Did Chrisley Know Justice?

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Did Chrisley Know Justice?

You’ve filed for bankruptcy for yourself and your business. A former employee accuses you of using your investment company to obtain fraudulent loans from banks. You also failed to file tax returns for a number of years. What do you do next? According to the Department of Justice, if you are Todd and Julie Chrisley, you hide in plain sight by starting a reality television series about your family and your purportedly successful real estate business. A jury agreed with the DOJ. They found the Chrisleys guilty of numerous counts including bank fraud, wire fraud, conspiracy and tax evasion.

The prosecution of the Chrisleys raises a number of questions about prosecutorial discretion and sentencing. The overarching concern for criminal justice reformers is to what extent were the Chrisleys prosecuted and punished because of their fame as a result of their reality television show, Chrisley Knows Best? It also pays to look at another former reality television star convicted on similar charges, Teresa Giudice of Real Housewives of New Jersey, who pled guilty in 2014, and ask whether they were treated the same and, if not, why.

Reality Bites the Chrisleys

I will make clear at the outset that I am not a regular viewer of most reality television shows. This is especially so with Chrisley Knows Best and Real Housewives of New Jersey. Nevertheless, the people featured on these shows are just as deserving of justice as folks who are not living in the public eye.

In retrospect, the worst decision Todd and Julie Chrisley could have made was to create a reality television show. While it did provide a lucrative income stream for their family, it also opened them up to massive scrutiny.

Michael Todd Chrisley filed for Chapter 7 personal bankruptcy on Aug. 31, 2012, in the Northern District of Georgia and the Florida Northern Bankruptcy Court (Chrisley goes by his middle name, Todd). A Chapter 7 bankruptcy is a liquidation. This is different than a Chapter 13 personal reorganization.

Eight months later, Chrisley Asset Management, LLC, filed a voluntary Chapter 11 liquidation bankruptcy, also in the Northern District of Georgia. At the time, the Chrisleys were living in Atlanta. The Chapter 11 business bankruptcy was discharged on Nov. 22, 2016, and the personal Chapter 7 was discharged on Aug. 7, 2018. in Georgia. The judge closed the Florida bankruptcy on Mar. 25, 2013, as superseded by the one in Georgia.

A discharge means that the bankruptcy trustee has gathered all assets and discharged all affected debts. In contrast, a dismissal is where the court has ruled that the person cannot get bankruptcy relief. In this situation, the debts are still in effect.

The Show Must Go On!

During the fourth season of the reality show, the Chrisleys moved to Nashville. In an effort to avoid having Todd’s money go into the personal bankruptcy, the Chrisleys set up a number of corporations under Julie’s control. She eventually transferred control over these companies to another, unnamed relative of the Chrisleys. According to the DOJ, this was done to avoid paying taxes.

Moreover, a former employee of Chrisley Asset Management claimed that the couple filed false documents with community banks in Atlanta in order to obtain $36 million in personal loans. The Chrisleys denied these allegations, saying that the former employee was retaliating for getting fired.

The Reality of Charges and Conviction

On Aug. 12, 2019, a federal grand jury in Atlanta issued a multiple-count indictment against Todd and Julie Chrisley, as well as their accountant, Peter Tarantino. All three defendants pled not guilty to the charges. During pre-trial, Judge Eleanor L. Ross dismissed a number of the charges and also suppressed the entry of some evidence on motion from the defendants. Nevertheless, the jury convicted the Chrisleys and Tarantino on all remaining charges after a three-week trial.

The Chrisleys filed for a new trial after the verdict was announced. They claimed that the judge erred by allowing testimony from an IRS agent that the Chrisleys owed taxes to the State of Georgia. They also claimed that the Judge allowed in suppressed evidence that violated the Fourth Amendment. Judge Ross denied this motion, so the Chrisleys and Tarantino appealed the verdict on Dec. 5, 2022. This appeal is still pending.

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The Federal Sentencing Guidelines and the Chrisleys

The US Attorney requested federal Sentencing Guidelines sentences ranging from 210 to 264 months for Todd and 120 to 150 months for Julie. (Federal sentences are often stated in months and not years.) The basis for the guidelines request was the amount allegedly stolen in the fraud and the Chrisleys’ lack of remorse.

Keep in mind that this was the first conviction for either of them. In addition, both Todd and Julie Chrisley had maintained their innocence throughout the trial. Thus, while it may be true that the Chrisleys didn’t show a lack of remorse, it’s not particularly common for innocent people (or people who claim they are innocent, at least) to have no remorse for a crime they didn’t (or claim they didn’t) commit.

In any event, on Nov. 21, 2022, Judge Ross sentenced Todd to 144 months and Julie to 84 months in federal prison. The judge sentenced Tarantino to 36 months. She noted that the Chrisleys never showed remorse. Again, this is an odd thing to consider when dealing with defendants who maintained their innocence throughout trial. Nevertheless, both sentences are downward departures from the Sentencing Guidelines range requested by the DOJ.

The Judge also sentenced all three to three years of supervised release after their time in incarceration. Finally, on Dec. 5, 2022, the Chrisleys received an order of forfeiture and restitution in the amount of $17,270,741.57. This permits the DOJ to begin seizing their assets upon completion of the appeals process.

Not All Reality TV Stars Pay The Trial Penalty

While Chrisley Knows Best was just coming on the air, another celebrity reality television couple was dealing with their own real life criminal justice nightmare. The Real Housewives of New Jersey star Teresa Giudice and her husband Giuseppe seemed to have been engaged in the same misconduct as the accusations leveled against the Chrisleys.

Teresa and Giuseppe had allegedly defrauded a number of banks by filing false loan applications. In addition, they filed a Chapter 7 bankruptcy petition but hid income and assets from the Bankruptcy Trustee. This included the money Teresa made from The Real Housewives show. However, unlike the Chrisleys, the Giudices pled guilty to their crimes.

The Federal Sentencing Guidelines permits up to a three-point reduction in the Offense Level on the Sentencing Table for Acceptance of Responsibility. This can usually reduce a sentence by about two years depending on the nature of the crime and the criminal history category of the defendant.

In general, a defendant qualifies for Acceptance of Responsibility when he or she pled guilty. So, in comparing Todd and Julie Chrisley to Teresa and Giuseppe Giudice, you would expect The Real Housewives star and her husband to receive about two years less than the sentences handed down to the Chrisleys. However, this is not what happened.

On Oct. 2, 2014, New Jersey Federal District Judge Esther Salas sentenced Teresa Giudice 15 months in prison and her husband Giuseppe to 41 months. This is significantly less than the sentences received by the Chrisleys. While it is true that the Chrisleys were convicted of stealing more money, that fact together with the Acceptance of Responsibility should not have resulted in such a disparate sentence for two celebrity couples convicted of the same crimes. This “trial penalty” (or “trial tax”) was significant to the Chrisleys.

Where is the Bankruptcy Trustee?

One of the differences between the Giudices and the Chrisleys is that the Giudices were charged with and pled guilty to bankruptcy fraud, along with the other charges. In fact, the bankruptcy trustee who handled the Giudice Chapter 7 filing played an active part in the prosecution.

However, the DOJ didn’t charge the Chrisleys with bankruptcy fraud. The trustees on Todd’s and the business’s filings didn’t play any role in the criminal case.

Keep in mind that Todd’s personal bankruptcy wasn’t discharged until 2018, a little over a year before the indictment was handed down. This is puzzling because bankruptcy trustees are tasked with retrieving as many assets for the bankruptcy estate as possible. Why weren’t either of the Georgia bankruptcy trustees involved in the Chrisleys’ criminal prosecution?

Image courtesy of Robert E. Casey Jr. v ia Wikimedia Commons.

A Harsh Reality for the Family

Children may be the greatest unintended victim of the criminal justice system. When a parent is incarcerated, a child is deprived of the caring and support. In addition, incarceration of parents disrupts family life. This is certainly the case with the Chrisleys. At the time of sentencing, Todd and Julie are the parents of two 16-year-old and 10-year-old kids. The same situation faced the Giudices, with a 13-year-old, a ten-year-old, an eight-year-old and a five-year-old at the time of sentencing. However, the DOJ and BOP took a very different approach with both families.

The government agreed to let Teresa serve her sentence at the woman’s camp at FCI Danbury while Giuseppe remained free on bond for the sake of the children. After her release from incarceration, Giuseppe began serving his sentence. This meant that the Giudice children had one parent free during this time period. This was not the case with the Chrisleys. Julie is currently serving her sentence at FMC Lexington, a medical camp for men and women. Todd is at FCI Pensacola, a minimum security camp for men. As a result, daughter Savannah Chrisley has taken custody of her two younger siblings.

There is one other interesting wrinkle to the Chrisley case. Under BOP policy, a federal prisoner is not eligible for a minimum security camp unless he or she is within 10 years of their release date. Todd has a 144-month sentence, which means that he should have been sent to a low-security prison, not a camp. However, I highly doubt this is one of the things that Todd Chrisley is currently appealing.

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