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Abby Lee Miller of Dance Moms has been charged with Bankruptcy Fraud


What Is Bankruptcy Fraud?

Bankruptcy Fraud typically happens when a debtor tries to conceal assets to avoid having to forfeit them in a bankruptcy proceeding. Additionally, Bankruptcy Fraud can occur when a debtor intentionally files false or misleading and/or incomplete bankruptcy forms with the Bankruptcy Court.  In the event that Bankruptcy Fraud is suspected a debtor can be charged by Federal Prosecutor with fraud and if proven can be sentenced to prison for five (5) years and/or fined up to $250,000.00.

Abby Lee Miller from Lifetime’s Dance Moms was charged with Bankruptcy Fraud

Apparently in 2010 Ms. Miller filed a bankruptcy to reorganize her dance studio. Usually, these reorganization bankruptcy cases take a few years to work through the Bankruptcy Court. Typically, there is a plan approved by creditors that allows the business to continue with the hopes that the reorganization allows it to get back on better financial footing. As part of the at process, the debtor is required to provide monthly statements to the court and U.S. Trustee showing income and expenses. Based upon the information available, it appears that Ms. Miller is being accused of not providing a full and complete disclosure of income generated by her dance studio. The federal prosecutor is claiming that she hid $755,492.85 from the Bankruptcy Trustee and creditors. To see a copy of the Federal Prosecutor’s statement on this case, click here.

Bankruptcy Fraud, It’s Just Not Worth It!

It is important to remember that Ms. Miller is innocent until proven guilty. From everything I have read, Ms. Miller had a very successful show on Lifetime (I have never seen her show, only commercials). She was clearly making a good income from all of the activities associated with the show. She ran into hard times in 2010 and needed Bankruptcy to save her business. It appears that instead of embracing the opportunity to rebuild her business, she decided to try and game the system.  Now she is facing criminal charges and all of the expenses and embarrassment associated with them. If found guilty she will lose a lot more than she is accused of concealing.  It will be interesting to see if her show survives.

The lesson her situation teaches is that Bankruptcy Fraud is not worth it! 

Are you considering filing for bankruptcy?

If you are considering filing for bankruptcy, it is important that you speak with a bankruptcy attorney who can help you evaluate your potential homestead exemption and issues that may impact your exemption status in bankruptcy. Every bankruptcy case is different, so what has worked for one debtor may not necessarily work for another. If you are in Miami-Dade County or Broward County, Florida, please feel free to contact us to set up a FREE consultation to discuss your specific situation.

This blog post is made available for educational and informational purposes only and to promote a general understanding of the law, and not to provide specific legal advice. Use of this blog does not create an attorney-client relationship. Reading this post is not a substitute for obtaining legal advice based on the unique facts of your situation from an attorney licensed to practice law in your state. No representation is made regarding the current state of the information contained in this post. Examples that may be provided in this post are merely for illustrative purposes; the results in your case may be different and no results are guaranteed.

 

Matthew Mazur, P.A. is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Copyright 2015 Matthew Mazur, P.A.

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