NJ 'Housewives' Couple Plead Guilty to Fraud

Joe and Teresa Giudice pleaded guilty to several counts of loan and bankruptcy fraud.
3:00 | 03/04/14

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Transcript for NJ 'Housewives' Couple Plead Guilty to Fraud
This is a special room. I'm Michelle Franzen in New York with an ABC news digital special report real life crashes down on to reality TV stars. Teresa and judge you guys who came to fame on Bravo television series real housewives of New Jersey pled guilty in federal court today. To several counts of loan and bankruptcy fraud ABC's Devin Dwyer joins us now with more DeVon. Hey good afternoon Michelle you know we won't know until July how much time did you -- might face behind bars but one thing we do know. Her fairy tale lives are about to get a whole lot different. Pictures. No -- Today real housewives of New Jersey stars too recent to. The couple back in court for possible prison time over 41 counts of fraud. The Judy chase pleaded guilty as part of a deal with federal prosecutors. Are accused of engaging in mail and wire fraud bank fraud and bankruptcy fraud over ten years. Authorities say they illegally obtained more than five million dollars in loans to help lavish their lifestyle featured on the show. The notoriously hot headed -- was once adamant about their innocence pleading not guilty and asking for separate trials but an about face. When you look at the evidence everything's -- apple for you and you say. The case is overwhelming against us. Let's go for the better situation which is less time in jail every time the couple now faces hard time behind bars. For Teresa Judy -- that means potentially and enter extravagant spending an opulent mansion living. I can't just be upset and -- up in a bond wouldn't. And just going -- and locked the door I can't in the -- have four darted. For Joseph GDJ who's an Italian citizen a guilty plea could also mean deportation. The separation from his family he says he fears most convenient -- and one. You're weak -- make it. Now Joseph -- -- also faces state charges for allegedly obtaining a driver's license by impersonating his rather. Those charges carry up to ten years in jail though a trial date for that case Michelle has not yet been set. David Dreier thank you very much joining me now ABC news legal analyst Ryan Smith Ryan are you surprised at all that the -- -- took this plea. Not at all because they were facing double digit years in prison and according to us sources. The evidence against that was pretty strong when you have a situation like that and you're talking about facing off against the federal government. You want to take a plea that required that puts a lot less years in prison especially if their evidence is strong. What's interesting here is. Whether the judge will approve the deal at the end of the day a judge has to approve all plea deals. So whatever the time -- -- they end up spending behind bars if they in fact do get time behind bars. Will the judge approved. And exactly we don't know exact. Exactly that yet sentencing takes places different time. Now give us an idea these are some serious charges you know -- -- pay stubs failing to file tax returns conspiracy to commit mail and wire or wire fraud. Was it a Smart move not to leave this in the hands of the jury -- Think it was especially if the case against them as strong. Because when you talk about the scheming that's alleged here that their work pay schemes alleged so that they can inflate their income at different times to get loans. All of those things sometimes Carey 1020 more years in prison so. You want to avoid that if you think the evidence against she was strong and I think if that's the case and that sounds like what happened here then yeah it's the Smart play. Certainly both of them -- advised by their lawyers of what's best for them to do. What are realistic chances though that both will do jail time in this case is that it is there any way for them to avoid it at this point. I think there's a good chance for them to do jail time because they're -- high profile couple. Well known and in many cases like this the government wants to make an example and show. If you're going to -- the government -- that the allegation if you're going to commit bank fraud or wire fraud or try to inflate your income to get loans. Then this is what will happen -- so I think somewhere in here. They're gonna try to make an example of them at least give them some jail time to let others know. This is not something to ever be done and of course judge you guys also facing other issues legal issues he's an Italian citizen. Is it still possible that he could be deported at the very real possibility and that's going to be in the hands of the immigration office to what I think will be interesting and all this. Is whether or not the plea deal includes a deal to keep him in the country because technically. That should be out of the hands of this deal. This deal should be focused mostly on whether or not he serves time and what happens from the guilty plea. Whether or not you're deported depends on what immigration wants to do. And some of the other legal actions that he's involved in his driver's license impersonating -- brother one point. And we've heard reports that his driver's license had been suspended something like 47. Times. How is that possible -- -- Not gonna look good in a courtroom if that does in -- come into this but it certainly shows at least -- prosecutors in this case they'll try to say that. Teresa and Joseph flaunted the -- they didn't really care they didn't think it applied to them and therefore they might try to put the hammer down below have to wait and see when they come in for sentencing. And Ryan of course very public figures on this series that they've been on. They have four daughters what happens to the children. Both parents go to prison at the same time and is there a chance for them not to go to prison at the same time. If they are sentenced to that. There is a very real possibility the back -- happening there is precedent and many other cases across the country that one parent goes and and the other parent goes. But what courts will do is try to look at what's in the best interest of the children. And in many cases like this if in fact both parents go to jail the same time. The courts may say is there a grandparent is -- a family friend that can be trusted here to raise the children. And in the court we'll check in with that group from time to time. But this is not a situation where you -- -- the kids in harm's way because of what the parents did. And Ryan one last question give me an idea of the scope of this case federal charges we've seen. The federal cases go forward before trial what do you think was going on behind the scenes what do you think. The lawyers were -- in the GICs I think the lawyers were telling did you ices. We have the evidence against you and it's not looking good it's looking like there was something that went on here that was against the law and especially. Against when you talk about mortgage fraud and bank fraud and wire fraud. These are the kinds of things that the government wants to make an example out of -- state. This is something that can be done people think they can do it without getting attention. But it gets attention so I think the lawyers told them look I know you wanna avoid hard time I know you wanna avoid penalty here -- -- -- said not guilty. If the evidence is stacked against you you have to take the deal otherwise. You're looking at scores of years in prison Brian Smith thank you so much for joining us on this issue. Of course this has been an ABC news special report reality TV stars Teresa and judge you guys plead guilty to federal fraud charges both. Now facing possible jail time -- will be sentenced at a later date I'm Michelle Frandsen. New York.

This transcript has been automatically generated and may not be 100% accurate.

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