A recent story has emerged that reminds us how tax fraud also applies to the rich and famous. On July 30, 2013, it was reported that the celebrity couple, Giuseppe “Joe” Giudice and his wife Teresa Giudice were indicted by a federal grand jury. The stars of the “Real Housewives of New Jersey” face an extensive 39 counts of various fraud including wire fraud, bank fraud, and making false statements on loan applications.
In addition, Joe Giudice was charged with failure to file tax returns for 2004 through 2008 during a period where he earned an alleged $1 million. As a Florida tax attorney, I will be following the case. Of note, among the multiple counts of fraud, the wilful failure to file a tax return is a criminal offense as well. It is always astonishing to me the number of famous figures that go years on end without filing a return. Having relatively high income makes them easy prey for the IRS, and the money at issue and positive press makes it worthwhile to pursue. I have attached a copy of the indictment for nerdy tax lawyer types that are interested to read it.
At the heart of the issue, the couple falsely reported W2’s to show salaries for securing loans, when in fact they were not receiving such income. It is not clear from the indictment, but it would seem if they claim the W2’s are correct, then they would owe tax on those amounts. Conversely, if the W2’s are not correct then they falsified the W2’s. It is also claimed that the couple owed some $3.2 million in mortgages and $13,000 to Neiman Marcus and Nordstrom, which has been feeding the reality TV craze. If convicted, the couple faces up to 30 years in prison.
As for the rest of the world, I am sure the case will be followed for other reasons. For example, Robyn Dawson comments:
Excuse me, Teresa? Hello, earth to Teresa….The indictment, 39 counts were against Joe and YOURSELF! Are you sure you’re not blonde under that brown hair of yours? You and Joe are going down and it’s time. Karma has finally got you for all of the ugly you’ve done to your family. I can’t believe you released a statement about Joe but failed to mention, you were also charged and booked into jail as well..You idiot..Now I’m sure you didn’t truly write those fake cook books. You aren’t that smart. You don’t even know how to say the word, woman in a proper sentence. LMAO
The Giudice couple released the following statement:
Today is a most difficult day for our family. I support Joe and, as a wonderful husband and father, I know he wants only the best for our lovely daughters and me. I am committed to my family and intend to maintain our lives in the best way possible, which includes continuing my career. As a result, I am hopeful that we will resolve this matter with the Government as quickly as possible
It will be interesting to follow the case. For the moment each has been released on $500,000 bond.
In addition, the case took an interesting turn on August 1, 2013, when it was reported that Joe Giudice is not a US citizen. As if the potential 50 year prison sentence wasn’t enough pressure for the celebrity couple, now there is a chance the Joe can be deported. The Giudice’s attorney said the following when asked why Joe has never obtained citizenship:
Joe has an Italian passport, not a U.S. passport. He came to his country when he was one year old. Because his family I suppose didn’t realize they should have done something. He came when he was one so I assume they thought he was a citizen. It would be a shame one way or another if he was deported since he’s been here since that young age. It’s unfortunate that he wasn’t naturalized.
The stars also continued to dominate the headlines on other reports on August 1, 2013. The latest is that Bravo has threatened to cancel the show altogether. Apparently, Bravo was already annoyed with the Giudice’s antics and this may push them over the edge. Continuing to run the show may go against Bravo’s tendency to only air happy situations rather than downward tailspins.
About the author: Mr. Donnini is a multi-state sales and use tax attorney and an associate in the law firm Moffa, Gainor, & Sutton, PA, based in Fort Lauderdale, Florida. Mr. Donnini’s primary practice is multi-state sales and use tax as well as state corporate income tax controversy. Mr. Donnini also practices in the areas of federal tax controversy, federal estate planning, Florida probate, and all other state taxes including communication service tax, cigarette & tobacco tax, motor fuel tax, and Native American taxation. Mr. Donnini is currently pursuing his LL.M. in Taxation at NYU. If you have any questions please do not hesitate to contact him via email JerryDonnini@Floridasalestax.com or phone at 954-642-9390.