Abby Lee Miller, known for her role on the reality television show
Dance Moms, was sentenced to federal prison earlier this month after pleading guilty
to bankruptcy fraud charges last year. Her sentence includes a one year
prison term and two years of supervised release. She was also fined $40,000
by a federal judge and ordered to pay a $120,000 judgment.
The dance instructor’s case began in October of 2015, when she was
formally indicted on 20 counts of fraud in connection to hiding assets
earned from her role on the reality series from the bankruptcy court.
In addition to bankruptcy fraud, the charges also included false bankruptcy
declarations, and concealing of bankruptcy assets, among others. During
her indictment, prosecuting attorneys announced that the criminal prosecution,
which posed up to 5 years in prison, was an appropriate response to individuals
who choose to corrupt and abuse the bankruptcy process through willful deceit.
Federal investigators were initially tipped off when the judge who presided
over Miller’s bankruptcy case saw her on
Dance Moms and grew suspicious about where that income was. Ultimately, it was discovered
that Miller orchestrated an elaborate operation of secret bank accounts
following a Chapter 11 bankruptcy filing in 2010 over her dance studio
that allowed her to conceal close to $800,000 in income. She was also
accused of smuggling over $100,000 in Australian currency into the U.S.
without declaring it. Her actions, the government alleged, were a willful
scheme to conceal income she earned from
Miller’s case is a clear example of the consequences individuals
can face when they attempt to conceal assets during bankruptcy. The U.S.
government created the bankruptcy code in order to help “honest
but unfortunate” consumers in need of a fresh financial start. When
filers attempt to abuse the process in order to benefit from its protections,
including a debt discharge, they can be held fully accountable in criminal
court. Not only can this result in significant penalties, such as a felony
conviction and substantial time in a federal prison, it can also subject
offenders to hefty fines and judgments.
At the Law Office of Robert W. Kovacs, Jr., we believe in the power and
bankruptcy law, as we have helped many hard-working men and women find solid financial
ground when debt and financial difficulties made them feel as though little
hope was in sight. From our experience, we know that with proper counsel,
support, and representation, as well as honesty, individuals facing insurmountable
debt can effectively navigate their legal journeys and obtain the benefits
they need to find a brighter financial future.
If you have questions about bankruptcy and which to speak with a Worcester
bankruptcy attorney about your situation, rights and options, contact
us for a FREE case evaluation.