TV reality show star might avoid any prison sentence
Abby Lee Miller has repaid all creditors
The federal government on Friday began its attempt to convince a judge that “Dance Moms” TV star Abby Lee Miller should go to prison for concealing assets from bankruptcy and smuggling bulk cash into the United States.
Ms. Miller, who pleaded guilty last year, is arguing for probation, but the U.S. Attorney’s office wants a prison term in the guideline range of 24 to 30 months.
The prosecution’s job is going to be difficult.
In tentative findings filed before the hearing, U.S. District Judge Joy Flowers Conti sided with the defense position that Ms. Miller deserves probation because no creditors actually lost money after the fraud was uncovered.
The hearing is being conducted over two days, with the government’s turn Friday and the defense argument Feb. 24.
The judge will make a ruling
after that.
The central debate is whether Ms. Miller meant to harm her creditors to whom she owed money. She has paid them back, but the U.S. Attorney’s office says it was her intent that counts.
Assistant U.S. Attorney Greg Melucci said she clearly meant to harm creditors by taking deliberate steps to hide about $775,000 from her TV contracts, her dance seminars and other sources of revenue.
Ms. Miller filed for bankruptcy in 2010 after defaulting on mortgages on her Florida condo and her Penn Hills dance studio. She proposed a plan to pay her debts over six years.
But then her reality TV show and related businesses took off in 2011 and 2012. According to the prosecution, she didn’t disclose income from the show or from other sources that capitalized on her fame, such as her “master class” seminars and personal appearances across the U.S. and overseas.
The main witness Friday morning was Larry Wahlquist, a lawyer for the Office of the U.S. Trustee, who pored over financial disclosures from Ms. Miller’s Chapter 11 bankruptcy filings showing that she did not reveal income from her TV contracts with the A&E network.
He said the U.S. bankruptcy judge handling the case, Thomas Agresti, discovered the fraud when he was watching TV one night, saw an ad for “Dance Moms” and realized Ms. Miller had a lot more money than she was declaring.
“Judge Agresti was obviously very upset,” said Mr. Wahlquist.
Mr. Wahlquist eventually referred the case to the U.S. Attorney’s office, which brought an indictment in 2015.
“The entire Chapter 11 system is built on full disclosure,” he said.
The lead FBI agent on the case, Sean Langford, took the stand in the afternoon and gave a detailed accounting of Ms. Miller’s income streams from various sources, including TV contracts, master class dance events, her studio and merchandise sold at the studio and a website she ran with a partner in Louisiana.
For the most part, he said, Ms. Miller disclosed income connected to the Penn Hills dance studio but hid the other revenue sources.