'Dance Moms' star Abby Lee Miller indicted on fraud charges
October 15, 2015 9:57 AM
The judge was about to approve her bankruptcy reorganization plan two years ago when he was clicking through the channels one night and saw Abby Lee Miller’s “Abby’s Ultimate Dance Competition,” ads for “The Maniac is Back” and her appearance on “American Idol.”
Abby Lee Miller
Federal agents say Abby Lee Miller created bank accounts to hide income and instructed others to conceal income.
"Dance Moms" star Abby Lee Miller gives her dance students some instruction on the Lifetime reality show.
By Torsten Ove / Pittsburgh Post-Gazette
“Dance Moms” TV star Abby Lee Miller, charged Tuesday with bankruptcy fraud in concealing income from the show, was exposed by a channel-surfing bankruptcy judge, according to her indictment.
Judge Thomas Agresti was about to approve her bankruptcy reorganization plan two years ago when he chanced upon her performances on national TV and realized she had lucrative contracts she wasn't telling anyone about.
He was clicking through the channels one night and saw Ms. Miller’s “Abby’s Ultimate Dance Competition,” ads for “The Maniac is Back” and her appearance on “American Idol.”
“I realized that there’s an awful lot of money coming into this plan, this case,” the judge said during a 2013 hearing, “and it hasn’t been disclosed.”
Law enforcement thought so, too, and now Ms. Miller, 50, formerly of Penn Hills, is under indictment.
A grand jury on Tuesday charged her with 20 counts of bankruptcy fraud, concealing assets and making false bankruptcy declarations following an investigation by the FBI, IRS and postal inspectors.
Agents said she hid some $755,000 she received in 2012 and 2013.
Ms. Miller, owner of Abby Lee Dance Co., filed for bankruptcy in 2010.
The indictment says that after she reorganized the business, she schemed to defraud the bankruptcy court by hiding her income from the “Dance Moms” show and related spinoffs, as well as from dance instruction sessions and merchandise sales from her website.
Federal agents said she created bank accounts to hide her income and instructed others to conceal income.
In her reorganization plan, Ms. Miller identified herself as the owner of four businesses: the Abby Lee Dance Co., Maryen Lorraine Dance Studio, The Dressing Room and the Tight Spot. She declared liabilities of $356,000, including a $92,000 mortgage on the dance studio and a $200,000 mortgage on a home in Florida, as well as taxes owed to the Penn Hills School District and Allegheny County of about $60,000. She said her assets totaled $325,000 and her income was about $8,000 a month.
In the reorganization plan, she said in 2012 that she would receive some income from her TV show but indicated she did not have a contract for the show from the producer, Collins Avenue Entertainment.
Judge Agresti approved her disclosure statement and set a hearing for Dec. 20, 2012, to discharge the bankruptcy case. But a week before that date, the judge canceled the hearing and ordered her to disclose any contracts.
The following month, Ms. Miller suddenly produced $288,000 in income from Collins Avenue, according to the indictment.
That led to the testy exchange in February between Judge Agresti and Ms. Miller's bankruptcy lawyer, Donald Calaiaro, in which the judge noted the sudden appearance of the $288,000 and that he’d seen Ms. Miller on TV.
Mr. Calaiaro told the judge that he was unaware of any contracts and had previously been unaware of the $288,000 until Ms. Miller deposited it into his escrow account.
At one point, Ms. Miller said “I didn't even know about them” in regard to the contracts, the indictment said.
“The problem here is that it looks to the court that she was hiding the ball,” the judge said at the time, “and until she got caught we wouldn’t have known about this.”
Mr. Calaiaro didn’t respond to a message. Ms. Miller’s criminal lawyer, Robert Ridge, said she declared bankruptcy to save her family-owned business and has repaid all of what she owed.
“There is no loss to any of her creditors,” he said. “We will review the indictment and respond appropriately. Abby Lee is currently shooting Season 6 of ‘Dance Moms’ and continues to share her love of dance with children around the world.”
She will be arraigned here Nov. 5.
“Dance Moms” debuted on Lifetime in 2011 and chronicles competitive young dancers as well as the conflicts between their mothers and Ms. Miller. The fifth season has taken the show to Los Angeles, where Ms. Miller created a new studio.
Torsten Ove: firstname.lastname@example.org or 412-263-1504.