She refused to accept any jail time and thought the DA was bluffing.
"[The prosecutors] are saying that the only way anyone's going to escape jail time is if they go to trial and are found not guilty", the source told PEOPLE.
Loughlin and Giannulli are accused of paying 500,000 dollars in bribes to get their daughters into the University of Southern California as crew team recruits, even though neither of them played the sport.
As a result, Isabella and Olivia's status at the university is under investigation as officials determine the next course of action, and therefore their fate at the institution.
The source goes on to emphasize that Lori didn't understand how serious her actions were.
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The news comes weeks after the network's parent company Crown Media cut all ties with the personality due to her ongoing legal trouble. "At this point she is getting complete clarity and she's scared and in bad shape". "It was absolutely a status thing". The charge of conspiracy to commit money laundering provides for a maximum sentence of 20 years in prison, three years of supervised release, and a fine of $500,000 or twice the value of the property involved in the money laundering.
The superseding indictment unsealed last week charges that the couple and 14 other parents conspired to "conceal their fraud scheme by funneling bribe and other payments through the facade" of the Key Worldwide Foundation, a sham charity established by William "Rick" Singer, who federal prosecutors identified as the ringleader of the nationwide scam.
Several other parents who were indicted alongside Loughlin and Giannulli last week have also filed court documents entering not guilty pleas. Huffman is scheduled to show up at the national court on May 24 of Boston to plead guilty.
Loughlin, her husband and 19 other parents who have not admitted guilt in the scheme were hit with the additional charge. Yes, she can think about the public perception of her, but that's nothing compared to what her daughters think of her. This transgression toward the people I will proceed for the rest of my life.
'My desire to help my daughter is no excuse to break the law or engage in dishonesty'.