Did Teresa Giudice Know That They Were in Financial Distress?; Monica Chacon is a Title Examiner Who Assisted the Feds in Investigating the Giudice’s Real Estate Transactions
RHONJ season 1 had footage of Joe and Teresa Giudice eating dinner at an outdoor restaurant; in voice-over, Joe says: “I get pissed at how much money Teresa spends but what ya gonna do about it? Happy wife, happy life.”
RHONJ season 2 was taping when the creditors of the Laurita’s company, Signature Apparel, pushed the company into bankruptcy protection in September 2009 (the company had only been in operation since 2005) and when the Giudices filed for bankruptcy on October 29, 2009. So the Lauritas were having financial issues at the same time as the Giudices; however, only the Giudice’s issues made headlines and became a storyline on the show.
Just before their 10th wedding anniversary on October 23, 2009 (which was taped for season 2 episode 12), and before they filed for bankruptcy on October 29, 2009, the Giudices had dinner at the Laurita’s home (photos above). After dinner, Juicy and Chris went off to talk, and this is when Juicy mentioned that Teresa wanted diamonds for her anniversary present and told Chris, “It ain’t like the money’s flowin’ like it used to.”
“Monday’s episode of The Real Housewives of New Jersey found them celebrating their 10th anniversary in lavish style. From a helicopter ride over Manhattan, to a private dinner in a ritzy hotel suite, to a massive, yellow diamond ring he gave her, Joe seemingly spared no expense to please his wife, who insisted on a sizable gift. The consequences for not delivering? She’d withhold sex for a month.” – People Magazine, July 27, 2010
In the next episode of season 2 (episode 13, which would have been taped shortly before the Giudices filed for bankruptcy), Teresa was shown on a mad mission to find Chanel during the cast trip to Italy, while Joe was portrayed as being concerned about their finances. In other words, Teresa appeared to be oblivious to the fact that they were having financial difficulties.
“Knowing what we know now, it’s painful watching Joe’s face during all Teresa’s spending. It’s obvious he is well aware of their money (or lack of) situation. But as he said – ‘Happy wife, happy life.’ He doesn’t seem to be very happy lately.” – fam, August 10, 2010, PopWatch
During the real estate bubble years, from about 2000 – 2007, lending standards were loosened and banks were encouraging applicants to be less than truthful, even offering financial incentives to homebuyers (who wouldn’t have qualified under the old lending standards) by financing 110% of the purchase price so that buyers would get cash back at settlement. Additionally, lenders were offering a variety of adjustable rate sub-prime mortgages, approving no-doc loans and stated-income loans, and telling appraisers to value properties for the contract price regardless of the comps. It was a free for all, and the average person wouldn’t have understood that it is a federal offense to lie on a mortgage loan application and it is wire/mail fraud to fax/mail that application.
Everything came crashing down in late 2008 (see the video below with Peter Schiff, especially starting around the 20-minute mark). The too-big-to-fail banks, investment bankers (Goldman Sachs, JP Morgan, Morgan Stanley, etc.), and the Federal Reserve engineered the housing boom [Rolling Stone Issue 1082-83, Matt Taibbi takes on “The Wall Street Bubble Mafia,” July 2, 2009 – video here], and the homebuyers and taxpayers are the only ones paying the price (the financial industry, with the help of Congress, fleeced the taxpayers for $700 billion – Emergency Economic Stabilization Act of 2008 – after the real estate bubble burst).
“These guys actually believed that if they bought that house they would make $3 million over the next 10 years. Now, is it any wonder that they lied on their mortgage to get that $3 million? Is it any wonder that they signed up for a teaser rate? Do you think they cared what happened to the loan two or three or five years from now? They didn’t care what the reset was. They were going to be rich. All they had to do was buy the house and they were going to be rich. It didn’t matter what the mortgage payment was going to be because the house would take care of it!… It used to be that you worked hard and had a job so you could afford a house, but it became that if you have a house, you don’t need a job… because if you had a $500,000 house it was appreciating $100,000 to $200,000 per year. And for a few years it worked – the people who bought houses were getting rich, and the banks made it very easy to monetize that gain. You didn’t even have to sell your house to get the money because you could borrow out all the appreciation and still live there. Nobody wanted to sell; everybody wanted to buy.
“The free market was getting the blame for a problem that was created by the government. And what’s happening now, of course, is that the government is using this economic crisis that they caused to get even bigger, to grow their power, to expand, to come to our rescue, to save us from the evil forces of capitalism with government, with socialism… Obama thinks that government can erect a sound foundation, that central government planning can replace the market, that resources can be allocated efficiently by politicians who want to get votes as opposed to entrepreneurs who are looking for profits. He wants to replace the invisible hand with the hand of the state. And he thinks that he could do it better. The problem is, we had a phoney economy, that’s true, but we had a phoney economy because of the government, because the government undermined our productive capacity, undermined our ability to save, undermined our ability to manufacture – and nurtured and cultivated the consumer bubble, the service-sector economy that we had, that’s now collapsed.
“And it’s not government that’s going to restore it: we need free-market forces. What is government doing right now? They want to bail people out and they want to stimulate. The bailouts are the worst thing you can do, because they want to bailout companies that should fail, that should be bankrupted. The government wants to bailout out Wall Street investment banks. Why?! Let them fail. What do we need them for? Why do we need Goldman Sachs? Why do we need Morgan Stanley? Let them fail.
“You know the government tries to blame all the economic problems we have today on the fact that they let Lehman Brothers go out of business. Meanwhile, they bailed out everybody else that was in this gigantic mess! Maybe it’s not because they let Lehman fail; maybe it’s because of the other bailouts! Now they want to make us believe that since Lehman Brothers failed, they can’t let anybody fail. We don’t need all these investment banks.” – Peter Schiff, Henry Hazlitt Memorial Lecture, Austrian Scholars Conference, Ludwig von Mises Institute, March 13, 2009
If the feds are going to prosecute everyone who lied on their mortgage loan applications over the past decade or so, they better build many more prisons – but that would be ludicrous and an unfair burden on taxpayers and an unfair sentence for the tens of thousands, hundreds of thousands or millions encouraged by bankers and realtors to fudge their financials.
Monica Chacon and her husband, the lawyers taking crediting for working with the feds and helping to uncover alleged fraud by Juicy, appeared on Showbiz Tonight on August 2, 2013. The following is the link to the video and the accompanying article from HLNTV.com.
If Teresa Giudice needs someone to blame for her serious legal troubles, she might be able to look to her nemesis from “The Real Housewives of New Jersey” — and we’re not talking about that poor table she infamously flipped over back in the show’s first season.
Lawyer Monica Chacon was part of a fraud lawsuit that indirectly led to this week’s 39-count federal indictment against Teresa and her husband, Joe Giudice. In one episode during season 3, Teresa had Monica kicked out of a party (she had sparred with Teresa at a courthouse earlier that day).
Nowadays, Chacon must be doing a happy victory dance, right? Not exactly. In their first TV interview since the Giudices’ indictment, Chacon and her husband/fellow attorney, William C. Saracino, stopped by Showbiz Tonight to share their thoughts on the massive misfortune of their longtime adversaries.
Monica Chacon is a title examiner and owner of Chacon Title Agency, which specializes in researching records for real estate transactions. Certainly she assisted the feds in their investigation of the Giudices.
From the mymoneypro.org record on Chacon Title Agency:
A title company is a firm that specializes in researching records of a property. In real estate transaction, after a sales contract is signed, the title company checks the property’s title for liens, and facilitates a smooth closing of the property while ensuring that the purchase is processed correctly. Chacon Title Agency’s estimated number of employees is 2. Its office number is (973) 595-1225. Its fax number is (973) 595-1225.
According to legal documents, HSBC bank filed a complaint for foreclosure on November 24, 2010, against Monica and her husband, William C. Saracino, which they contested – several other clients were “wrongfully included in the plaintiff’s OSC application.” Saracino’s original mortgage loan for their 3,157 SF home on 50 Artillery Park Road, Totowa, NJ, was made on September 10, 2007 for $250,000 (the property is currently assessed at $622,400) – they missed a mortgage payment on March 1, 2010. On February 16, 2011, they filed a “contesting answer to the complaint” and “the parties conducted discovery and each filed motions for summary judgment – the matter was settled by way of dismissal prior to return of the summary judgment.”
On June 7, 2010, People magazine reported on the Giudice’s bankruptcy filing, and quoted Teresa as saying:
“While this is a personal matter, I realize that certain aspects of my private life will always be subject to scrutiny and distortion. What is true is that, due to the economy, most of my husband’s real estate ventures failed despite his hard work and effort. As a result, we looked to the Bankruptcy Court for a ‘fresh start’.”
Click here for the official document on the Giudice’s bankruptcy filing.
The rest of the June 7, 2010 article by People magazine is a as follows:
Indeed court papers filed with the U.S. Bankruptcy Court in Newark, N.J., show that Giudice, 38, and her husband filed for Chapter 7 bankruptcy, which requires liquidation of assets in order to pay creditors, in October of last year.
Papers also show that the couple had to undergo credit counseling, and were awarded a temporary stay on payments for their Cadillac Escalade and mortgage payments for properties.
In the documents filed, the pair declared their personal assets, which include real property and personal property, as $2,261,150. But their liabilities – $8,709,831.34 – far exceeded that number.
In addition, the couple had to assess their monthly income. Combining Joe’s salary as owner of G&G Stucco and Stone Specialist in Clifton, N.J., with Teresa’s income from Bravo and “monthly assistance from family members,” that number totaled $16,583.33. Their expenditures, including their mortgage, food, clothing, dry cleaning, health insurance and other expenses, total $16,582.
The couple owes more than $33,000 on various store credit cards, $85,000 for home repairs, and $91,000 for materials used to build their new home.
During the first season of The Real Housewives of New Jersey, Giudice, who famously flipped a table on the show, and her family moved into their $1.7 million mansion in Towaco, N.J. The reality star, who was often filmed treating her daughters to new clothing and expensive toys, was also depicted flashing stacks of cash while furnishing the house. And in a recent episode on the second season, she boasted of spending significant funds on her daughter Gia’s spa birthday party.
“When you fall, the way to success is to get up and learn from our mistakes,” Giudice says. “We are in that process.”
Based on public property records, the Guidices purchased their mansion in December 2001 for $530,000. It appears that the Giudices refinanced their mansion on September 12, 2008, consolidating their 15-year first mortgage ($379,500 on December 14, 2001), second mortgage ($210,000 on May 21, 2003), and home equity lines of credit ($250,000 on December 8, 2006 and $170,000 on February 5, 2007) totaling $1 million, and creating a valid first lien of $1.7 million at 7.25%.
The Giudices purchased their mansion before the real estate bubble – it needed to be restored and remodeled, which is why the price was only $530,000. Remember, Teresa told her brother Joe that the reason he finished his mansion first was because the Gorgas had a construction loan – apparently the Giudices were slowly renovating their mansion over the years, but once they were cast on RHONJ, they got loans to finish it sooner. Teresa wasn’t living in it when they started taping season 1 in 2008 – it was still be renovated.
The following is an excerpt from a June 28, 2010 People magazine article about the Giudice’s bankruptcy filing on October 29, 2009.
“I don’t think she had any concept of the finances,” said the Giudice’s former architect Jon Fellgraff.
As they sank money into building the house, Teresa shopped for luxurious furnishings. In one Housewives episode, she dropped $120,360-cash-on furniture for a single room. “That was just for the show, and I would never do that again,” Teresa insists. (Both the Giudices and the store, Unique Furniture and Design, were subsequently audited by the IRS. A store source says Teresa normally wrote checks and had opened lines of credit in her parents’ names to pay for her purchases.)
Teresa began showing signs of financial strain in 2009 when she stopped decorating the home with four rooms complete. “She still hadn’t even done the dining room,” says the source. By then Joe was busy fighting off debt associated with his real estate ventures; Teresa didn’t realize the extent of their money problems. “She knows nothing about the finances. She hates it all,” says Joe.
A successful businessman with multiple small companies-including pizzerias, laundromats and a stucco and stone distribution service-Joe had invested in several inner-city apartment buildings, becoming vulnerable to the volatile downturn in the market. But sources tell PEOPLE the market alone wasn’t to blame for their increasingly dire money problems. “They got money from me that was supposed to go to one of his apartment buildings, but I found out they spent it on their house,” says Joe’s former partner Joe Mastropole, who is embroiled in a separate lawsuit with Joe Giudice; bankruptcy documents show the Giudices owe him $586,000. “He wanted to collect rent and not pay the bills. He raked in $150,000 a month, without paying the bills, utilities or taxes on the buildings.” Joe Giudice’s attorney Jim Kridel explains that while it became impossible to afford the mortgage payments as tenants left the building en masse, “whatever money he did collect in rent, he was putting back into fixing the buildings.”
When they filed for bankruptcy last fall, Teresa and Joe surrendered two properties, two cars and other personal property in order to pay back creditors as required, but their main residence remains safe for now. “If they can’t afford it, they’ll surrender it at a later date,” says attorney Kridel. (The home was briefly listed for $3.99 million before Joe pulled it from the market on June 11, 2010.)
As for their lifestyle today, the bankruptcy only affects the assets they held prior to filing, so the couple are free to spend any newly earned cash as they please.
“I don’t spend money that I don’t have,” she says heatedly. “Believe me, going forward, I’ll show that.”
Click here for the full article from People magazine about the Giudice’s bankruptcy filing on October 29, 2009.
There have been so many government scandals of late, and pretty major alleged inappropriate activities–that in the past, usually don’t appoint to severe punishments. The majority of people, I think, would feel that politicians or in this case government agencies are not held to the same standard as an average citizen.
Again, since the Giudices withdrew their bankruptcy and agreed to pay creditors, I would like to know what happened to these loans. Have they been paid off or are currently being paid off? I think that is pertinent to know, since they withdrew the bankruptcy. I also believe if they have been paid or are being paid, I don’t think the banks care even if the applications contained false information including earnings–as this has been encouraged during the mortgage boom, and it had loan officers that could challenge and deny the loan application. I am not defending anyone doing this, I am not condoning it, but I believe the financial institutions knew it was happening and there were institutions that were encouraging it. Mail fraud and wire fraud because documents were sent back to institutions–the IRS scandal involved mail fraud, as well.
Obviously, failure to file tax returns or report income, is another matter–but I don’t understand how they are saying Joe Giudice didn’t file, but that is not one of the charges against Teresa–and married couples usually file jointly–so I question the facts relating to that??
I personally am choosing to wait until more facts are known and proven, as everyone is entitled to their day in court before condemning these people. I know these are serious charges and I am sure that they feel they have enough proof to indict them, so I am not saying that this is not without merit. It does bother me that they did withdraw the bankruptcy, and if they are willing to pay any deficient amount and penalties, that the prison terms are so severe.
On a personal note, we leased a gas station franchise 25 years ago, and this has been our livelihood since. A couple of years ago, the entity that handles supplying the fuel and the daily operations, filed bankruptcy. The company over the last several years established different companies, but things remained pretty much the same. Then shortly before filing bankruptcy, they established another company, and then once they came on board, they priced our fuel out of the market, driving down our business because they priced us $.15-$.20 cents above our competition. We were not making enough money from the fuel to cover the rent or pay the employees. This seemed deliberate to all of us lessees, that they were trying to drive down the business.
After the filing of the bankruptcy, they delivered fuel sporadically, and we would run out for a week or more, but could not purchase from anyone else. The real estate holder portion of the company (didn’t file bankruptcy) went in and asked for all contracts to be cancelled and they were given the right to find fuel suppliers. The last company that was established to oversee daily operations did not file bankruptcy, and we have all been told that they are responsible for holding all of our deposits plus interests; however, this company no longer has any employees and has been shut down. The bankruptcy court has no bearing on them, because that company didn’t file bankruptcy.
It appears to all of us that the oil company kept setting up interim companies–as we dealt with the same office for 25 years and the same employees for that same time. When a company is sold not only once, twice or three times, you would not deal with the same office and employees.
Our business has been killed–we cannot get fuel unless we sign with another company of their choice (unfavorable terms to us), and we have not been returned our deposits, but yet this new supplier wants a new deposit from us. We can get no answers from anyone or any attorney for any entity involved, except to tell us to hire an attorney and go after the company that didn’t file bankruptcy but doesn’t exist anymore.
Now when my children are all college age, and we are getting older and put 25 years of blood, sweat, tears, and money into our business–it has been destroyed for us, and it is costly to get an attorney to fight a huge company.
The problem with class action suit is everyone says the last company – that is no longer in business, but didn’t file bankruptcy–is the company they turned the funds over to, so who to sue? Now, the bankruptcy court should start at the beginning and follow the money trail, through each of the companies, and at least make them prove they turned over funds. And how is it that each time a new company was set up, we were managed by the same office and employees as were in existence 25 years ago–the bankruptcy court needs to follow those employees and that office through all the companies. If they did this, I am sure they could see that things were not on the up and up–it was like they were setting up new dummy corporations in order to get away with things.
The bankruptcy court has the power to do it, and then wouldn’t bankrupt us trying to pay attorney’s even as a group. I don’t know how many different attorneys and people I contacted–and it is the standard…do you have an attorney?? This is an oil company and they are probably some of the last corporations going bankrupt with the money they make. I am sure it was for tax reasons, hiding money, etc. So, we are doing what we can but not getting any help.
Since this is what large corporations get away with and can devastate and ruin our lives and livelihood–and we don’t have a bankruptcy court or the IRS helping all of little guys by investigating them–I can’t get worked up about a couple. If they are paying off their debts so as not to hurt anyone, I can’t see them doing prison time, when corporations who have the means to pay attorneys to help them hide money and get away with, don’t have criminal charges pressed on them.
It is apparent in our case, that this company knew what it was doing, going to do, and that it hid or misused millions of dollars of monies that belong to the lessees as it was put up for deposits. Deposits don’t go away in a bankruptcy since they weren’t company funds, but then you have the last company not file bankruptcy but basically dissolve, but your deposits were with them–now to me, this is truly criminal, not to mention that they have financially devastated hundreds or thousands of people, and we don’t and can’t get help or answers.
Frankly, if the Giudices pay back the money, don’t waste time with a small fish, and please go after these big companies who have deliberately used the system to bilk all of us.