’t feel right about being told by the bank what the appraisal of any given house was “going to be” before he even stepped foot in the house – just because that was the amount the mortgage loan was good for! He was afraid he was going to be in trouble for doing something he felt was both immoral and illegal.

    It is hard for me to understand how anyone would even consider taking out an unrealistically large mortgage and/or construction loans – I prefer to be able to buy groceries, take vacations, have money for the kids’ college educations and a nice big retirement portfolio!

    There was/still is a lot of blame to go around for the mortgage loan fiasco that helped bring down the house of Guidice. When information became available on their income, the amount they claimed to receive from “family” monthly was very questionable at best and led many to assumptions as to exactly which family they were receiving this largesse from! They are where they find themselves today for many reasons, the justice system will sort it all out. At this time, my thoughts and prayers are for four darling little girls that we have watched grow up on Bravo TV, nothing more.

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