(CN) --- “The Real Housewives of Salt Lake City” star Jen Shah pleaded not guilty Friday to federal wire fraud and money laundering charges connected to a nationwide telemarketing scheme that bilked millions from hundreds of victims.
Authorities arrested Shah, 47, and her assistant Stuart Smith, 43, Tuesday after the unsealing of an indictment filed by federal prosecutors in the Southern District of New York.
Prosecutors say Shah and Smith sold hundreds of victims, many of whom were over 55 years old, “business services” related to “the victims’ purported online businesses.”
The indictment details a “widespread, coordinated effort to traffic in lists of potential victims, or ‘leads,’ many of whom had previously made an initial investment to create an online business with other participants.”
The duo, who live in Salt Lake City, appeared virtually Friday in New York before U.S. District Judge Sidney H. Stein.
Shah and Smith were originally to be arraigned Wednesday afternoon, but Stein rescheduled the virtual hearing after it was plagued by unmuted participants gossiping about Shah and Bravo’s “Real Housewives” franchise, blaring TV sets, crying babies and technical difficulties getting Shah on the line. The Covid-19 pandemic has forced most courts to move their hearings into the virtual realm to limit bodies in courtrooms.
Friday’s hearing got off to another rocky start as Stein and attorneys tried to mitigate an echo plaguing their conversations.
“Everyone has to mute their microphones except for the person speaking,” Stein repeatedly reminded the participants throughout the 90-minute arraignment.
After Shah and Smith entered their not guilty pleas, the hearing took a testy tone as to the matter of Shah’s bail conditions.
The government's attorney Kiersten Fletcher asked Stein to require Shah to sign a $1 million recognizance bond secured by $250,000 in cash or property co-signed by two financially responsible persons.
One of Shah’s attorneys, Henry Asbill of Buckley LLP, said he had no objections to the bond amount but didn’t think additional cash or property was necessary.
“Does she own her home or any other property?” Stein asked.
Asbill said she rents a house with her husband, an assistant football coach at the University of Utah, but was unaware of any other property.
Daniel Alonso, another Shah attorney from Buckley LLP, argued the pretrial services report did not recommend that she put up property as a bail condition.
“There really is no showing why anyone should put up property,” Alonso said, pointing out that she was a “low risk of flight.”
Stein initially seemed inclined to agree with Shah’s attorneys.
“Ms. Shah is a participant in a popular TV show, her image is active on social media,” Stein said. “I must say it is unlikely that she could disappear and not be located.”
Fletcher countered, claiming Shah did not disclose any information about her assets and her income in her pretrial services interview.
“The defendants are really at the highest level of the scheme,” Fletcher said. “Smith and Shah have incorporated multiple shell companies to receive the proceeds of the telemarketing scheme.”
One of these companies, Mastery Pro Group, has received no less than $5 million in criminal proceeds, Fletcher told the court, noting that when federal agents searched Shah’s house they found debit cards associated with these companies.
The Mastery Pro Group account, Fletcher said, “contained a large number of cash withdrawals, the location of which is unknown to the government.”
“Speak to my comment of risk of flight,” Stein directed.
Fletcher said it was unclear to the federal government whether Shah “will remain a public figure and will remain visible in the public eye.” She did acknowledge the government has possession of Shah’s passport, which was expired.
“This is a crime that carries a very, very significant potential penalty,” she added. If convicted, Shah and Smith face up to 50 years in prison.
“Are you aware of her ownership of other companies?” Stein asked. “The financial disclosure at least obtained by the District of Utah lists as assets simply checking and saving accounts of an amount that she stated was unknown.”
Stein said Shah disclosed a net worth of $0 to pretrial services, adding, “Looks like a highly unreliable financial statement."
Asbill said a number of financial records were seized from Shah's house that would help her be more accurate.
“Does she receive a salary from any of her businesses, including the ‘Real Housewives’ franchise?” Stein asked.
Clayton Simms, Shah’s attorney in Utah, said she doesn’t make a salary, but she does make money.
“She is an entrepreneur and has several businesses and does make some money from the show," Simms said.
That was enough for Stein to make his decision.
“I do think there is a risk of flight here,” he said and ordered Shah to sign a $1 million recognizance bond, secured by $250,000 in cash or property and co-signed by two financially responsible persons.
He also ordered her to surrender any travel documents, limited her travel between Utah, New York and Washington for court or to meet with her attorneys, and required her to continue her mental health treatment and treatment at the Lionrock, an online drug and alcohol rehab.
The trial is currently set for Oct. 18.
Follow @jamierossCNS
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