2016: Abby Lee Miller Facing 20-Count Bankruptcy Fraud Charges

Abby Lee Miller
••• Lifetime

As of July 2017, Abby Lee Miller is serving her jail sentence at the Victorville Federal Correctional Institution.

What Happened?

In 2010 Abby Lee Miller filed for Chapter 11 bankruptcy to reorganize her dance studio. Miller claimed to be more than $400,000 in debt at the time. According to TMZ, Miller paid off these debts in full on 12/31/2013. However, Miller is still facing twenty counts of criminal charges for bankruptcy fraud.

Abby Lee Miller, star of Lifetime's hit reality show, is no stranger to controversy or legal troubles. Although she may be best known for her vitriol, lack of acceptable social filters, and over-the-top level of anger she freely expresses to young and old alike, she might soon be also known as the latest celebrity to be found guilty of financial wrongdoings.

You can hate her or love her, but you cannot deny that her larger-than-life personality has served her well, at least in business, and she is now facing criminal charges based on allegations because she (allegedly) denied some of her financial success.

Miller was first suspected of hiding assets when a bankruptcy judge happened to be flipping through television channels and saw her on tv and began to wonder about her income. This lead to ​the discovery that Miller had hidden income earned from Dance Moms, merchandise sales, and income from her dance studios.

What Crime Was Abby Lee Miller Charged With?

In 2010, Miller filed for Chapter 11 bankruptcy to reorganize her dance company and claimed to be more than $400,000 in debt. She did not disclose income earned in subsequent years (2012 and 2013) as she continued to seek discharge of her debts.

On October 13, 2015, a federal grand jury in Pittsburgh indicted her on charges of bankruptcy fraud, concealment of assets, and false bankruptcy declarations. Miller has now been charged with 20 counts of bankruptcy-related fraud charges including that she:

  • Maintained a secret bank account to hide more than $755,000 of her income
  • Hid income from her shows
  • Instructed her production company to pay her mother for each episode to hide some of her income

Bankruptcy matters are criminal matters; if Miller is found guilty she will have to pay fines, could be sentenced to jail, and she will have a criminal record.

Potential Jail Time and Millions in Fines

Miller is facing serious criminal charges for bankruptcy fraud. If convicted, she could be sentenced to up to five years in prison and be subject to a $250k fine for each count she is found guilty, which could total more than $5 million in fines.

On November 2, 2015, Miller pleaded not guilty to all charges. As of this article date no trial date had been set yet.

Will She Go to Jail?

If Miller is found guilty on any of the charges she faces it is very likely that she will spend at least some time in jail.

Being a celebrity does not grant you immunity from prosecution, nor from the legal consequences if found guilty. In 2004 Martha Stewart was sentenced for insider trading and served 5 months in prison, an additional five months on house arrest, and was on probation for two years.

In 2010, Wesley Snipes began serving a three-year sentence for income tax evasion. He served most of his time in prison and finished his sentence on house arrest.

Miller's vitriol may have contributed to her stardom on her show, but it may come back to haunt her in court. Investigators uncovered emails between herself, a partner, and their accountant that seems to indicate she knew she was breaking the law. In one email (Reuters), Miller is alleged to have put in the subject header "Let,s Make Money and Keep Me Out of Jail." A second email contained instructions not to put cash into her bank accounts.

If a judge believes she knowingly attempted to defraud the bankruptcy court he may decide to be a little less lenient.

Past Legal Troubles

In 2015, both Miller and Collins Ave Entertainment (the company that produces the dance moms series and its spin-offs) settled a $5 million civil lawsuit filed by Kelly Hyland. During the filming of an episode of Dance Moms, Hyland and Miller got into an argument that escalated into assault when Hyland slapped Miller in the face. Miller called the police after the show had sent Hyland packing on a plane.

According to one source, there was a reason for the drama: 

After the fight was over Kelly states producers intentionally drove her away and put her on a plane "knowing police would issue a warrant for her arrest … and thereby create a juicy story line."

Hyland turned around and filed a lawsuit stating she was bullied into overreacting and that both Miller personally, and her show, distorted reality to make Hyland look like a drunk, unfit mother, and difficult woman. The lawsuit sought emotional damages for Hyland's daughter, which the judge said were unfounded. Hyland was arrested, Abby Lee obtained a no-contact order, but no criminal charges were filed against Hyland.

The suit also claimed that Hyland was in a lifetime contract obligation to Miller so that she was not able to quit the show.

Hyland dropped the lawsuit after a settlement was reached in which Collins Ave Entertainment agreed to pay $17,500 to replace Hyland's wood floors, which she asserted had been damaged by the film crew.