"Dance Moms" star Abigale Lee Miller has pleaded not guilty to charges that she tried to hide $775,000 worth of income from the Lifetime network reality show and spinoff projects during her Chapter 11 bankruptcy.
The 50-year-old reality TV star was free on bond after Monday afternoon's federal court appearance in Pittsburgh. Miller can travel for the show if needed, but must check with the court before traveling out of the country. Her attorneys and prosecutors told the judge they expect a trial to last more than two weeks. It has yet to be scheduled.
The investigation began when a channel-surfing bankruptcy judge saw Miller on TV in December 2012 and figured she had to be making more than the $8,899 in monthly income she was claiming.
Once the FBI and other federal investigators got involved, they determined Miller hid more than $228,000 in income from appearances on "Dance Moms" and a spin-off, "Abby's Ultimate Dance Competition" and nearly $550,000 more from personal appearances, dance sessions and merchandise sold through her website, www.abbyleedancecompany.com .
Miller continued hawking her wares as she entered the federal courthouse downtown, smiling and telling reporters that jackets from Season 6 of "Dance Moms" go on sale Wednesday.
Miller is known for her outspoken, brash behavior and pursuit of perfectionism from her students. Critics of "Dance Moms" accuse Miller of being emotionally abusive, and many episodes show her students in tears.
Miller, wearing a black top with gold-colored buttons, black slacks and matching flats, couldn't resist commenting as she left the arraignment — despite her attorney's advice.
"Let's hope they get the numbers of the expenses that went out," Miller said, referring to federal investigators. The comment suggested that the income she's accused of hiding was offset by business expenses.
Whether that's true or not may not matter under the law.
That's because when someone files for Chapter 11 bankruptcy protection, the court can order creditors to accept less than they're owed or otherwise agree to more lenient repayment terms. That court-imposed protection comes with the requirement that the debtor — in this case, Miller — honestly and fully discloses their income.
If they don't, it's a crime.
Miller is charged with two counts of bankruptcy fraud, five counts of concealing bankruptcy assets and 13 counts of making false bankruptcy declarations. Each of the 20 counts carries up to five years in prison, and a total of $5 million in fines are possible if she is convicted of every count.
According to the indictment, Miller filed for Chapter 11 bankruptcy protection in 2010 claiming debts of more than $356,000, including a $200,000 mortgage on a Florida home and a $96,000 mortgage on her dance studio in Penn Hills, the Pittsburgh suburb where the reality show is based.
Miller received more favorable mortgage terms after filing Chapter 11, and that's why the alleged hiding of her income is a crime.
Miller didn't appear to be hiding her income in court. She was wearing a large watch, a showy gold-colored bracelet that ran several inches up her forearm, and several rings.
Defense attorney Robert Ridge declined to comment on the charges and wouldn't say whether the items Miller wore were costume jewelry or real gold.
"The last thing I'm going to do is comment on a woman's jewelry," Ridge said.