Yesterday Teresa Giudice and Guiseppi (Joe) Giudice were indicted by a federal grand jury in Newark, New Jersey on the following charges:
- Conspiracy to Commit Mail Fraud and Wire Fraud
- Bankruptcy Fraud
- Bankruptcy Fraud – Concealment
- Bankruptcy Fraud – False Oaths
- Bankruptcy Fraud – False Declarations
- Failure to Make Tax Return
The mail fraud and wire fraud counts are related to false statements and documents that the Giudices allegedly submitted in order to get loans. Banks which loaned the Giudices money included Park Avenue Bank, Wachovia (now Wells Fargo), Sterling Bank, and Community Bank of Bergen County. Non-bank lenders include HomeComings Financial Network, Eastern American Mortgage, and Alterna Mortgage.
Several months ago I wrote an article on the Xyngular weight loss program being pimped by Jennifer McKinney (aka mommy blogger MckMama). The bottom line for me was that these programs do not work because:
- They create short-term weight loss through a dizzying cycle of starvation, unhealthy meal replacement shakes, and questionable drug-like “supplements” that are supposed to get you high and suppress your appetite
- The representatives make repeated health claims are strictly prohibited by the federal government. The distributors claim that the products cure anything and everything from joint pain, to autism, to diabetes, and more.
- Xyngular (and Herbalife, Medifast, Take Shape For Life, Visalus, Isagenix, and the rest of them) have poor long-term results because they are fad diets that rely on starvation and potentially unsafe substances. The vast majority who lose weight with these programs gain it all back.
Readers of the Fraud Files are familiar with the story of Jennifer McKinney – – mommy blogger who calls herself MckMama – – who is prone to lies and exaggerations. She and her husband Israel were accused of lying to and manipulating readers for financial gain. What began as a touching story of a family with a very sick child turned into a long-running gravy train, from which Jennifer and Israel McKinney profited handsomely.
But making hundreds of thousands of dollars from gullible sheeple reading a blog wasn’t enough for the McKinneys. No, they had to run up over $725,000 of debts and attempt to have them discharged in bankruptcy. Fortunately, bankruptcy trustee Gene Doeling caught on quickly, and accused them of attempting to defraud their creditors by failing to report tens of thousands of dollars of income per year.
Jennifer McKinney – – former mommy blogger nicknamed MckMama – – has good news for the many creditors that she owes hundreds of thousands of dollars…. SHE CAN PAY THEM! This month’s issue of Xyngular’s Momentum magazine featured Jennifer Howe Sauls McKinney on the cover.
Publications like this are purely recruiting tools. While 99% of people participating in multi-level marketing will lose money, there are a few at the top of the pyramid who will make big money (only because many below them are losing money). Companies like Xyngular parade around the big winners, hoping to continuously recruit new victims into their schemes.
Multi-level marketing companies are getting lots of attention lately thanks to the Bill Ackman smackdown of Herbalife in December. MLMs offering “nutrition products” are of special interest to consumers, and with good reason. Companies like Isagenix, MonaVie , Usana, Mannatech, and Shaklee all offer magic potions that claim to help you lose weight, absorb more vitamins and minerals, and cure all diseases.
Of course, many of these health claims are strictly prohibited. Nutrition MLMs generally have disclaimers stating that their health claims have not been evaluated by the Food and Drug Administration, and that the products are not intended to diagnose, treat, cure or prevent any disease. But that doesn’t stop the distributors for making such claims, and the company management turns a blind eye to it.
For some time now, we have been following the Jennifer McKinney bankruptcy trainwreck, in which Jennifer and her husband Israel McKinney were alleged to have falsified information and concealed assets. (In the world of forensic accounting, we call that fraud.) For those new to the site, you can read about the origins of the MckMama fraud, complete with solid proof of the lies.
Today a concerned citizen posted some information about the Cadillac Escalade Jennifer McKinney is now driving. Following a very suspicious car accident in October, MckMama began driving a 2005 Escalade. The citizen retrieved a CarFax report on the Escalade, which showed the vehicle being purchased in January 2012 and registered in Onalaska, WI. The report then showed the vehicle being sold in November 2012, which corresponds to Jennifer’s purchase of it.
For the last several months, we have been following the story of Jennifer “MckMama” McKinney and her bankruptcy filing from nearly a year ago. By spring, trustee Gene Doeling had her number, and was preparing to file a motion objecting to the bankruptcy. In not so many words, Mr. Doeling alleged fraud against Jennifer and Israel McKinney, saying things such as manipulated, destroyed, concealed, falsified, false, and intentionally.
In my first story on the MckMama bankruptcy, I detailed the lies and deception of Jennifer Howe Sauls McKinney, both to her blog readers and to the bankruptcy court. Why such a public discussion of this case? There are two reasons. First, bankruptcy itself is a public process. The documents are readily available on Pacer, the federal government’s online warehouse of court documents.
We’ve been discussing here the case of Jennifer McKinney (aka MckMama) and Israel McKinney (dba Kieran’s Contracting) and their alleged fraud perpetrated on the bankruptcy court. Questions have been raised about the likelihood of the McKinneys facing criminal charges, despite a quiet resolution to their original bankruptcy filing (they have waived bankruptcy and can never have those debts discharged in bankruptcy in the future) and the related case filed by trustee Gene Doeling objecting to the discharge of their bankruptcy (resolved with the McKinneys paying $3,500, the value of some of the assets they failed to disclose, and therefore were non-exempt and could be used to pay creditors).
The bankruptcy of Todd Brunner, a Milwaukee area landlord, was thrown out by a judge earlier this year after it was discovered that he did not disclose all his assets. He had $19 million in debts, so not being able to ditch out of them in bankruptcy was probably pretty painful. (The IRS alone says he owes $400,000 to them, but since he hasn’t filed a tax return since 2008, who knows how much higher the real number could be.)
Jennifer McKinney (aka MckMama) and Israel McKinney appear to have settled all claims in their bankruptcy filing in which trustee Gene Doeling alleged fraud, saying:
The Debtors have concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtors’ financial condition or business transactions might be ascertained. The debtors failed to keep adequate books and records from which their financial transactions could be ascertained. The co-debtor was receiving cash payments from photography clients that were not disclosed and for which she has been unable to provide an accounting.