February 20, 2017
The star of “Dance Moms,” Abby Lee Miller, has much more trouble on her hands than dealing with the ultra-competitive moms and talented dance students on her hit reality television show. In June of 2016 in federal court, Miller pleaded guilty to bankruptcy fraud. Her sentencing hearing began on January 20 and will continue on February 24, after which U.S. District Judge Joy Flowers Conti will make her decision.
Assistant U.S. Attorney Gregory Melucci is pushing for a 2 to 2 ½ years prison sentence rather than merely probation. Although the defense argued that no creditors suffered financial loss when the bankruptcy fraud was exposed, under the law, the amount of money involved merits a prison sentence. Melucci contended that the only reason Miller hid her earnings was so that she did not have to repay the full amount of what she owed.
After defaulting on two mortgages, one a $245,000 condominium in Florida and another a $96,000 dance studio outside of Pittsburgh, Miller filed for bankruptcy. She included various additional debts totaling almost $60,000, among which were her unpaid property taxes. Miller requested the Chapter 11 bankruptcy court to allow her to pay back only a portion of her condominium loan, $150,000, at a lesser interest rate. She even proposed to give back the property and pay nothing. Miller agreed to fully repay her other debts, but wanted zero or lower interest rates. After discovering the fraud, Miller received an order from a very angry bankruptcy judge to pay back everything she owed.
According to Chapter 11 bankruptcy laws, Miller should have fully and honestly disclosed all income and assets, but she concealed her real earnings throughout the proceedings and never revealed information about television contracts for future income. Her deceitfulness was exposed when the bankruptcy judge happened to be flipping through the channels and discovered Miller’s reality TV show. After further investigation, Bankruptcy Trustee Larry Wahlquist testified about her true income and non-approved bank accounts.
Miller’s attorneys will not comment until the February 24th hearing, at which time they will call their witnesses.
If you are considering filing a Chapter 11 bankruptcy, you will need to follow federal laws and regulations or risk prosecution for defrauding the court. Our legal team can help you navigate through filing a bankruptcy.
