Teresa Giudice and her husband Joe submitted a plea deal to the U.S. attorney prosecuting them, but the deal was rejected even before the reality star's August 14 hearing.
"Teresa and Joe's defense team submitted a plea deal on Wednesday but the US Attorney denied it," a source close to the situation told Radar Online. "Teresa wanted a plea deal that keeps her out of jail so she offered to do anything else but jail time and have Joe serve all of the time in jail. The prosecutor dismissed the deal outright."
The reality couple has been accused of exaggerating income when applying for loans and not disclosing full income amounts when applying for bankruptcy after they appeared on the "Real Housewives" reality show in 2009. Both husband, 43, and wife, 41, face a 39-count indictment that could land them behind bars for 50 years, according to reports.
"The prosecutor has said that if she wants to plead it out she has to do jail time," the source added. "They believe that the evidence will show that Teresa can't play dumb. She was in cahoots with Joe and was just as much a part of orchestrating the scam as he was."
In 2009 the couple filed for bankruptcy claiming over $10 million worth of debt. In an interview just after the filing, Teresa Giudice said on "The View" that she and her husband had run into trouble because tenants living in homes rented out by her husband had failed to pay rent in a downturned economy. The indictment includes conspiracy to commit mail and wire fraud, bank fraud, making false statements on loan applications and bankruptcy fraud.
In addition, Joe Giudice also faces penalties for failing to file tax returns from 2004-2008, making false claims about employments status and salaries. During that time he is alleged to have earned nearly $1 million.
Court documents obtained and published by RadarOnline.com reveal Joe Giudice admitted to forging a mortgage in 2007 which could have led federal investigators to watch his business dealings closely over the past six years.