Giudices’ Homes Are in Foreclosure; Teresa Could Be Released from Prison to a Halfway House or Home Confinement by December 23, 2015; Teresa Sues Bankruptcy Attorney and Hires Leonard Law Group
UPDATE 4/16/2015: On April 16, 2015, NJ.com reported that the bank which holds the mortgage on the Guidices’ Montville Township home started foreclosure proceedings against the couple, and that the couple’s other two homes are in pre-foreclosure:
Community Bank of Bergen County filed a notice of foreclosure in Morris County Superior Court Wednesday, April 15, on their Indian Lane property, according to court papers obtained by NJ Advance Media. The couple had returned to the mansion to the market this week with a $2.99 million listing price.
Community Bank was listed as one of the couple’s creditors in its 2010 bankruptcy filing, with a $1.7 million claim on the property. The couple eventually abandoned their bankruptcy claim after the trustee representing their creditors alleged they hid assets and income, which led to a federal prosecution that netted Teresa 15 months in prison and Joe 41 months. The trustee closed out the bankruptcy proceedings last year after only collecting $7,500; the end of the proceedings gave banks and other credits free reign to seek repayment.
The couple also had two other properties on the market since last year: a vacation home in Manahawkin and a modest three-bedroom home they rented out in Lincoln Park. But they pulled those homes off the market earlier this month. According to Zillow.com, the two homes are in pre-foreclosure, although there has been no notice of foreclosure for the Manahawkin home filed with Ocean County Superior Court. In May 2014, a mortgage holder on the Lincoln Park property filed a notice in Morris County Superior Court, but no further action has been taken.
UPDATE 4/23/2015: NJ.com reported on April 20, 2015, that the Giudices’ 1,350 SF shore home at 49 Sylvia Lane in Manahawkin, NJ (Stafford Township), will be go to action on May 19, 2015 (see image above). According to the Giudices’ October 2009 bankruptcy filing, the couple took out three mortgages on the property, which they purchased for $347,000 in December 2005 (near the peak of the real estate bubble). America’s Servicing Company holds the first mortgage and initiated the foreclosure proceeding.
Shore House at 49 Sylvia Lane, Manahawkin, NJ (Amount Owed – $550,266):
- 1st mortgage of $266,365 with America’s Servicing Co. (in Teresa’s name)
- 2nd mortgage of $33,903 with Ocwen Loan Servicing (in Teresa’s name)
- 3rd mortgage of $249,998 with Wachovia (in Teresa’s name)
6 Indian Lane, Towaco, NJ
UPDATE 3/1/2015: On March 1, 2015, the Giudices took their home off the market. It was on the market for six months, with two price reductions of $500,000 each. According to RadarOnline, Teresa and Joe are planning to let the house go into foreclosure, and multiple sources have confirmed the plan to stop making mortgage payments on the home and allow the bank to take back the property. The Giudices also placed their vacation home in Manahawkin and a rental property in Lincoln Park on the market in September. The Lincoln Park property is in default and has also been removed from the market.
On January 5, 2015, Joe and Teresa Giudice, for the second time, reduced the asking price of their home in Montville/Towaco, NJ, by $500,000. The new price is $2,999,000. The first $500,000 price cut was on November 6, 2014, which lowered the price to $3,499,000. The original asking price was $3,999,000, about twice the home’s estimated market value (Zillow estimates the home to be worth $2,036,408). The Giudices have a $1.72 million mortgage on the property.
According to TMZ:
The latest cut brings the asking price to a relatively reasonable $2.99 million. Their realtor believes that should do the trick. Teresa and Joe are cash strapped after their conviction and they want to radically downsize.
On September 8, 2014, just weeks before their sentencing hearing, the Giudices listed their mansion for sale. They also put their shore house and a rental property in Lincoln Park, NJ on the market (click here and read the last comment for more details).
In October 2009, when the Giudices filed for bankruptcy protection, they briefly listed their home for sale for $3.99 million, but they pulled it from the market on June 11, 2010. They withdrew their bankruptcy petitions in late 2011 after the court determined they both committed fraud by failing to disclose all their assets.
Given the chance to respond to the Trustee’s allegations, Joe Giudice had a change of heart about his bankruptcy. When questioned about hiding the family’s assets, Joe chose to invoke his Fifth Amendment right against self-incrimination; and, soon thereafter, he settled his dispute with the Trustee. [Source]
According to the consent order, Teresa agrees to waive discharge of her debts, and acknowledges that she wishes to resolve the Trustee’s proceedings against her “without the need for further inquiry or litigation, and without her making any further admissions.” [Source]
Since 2011, the Giudices have added the carport and detached garages (see photos above; click here for more photos of the home).
Teresa Giudice reported to federal prison in Danbury, Connecticut in the early morning hours of January 5, 2015, to begin her 15-month sentence for mortgage fraud and bankruptcy fraud.
While federal statute calls for an inmate to serve 85% of the sentence imposed, under BOP calculations the inmate will serve approximately 87.5% of their time. Under the Second Chance Act, an inmates may serve the last 10 percent of their sentence (up to six months) at a halfway house or on home incarceration. If Teresa earns her maximum of 60 days credit for “good conduct time,” she would serve 11 1/2 months in Danbury prison and then she would be released around December 23, 2015 to a halfway house or under house arrest to serve out the last 45 days of the 13 months to complete her sentence (15 months minus 60 days equals 13 months). Parole applies only if the sentence is for five years or longer.
When asked by Good Morning America about any possibility of early release, Teresa’s attorney, James L. Leonard Jr., said that would be “up to the judge and the Bureau of Prisons.” However, Leonard told the New York Post and ET that Teresa could be home by next Christmas:
“We project Teresa will be home sometime before Christmas.”
“Your expectations are you will serve 85% of your sentence and that then you will be able to get out… on house arrest at some point prior to the 85%,” Leonard revealed. “Right now, barring any change in her sentence, she is probably there until December.”
For Teresa, the Bureau of Prisons (BOP) calculated her release date with “good conduct time” credit as February 5, 2016.
At the beginning of a prisoner’s sentence, the full amount of “good conduct time” is credited (awarded up front) and reflected in the projected release date. “Good conduct time” is subject to forfeiture if the prisoner commits disciplinary infractions.
Good conduct time is credited at 54 days per year, prorated, pursuant to PS 5884.03. In reality, the BOP gives an inmate 47 days per year after the first year’s credit. So while the statute calls for an inmate to serve 85% of the sentence imposed, the BOP credits the amount of time actually served. So the BOP makes the inmate serve approximately 87.5% of their time. In other words, inmates who earn their “good conduct time” end up serving 87.5% percent of their sentences.
In Teresa’s case, approximately 60 days of “good conduct time” can be earned (approximately 4 days per month x 15 months), so the calculation by the BOP for her projected release is two months less than her 15-month sentence.
In addition to “good conduct time” credit, the BOP may award “extra good time” credit for performing exceptionally meritorious service, duties of outstanding importance, or for employment in an industry or camp.
“Extra good time” is awarded at a rate of three days per month during the first 12 months, and at the rate of five days per month thereafter. Furthermore, any staff member may recommend to the Warden the approval of an inmate for a “lump sum award” of “extra good time.” Such recommendations must be for an exceptional act or service that is not a part of a regularly assigned duty. The Warden may make “lump sum awards” of “extra good time” of not more than 30 days.
Under the Second Chance Act, inmates may serve the last 10 percent of their sentence (up to six months) at a halfway house or home incarceration (inmates can serve half of this period at the halfway house and half of this period on home incarceration). Ten percent of Teresa’s 15-month sentence is approximately 45 days, or about a month and a half.
The BOP calculated release date is the date the inmate is released from BOP custody, which includes prison time and halfway house/home confinement under the Second Chance Act.
Parole applies only if the sentence is for five years or longer: 18 USC4206(d) requires the Parole Commission to release an offender after he has served two-thirds of the sentence, unless the Commission determines he has seriously violated BOP prison rules or regulations or there is a reasonable probability he will commit a crime.
If Teresa earns her maximum of 60 days credit for “good conduct time,” she would serve 11 1/2 months in Danbury prison and then she would be released around December 23, 2015 to a halfway house or under house arrest to serve out the last 45 days of the 13 months to complete her sentence (15 months minus 60 days equals 13 months). She would then be on supervised release for two years.
For example, Bernie Kerik, a former New York City police commissioner and Al Manzo’s best friend, spent the last five months of his four-year federal sentence on home confinement (he pleaded guilty in 2009 to eight charges, including criminal conspiracy, tax fraud and lying under oath).
Leonard, who has “been involved with Teresa now for more than a month,” is a criminal defense attorney turned entertainment lawyer (Leonard Law Group, LLC) who is making the rounds with various media outlets, putting a positive spin on things.
Leonard told the New York Post that Teresa is a very strong women and her only concern going to prison was that of her four children:
“Teresa’s only concern going into the prison was that of her four children. She never once discussed how this was going to affect her, only how it was going to affect them. Teresa is very strong and I believe she will emerge from this entire experience stronger.”
It is plausible that Leonard is working with the Giudices to sell stories and photos of the family to tabloids/webloids (see comments), including two photos of Teresa at the diner before she surrendered herself to Danbury prison (click here for the photos at TMZ). Leonard also has provided legal services to the Wakiles and the Gorgas. In addition to being an attorney, Leonard is owner of Boardwalk Journal Magazine.
In 2010, Leonard was retained by Joe and Melissa Gorga to handle their original contract negotiations with BravoTV for The Real Housewives of New Jersey. Rich and Kathy Wakile also retained Leonard. Leonard appeared in three episodes of The Real Housewives of New Jersey (twice in season 3 and once in season 4). In 2011, Leonard, on behalf of the Gorgas, threatened to sue any media outlet that called Melissa a stripper.
On Teresa’s surrender date, it was Leonard and one of his associates who drove her to Danbury federal prison. Teresa hid in the back seat of the SUV. According to Leonard:
“Our plan was that we were going to leave her house at midnight to start our journey to Danbury. I got to her house at 10:30 p.m. and it was somber. The kids had already been put to bed. She was cleaning up the kitchen two minutes before we left for Connecticut. She was still running around, making sure the house was normal. It was all about her children and her family. That’s been her singular focus. The main reason we left at the time we did, is she didn’t want her kids waking up for school and have a million people in front of their home waiting for Teresa to come out.
“She wore a black sweat suit and obviously she [will have] a uniform when she gets there. She looked beautiful. She looked as if she could’ve begun filming another episode of The Real Housewives of New Jersey. Her hair and makeup were intact, and she looked great.”
Leonard told Us Weekly that the car ride to Danbury took about 90 minutes, and the group arrived at around 1:45 AM, ahead of Teresa’s 3 AM reporting time, first stopping at Elmer’s Diner in Danbury, about a mile away from the prison, before surrendering (click here for photos that TMZ posted of Teresa at the diner).
Leonard told PEOPLE magazine that Teresa was supposed to surrender by 10 AM but she prearranged with prison officials to turn herself in early and use an alternate route to avoid a media circus:
Teresa was supposed to appear at the prison by 10 a.m. on Monday. But, says Leonard, on New Year’s Eve, Teresa asked him if she could turn herself in before that. Officials agreed to let her surrender at 3 a.m. and let her use an alternate route in order to avoid the likely media attention outside the prison main entrance, he says.
“The reason she wanted to go early was because she didn’t want to have her children wake up on Monday morning and see a big [media] circus outside of the house,” he says.
Because they had time to spare before her arrival, she stopped off at a local diner just before 2 a.m. “She had a breakfast sandwich and some coffee,” Leonard says. “She was joking that she shouldn’t be eating at this hour. I said, ‘You could make an exception.’ So she ate.”
When she arrived at the facility, Tersa spent between 10 and 15 minutes in the pre-processing area, where officials introduced themselves to her.
“They talked about starting her commissary account. They told her she would be able to make her first phone call within 24 hours once they had her account set up. They said they were going to make it possible for her to meet with her immediate family this weekend. So she was very happy with that. There weren’t going to be any delays with that stuff,” says Leonard.
“Everybody was extremely respectful and courteous. It was very easy to ease her way into this because everything was positive. There was a lot of positive energy there.”
Leonard presented her with a set of rosary beads and a necklace with two medals – one for St. Christopher and one for St. Teresa.
“They let her keep all of that,” he says. “She was very happy with that, and she told me she would keep them with her all the time.”
When it was time to say goodbye, he says he hugged her and told her, “You’re going to be fine.”
“She said, ‘Yeah. I’ll be fine,’ ” he says. “She was very stoic and very strong. I left them there. They didn’t handcuff her. She was just standing there.”
Leonard had no sooner left the building when he returned to use the restroom.
“As I was walking back, they were walking her out of the first building to another building,” he says. “She saw me and said, ‘What are you doing?’ I said, ‘I’m breaking you out of here.’ She laughed and said, ‘I wish.’ ”
He continued: “The last thing she said to me was, ‘I’ll be fine. Tell Joe and the girls I’m good.’ ”
He isn’t sure if the children will come visit her this weekend. “But they will 100 percent come see her,” he says. “I think she wants to see them whenever she can.”
Leonard told ABC News that “Teresa was anxious to get in, get this thing started, get it behind her, and get back to her family:”
Leonard said Teresa prepared for her time behind bars by corresponding with recently released female prisoners from Federal Correctional Institution, Danbury. She was told to be “friendly but guarded” at the prison, and to savor moments with her family, Leonard said.
“They told her to keep her head up, that she would make it through,” Leonard said.
Leonard told E! News that Teresa “was very upbeat and positive,” as well as “talkative and lively:”
“There was some nervous energy there, but not because she was scared. She was just anxious about getting started,” said Leonard.
And contrary to previous reports, the mother of four “did not have a wedding band with her.”
Also, despite the rumor mill going into overdrive about such silly things like hair extensions, Leonard shares that “she looked exactly the same as she always does. Her hair was the same length, no difference.”
He added: “When we got there, I asked the prison officials two questions. First, when can she make her first call? Because she brought the money for her account with her, they said she would be able to make a call within 24 hours. Second, when can she have her first visit? We were told her first opportunity would be this weekend. I told this to her husband and he was very, very excited.”
Leonard told the The Bergen Record that he expected Teresa’s family to visit her as soon as this coming weekend:
“I spoke to the officials about it. They’re going to make arrangements so that this weekend she can visit with her immediate family, so I’m assuming that means her husband and the girls,” Leonard said. “And I plan to continue to visit with her and communicate with her and phone her.”
When asked, “What is the future of RHONJ and Giudice’s association with the show?,” Leonard could shed no light. “I’ve been involved with her now for more than a month, I guess, and we’ve talked about literally everything under the sun – with the exception of The Real Housewives of New Jersey. There’s so many more pressing things to deal with that that has not come up. And I don’t think it’s a focus of hers at this time.”
As for rumors that Teresa plans to use her time in prison to write a book about her life there, Leonard said: “At the moment, her focus is getting in there, getting acclimated to her surroundings, making sure that everybody’s good at home. And then, who knows what the future brings?”
The Bergen Record also reported that, “while paparazzi camped outside the Giudices’ home in the Towaco section of Montville on Sunday night, angling for a shot of her leaving for lockup (see video below), only a handful of media members, all Record staffers, were waiting for her at the prison’s stone gates in Connecticut just after 3 AM:”
Teresa’s attorney James J. Leonard Jr. drove up the prison’s driveway in a black GMC Denali. Seated in the SUV’s back seat, behind tinted windows that shielded her from outside view, Teresa was reportedly dressed in a simple black sweat suit. And she was not being followed by reality-TV cameras. Her vehicle was trailed by a Danbury police car.
The 42-year-old reality star will serve her time at the minimum-security satellite camp for women on the property, which also houses a low-security prison used by men.
Waiting for her, inside, was a sort of inmate Welcome Wagon, according to Beatrice Codianni, who spent 6½ years at the FCI Danbury minimum-security camp. It’s not uncommon for inmates to hear through the grapevine that a new person is about to arrive, she said.
“I had it from a very reliable source that some older women were there to greet her, to make her feel welcome, to show her the ropes and put her at ease,” said Codianni, who’s now managing editor of the national prison news and information website, Reentry Central.
So what did Teresa take with her to the federal prison? Leonard told E! News:
“She came with $200 to put into her commissary account. She also had her legal documents with her which also contained a list of addresses for her to write friends and family.”
TMZ reported that “Teresa can spend $320 per week at the prison commissary, and that her family can put as much money in her account as they want.” (Click here for the Danbury prison commissary list.)
Leonard told Good Morning America (click here for video) and ET (click here for video) that Teresa’s husband Joe “was somber,” Teresa was mentally and emotionally prepared, and other inmates advised Teresa to “keep her head up:”
“The enormity of this entire situation hit him… He was very low key and, you know, it was tough. It wasn’t easy for him.”
“Mentally and emotionally Teresa was prepared,” he said.
Once she arrived, the other inmates “were giving her the lay of the land,” said Leonard. They advised her to “keep her head up.”
Joe Giudice Drives Daughters to School on Teresa’s First Day in Prison (Video)
Joe’s driver’s license is not suspended at this time (in January 2010, Joe was charged with driving under the influence: he later was convicted and his license was suspended for seven months). However, under Joe’s plea deal with the State of New Jersey for possessing a fraudulent driver’s license, his license will be suspended for a minimum of six months. He will return to Passaic County Superior Court in Paterson, NJ on March 20, 2015 for his formal sentencing, at which time the judge will rule on the length of time his driver’s license will be suspended and the fine he must pay (the maximum is $10,000). For the state charges of identity theft and forgery, Joe received a suspended 18-month state sentence that will run concurrently with his federal sentence, which means there will be no additional jail time.
Us Weekly reported that Teresa spent Sunday, January 4, the day before she surrendered, attending church with her family (image below) and throwing Gia an early 14th birthday party:
“They had a birthday party for Gia,” a source tells Us of the family’s last free day with their mother, who will miss the 3KT singer’s actual birthday on January 8. “They had a cake and a celebration.”
Before wishing the aspiring singer a happy birthday, Teresa, along with her husband Joe and their daughters, attended mass at Sacred Heart in Newark, New Jersey, the same church where she wed Joe 16 years ago. “She wanted to go there yesterday and be there with the girls,” her lawyer, James J. Leonard Jr. told Us.
Later that night, Teresa said her goodbyes and prepared to report to prison.
On March 4, 2014 Teresa pleaded guilty to one count of conspiracy to commit mail and wire fraud and three counts of bankruptcy fraud. Both Teresa and her husband, Joe, were charged with hiding assets from bankruptcy creditors and submitting phony loan applications to get some $5 million in mortgages and construction loans. Joe was also charged with failing to pay taxes totaling more than $200,000.
In the federal indictment handed down on July 29, 2013, which was amended on November 18, 2013, Teresa and Joe were charged with 36 counts of mortgage fraud and bankruptcy fraud: counts 1 through 13 alleged that the couple fraudulently incurred large amounts of loan debt by making false statements on loan applications and supporting documents; counts 14 through 36 alleged the couple then attempted to fraudulently discharge that debt by making additional false statements during the bankruptcy process (in many cases, the properties the couple acquired with fraudulent loans were the same properties they either failed to disclose their ownership of or concealed income from during the bankruptcy process).
The couple was sentenced on October 2, 2014: Teresa was given until January 5th to surrender. At the sentencing hearing, the judge criticized the couple for not disclosing all their assets as required under their plea agreement, calling it “the same pattern of obstruction, concealment and manipulation as they showed in the bankruptcy case.”
Teresa will serve her sentence first, and upon her release her husband, Joe, will begin his 41-month sentence for mortgage fraud, bankruptcy fraud, and failing to file a federal tax return in 2004 (he was charged with five counts of failing to file taxes and pleaded guilty to one count as part of his plea deal). The judge sentenced Teresa to a sentence below the range sought by the U.S. attorney’s office and staggered her sentence with her husband’s so they wouldn’t be in prison at the same time and unable to care for their four daughters. Joe was advised by the court that he faces deportation, a decision that will be made by U.S. Immigrations and Customs Enforcement following completion of his prison term. His attorney said Joe came to the U.S. as an infant and didn’t know he wasn’t an American citizen until he was an adult. Joe also pleaded guilty in state court in October to unlawful use of identification in a case involving a bogus driver’s license. His 18-month state sentence will run concurrent with his federal sentence.
The couple’s debt has grown from $11 million to more than $13 million. Because they failed to disclose all their assets on their October 29, 2009 bankruptcy petition (and later amendments), the court-appointed U.S. bankruptcy trustee denied the discharge of their debt. According to a final report issued by the trustee on April 8, 2014, the Giudices have not made any attempt to pay off their debt using the millions Teresa has earned from her Bravolebrity—they paid $7,500 toward attorney fees and nothing to their many creditors.
On December 2, 2014, Teresa’s new attorney, Carlos Cuevas, filed a lawsuit in New York against her former bankruptcy attorney, James Kridel, alleging legal malpractice and negligence and claiming that he “failed to perform a reasonable investigation concerning the petition, schedules and statement of financial affairs.” Seeking $5 million+ in damages, the lawsuit states that Kridel’s “failure to exercise that degree of reasonable knowledge and skill that lawyers of ordinary ability and skill possess” caused her lost income, legal fees, botched business deals, and public ridicule. Teresa claims that Kridel failed to list her employment, income, automobiles, business interest, rental income, and certain bank accounts in the bankruptcy filing.
Reached by phone in late December 2014, Kridel called the lawsuit “ridiculous” and denied the claims:
“We did what we were supposed to do,” he said. “We can only rely on the facts that were provided to us. I don’t wish her any ill will, but I would have preferred a ‘thank you’ rather than a lawsuit.”
UPDATE 7/30/2015: On July 24, 2015, Carlos Cuevas discontinued the New York lawsuit against Kridel and it was “dismissed without prejudice”; however, on behalf of Teresa, Cuevas refiled the suit in New Jersey on July 28th. Kridel told PEOPLE magazine on July 30th:
“She [Teresa] went to jail because she committed crimes, which were not participated in by me. She had about 2.5 hours of testimony before she went to jail where she took full responsibility for the crimes.
“However, I suppose things have changed in her mind. I have read the transcript and the judge made it very clear that she had originally decided not to send her to jail, but because she had falsified her assets before the sentencing she decided to send her to jail.
“She was chastised by the judge well after I represented her. There were failures to file income taxes, which occurred many years before we knew her. Her falsifying W2’s for mortgages – that has nothing to do with her bankruptcy.
[That bankruptcy] “probably brought attention on her, but this is something which has a lot to do with all of her comments on TV, showing off her huge mansion and the jewelry she wears and the cash she spends. She’s got to be subject to scrutiny. But it’s not as a consequence of anything that occurred in the bankruptcy petition.
“That’s what occurred on TV. Prosecutors watch TV and they draw their own conclusions. She wasn’t sent to jail for anything that occurred as a consequence of her coming to this office. She went to jail for things she did herself.
“We didn’t falsify a W2 for her, her tax returns, or not file them. These were supposed to be done by people other than us. To say that we participated is ridiculous. We tried to preclude them from selling her assets in a public sale. We were successful in representing her. I think we did everything we were supposed to do. I don’t think we did anything wrong.
“[During the bankruptcy proceeding the government notified Kridel, saying that she had not filed tax returns for 10 years] Clearly we were not involved in that. She well knew that, unless she was in a coma for 10 years. That triggered people to examine, if she didn’t have a tax return how did she get mortgages? This came out of the blue. We had wished her well.
“She seems to go from attorney to attorney. I see some of the comments she makes from prison. If they refer to us, they’re ridiculous. All we did was try to help her. In a bankruptcy you have to sign a petition. And you say that everything in it is true and accurate. She signed it. Then you go to the meeting with the Chapter 7 trustee.
“[When meeting with the trustee] They ask, are the statements here true and accurate? Yes they are. After that she appeared at a deposition in bankruptcy court. Same questions asked. All of those sworn statements by her are now untrue? She was here on a regular basis. I am sorry this is what she thinks. She admitted under oath that she took full responsibility for these crimes. I guess now she wants to say that she didn’t commit them, somebody else did.”
The Giudices were responsible for disclosing to their bankruptcy attorney all their income, assets and liabilities, which they obviously failed to do or else it all would have been listed on the petition. Both Joe and Teresa signed their bankruptcy petition (this is documented on camera in season 3, when Kridel explicitly says to them that they signed the petition), attesting under the penalty of perjury that that the information contained in the filing was true and correct. Their original petition was filed jointly, but the court later severed their cases so their issues with concealment of assets could be separately addressed.
The image above is from the Giudices’ bankruptcy petition, which shows they paid Kridel $3,800 for bankruptcy fees and costs. No attorney would risk a malpractice lawsuit for a $3,800 bankruptcy fee. Kridel could only submit to the court the information he was given by the Giudices (bankruptcy ethics only require a “reasonable” inquiry by the attorney). When Teresa signed the documents, indicating she was declaring all her income, assets and liabilities under the penalty of perjury, she surely understood that she needed to be truthful and honest. By filing this malpractice lawsuit, Teresa has opened a can of worms: she has now waived her attorney-client privilege, which could lead to exposure of more crimes.
Kridel seems to genuinely care about the Giudices, especially Teresa. He attended her Fabellini launch party in October 2011 (image above), so it must be a slap in the face for Teresa to file this suit against him.
The following are some of Kridel’s quotes defending the Giudices.
Regarding the auction of their furniture, originally scheduled for August 2010, but was postponed and then later cancelled: “You can’t sell used, personal property for the sticker price. A $5,000 chandelier won’t sell for $5,000. Nobody will buy a used mattress. The real issue in bankruptcy is, what’s the value of everything? And at the time of the bankruptcy, these things didn’t have any value.” Kridel said the items for sale – including the couple’s wedding rings, children’s toys and even a suit or armor – are expected to fetch only $51,000 at auction (the couple is entitled to $52,000 worth of personal property that is exempt from the bankruptcy filing). Kridel added that other than the $51,000 in property, “they have no assets.” Kridel said: “Obviously we have objections to what they’re trying to do. I don’t think Teresa is happy seeing all her belongings displayed on the Internet … clearly they are under the microscope because they are famous.” Noting that many of the items are “used” and typically classified as exempt property, Kridel said that his clients could be unfairly harmed if their possessions were to be snapped up at bargain-basement prices. Kridel complained that his clients could be left with an empty home and no funds to replace their furnishings. “There may be a celebrity value to certain things,” Kridel noted and admitted that “there are extravagances here due to celebrity.” Among the items on the auction block is a boat – something that is not a necessity to live with. “They understand that,” Kridel explained.
Regarding Teresa’s $60,000 spending spree immediately after filing her bankruptcy petition on October 29, 2009: “That was the money she earned as an advance for her book Skinny Italian. Since she earned it after the filing, she was absolutely free to spend it. If she put it in the bank, they’d say, ‘Why don’t you pay your creditors?’ And the trustee might freeze the assets while he investigates whether she can spend it or not. Legally you are entitled to spend money you earn after a bankruptcy. She needed to re-buy furniture because she didn’t have any furniture in the house. It’s a big house and she wanted furniture consistent with her style on the show. There is nothing wrong with doing that, except that it doesn’t look good for her to be doing it.”
Regarding Joe forging his former business partner’s name on mortgage discharge papers: Kridel said Joe admitted to forging the document and said he did so with Mastropole’s permission.
Regarding Teresa’s understanding of the couples’ finances: “I did not believe that Teresa was all that knowledgeable about any of the finances of her family until ultimately she became the breadwinner. Everyone seems to blame her that she knew or should have known. I don’t find that to be true in real life, though. People come in and sign tax returns quite often, and the spouse who is not in charge of the finances has no information. They just do what the accountant tells them.”
Regarding Teresa paying off her debt: “Teresa has always wanted to be able to say that she paid her creditors.” Kridel clarified that nearly all of the debt was Joe’s and said: “The cost of litigation might exceed what she owes. She may not be able to pay all [her creditors] with one check, but she can pay them back. She wants to do the right thing.”
Regarding the brawl in Punta Cana in February 2011: “They acted in self defense. If someone threatens you, you can react with reasonable force. That’s what my clients did.” Kridel said that after the champagne incident there were words and a member of the Chicago family physically assaulted Teresa. “Teresa was hit and assaulted. She is still in pain over this. This wasn’t something that was minor.” But the suit claims that Joe Giudice and Albert, Chris and Albie Manzo attacked some of the family members “without provocation.” However, Kridel claims that’s not true. “It’s absolutely ridiculous that they were assaulted without provocation,” he said. “These people are very litigious and they are looking for an opportunity to look into someone else’s pocket.”
Regarding the trustee’s decision to deny the bankruptcy discharge: “I am going to be sending a letter to the U.S. Trustees Office because I would like to resolve with them their issue rather than have to try it. I’m not doing it out of desperation; I’m doing it in their [debtors and U.S. Trustees] best interest. That’s the next step. But ultimately the ball is in their court. Instead of just looking at it as ‘Joe Giudice,’ it is a family, and to deny a discharge in this case would destroy this family. Some of the family members are clearly not responsible for anything that occurred here.” Kridel argued that Joe didn’t intentionally omit assets from the petition: “If you have a bank account that has zero in it, but you didn’t disclose it because you didn’t realize it was open, I don’t believe that to be a really egregious offense.” He also said: “The omissions made would not change the outcome of the case. Their discovery would not increase the value of the estate. To deny a discharge would be a very severe consequence and I don’t think it’s deserving. They’re going to owe a significant amount of money, including any IRS debt. Other than the personal property in the house, they don’t really have any assets so they are going to start over again. If they don’t get a fresh start [with a discharge], it’s going to be almost impossible to get back up on their feet.”