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Teresa And Joe Giudice Could Be Totally Screwed

The Real Housewives of New Jersey couple has been indicted on 39 counts of fraud and tax charges. Here's a breakdown of what the government said they did — and why they could be going to jail for a very long time. (Or, as Teresa would put it, they could "go away" for a long time.)

Julio Cortez / AP

Joe Giudice, 43, left, and his wife, Teresa Giudice, 41, after a court appearance Tuesday in Newark, N.J.

Just when things were looking up for Teresa.

Sunday night's episode of Bravo's The Real Housewives of New Jersey showed hero/villain Teresa Giudice making up with her brother, Joe, and his wife, Melissa, with whom she'd been feuding for years, in an emotional catharsis.

Her triumph was short-lived. Monday morning brought the news that Teresa and her husband, also named Joe, were being indicted in federal court on 39 counts of fraud and tax charges. In the indictment — fully broken down below — government investigators claim that over a period of years, Teresa and Joe allegedly lied repeatedly on bank loan applications, amassing millions of dollars using fraudulent documents. The combination of charges could result in more than 50 years of prison time and heavy fines if the Giudices are found guilty. On top of everything else, because Joe is an Italian citizen, his legal mess carries the additional threat of deportation.

In the press release issued Monday by the U.S. Attorney's office, Special Agent in Charge Shantelle P. Kitchen of the Newark Field Office of IRS-Criminal Investigation, said, "The reality is that this type of criminal conduct will not go undetected and individuals who engage in this type of financial fraud should know they will be held accountable."

Teresa's attorney, Henry Klingeman, told BuzzFeed that Teresa will be pleading not guilty at the Giudices' arraignment on Aug. 14. "The judicial process that begins now with an indictment is a search for the truth," he wrote in a statement. "As it moves forward, we look forward to vindicating her."

Joe Giudice's attorney was not available to comment. And Bravo would not comment on the charges.

It's not the first time the Giudices, who have four daughters who also star on Real Housewives of New Jersey, have had financial and legal trouble. They filed for bankruptcy in 2009 — which factors into the indictment, as you will see below — with a debt totaling nearly $11 million. And Joe Giudice is currently awaiting trial on criminal charges that he posed as his brother in 2010 in order to get a driver's license. (His license had been suspended after a DUI.) The soap operatics of the Giudices' problems have been closely followed by both Bravo's cameras and the gossip press.

But this week's developments are beyond anything the couple has faced before.

The charges in the indictment are confusing. Let's look into them.

1. Mail Fraud and Wire Fraud

The indictment states that between 2001 and 2008, using the U.S. mail system, private carriers (something like FedEx or UPS, in other words), and wire communications, the Giudices defrauded seven different banks and mortgage lenders. It was a "conspiracy," the charges state, in which the Giudices "submitted false and fraudulent mortgage and other loan applications and supporting documents" in order to get the loans. The false documents that they "created, or caused to be created," were tax returns, paystubs, and W-2s that gave false salaries and income. In the first instance in September 2001, the Giudices applied for a loan from the lender HomeComings and submitted a W-2 and paystub to show that Teresa was an executive assistant making $3,750 a month. In fact, she was unemployed, the indictment states, but the couple succeeded in getting a loan for around $121,500. This pattern of loan applications based on falsified materials continued through 2008 for loans totaling more than $4.5 million and two home equity lines of credit withdrawals for more than $421,000. These charges carry a maximum of 20 years in prison along with fines.

2. Bank Fraud

These are five different charges for defrauding five different banks by submitting applications with false tax returns, false W-2s, or both. The two biggest loans were a construction loan for $1.7 million from Sterling in February/March 2008 and a mortgage loan for $1.72 million from Community Bank of Bergen County in July to September 2008. (For what it's worth, The Real Housewives of New Jersey premiered in April 2009, and one of the plots of the first season was Teresa's renovation of the massive mansion where they still live.)

3. Loan Application Fraud

These counts are charging the Giudices under another federal statute, for allegedly making false statements in those bank loan applications. Along with the bank fraud charges, the loan application fraud charges have a maximum penalty of 30 years in prison.

4. Bankruptcy Fraud

When you file for bankruptcy and are under bankruptcy protection, you have to be honest about your assets and income in order to be discharged of your debts. "A debtor," the indictment states, "is required by law to disclose his or her financial circumstances." The Giudices filed for Chapter 7 bankruptcy in October 2009 and signed documents about their finances "under the penalty of perjury." As the bankruptcy has proceeded through the courts, both Joe (called "Giuseppe" in the indictment) and Teresa have testified a number of times under oath about their assets and liabilities. These charges break down where Joe and Teresa allegedly were not honest and transparent with their finances.

5. Bankruptcy Fraud — Concealment

These are six different counts based on six different income generators that the Giudices allegedly concealed under oath while in bankruptcy. One is TG Fabulicious, Teresa's merchandise website, which she opened toward the end of Season 1 of Real Housewives. Another is a rental property Joe and Teresa owned in Lincoln Park, New Jersey, for which they received income. Most interestingly to Housewives fans, after Season 1 aired, the indictment states that their income from the show increased to $110,000 for Season 2.

6. Bankruptcy Fraud — False Oaths

These six counts spell out the specific times Joe and Teresa allegedly lied under oath (for example, the charges allege that the rental property had not been rented). Another time, in June 2011, the indictment states that Teresa said her only income was from Real Housewives and she "did not own any business interests or companies."

7. Bankruptcy Fraud — False Declarations

These 10 counts are based on 10 different times during the bankruptcy proceedings when allegedly the Giudices knowingly filed false documents in which they were concealing income.

8. Failure to Make Tax Returns

These counts are all against Joe, and claim that he didn't file tax returns from 2004 through 2008. As an interesting side note, according to the indictment, reportedly his income wildly fluctuated in those years. In 2004, his gross income was $243,919, and was more the next year; in 2006, however, his gross income was $26,194. But the indictment claims that Joe failed to file returns regardless of the income amount.

On Tuesday, Joe and Teresa Giudice appeared for a hearing in federal court. They were each released on $500,000 bonds. They will be arraigned on Aug. 14.

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