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 Dance Moms.
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 positivity of 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.