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Another celebrity goes to jail for bankruptcy fraud

| Jul 20, 2017 | Bankruptcy, Bankruptcy |

Bankruptcy fraud is no laughing matter, even though certain celebrities have lately treated the court’s rules like a joke — at least until they were caught. The latest celebrity to land in jail over the issue is Abby Lee Miller, the owner of the dance school featured in TV’s Dance Moms.

On July 12, 2017, Miller reported to jail in California after her request to complete her sentence in the federal prison nearest her home was granted. Her jail term for trying to pull a few fancy steps in court is for a year and a day, though she likely has hopes for an early release. The reality star was reportedly fearful about what the next year held for her.

She should probably count herself lucky. Bankruptcy fraud is considered a federal crime, and the potential maximum sentence is a full five years — per charge. Those convicted also face a possible fine per charge of $5,000.

Miller admitted guilt to one count of concealing bankruptcy assets for trying to hide more than $700,000 in income that she earned by staring in the Lifetime show that featured her dance school. She also admitted guilt to an additional charge of fraud involving international monetary transactions for trying to hide $120,000 in foreign currency she brought into the country.

In addition to her jail sentence, the celebrity was handed a $40,000 fine for both crimes together and required to forfeit the foreign currency. Like other felons, she will also have to submit her DNA to the national registry of offenders.

Cases like these are often used as an example to warn other debtors about the seriousness of bankruptcy fraud and the need to be completely open about their finances with the court. Bankruptcy is intended to be a refuge for debtors who are in over their heads — not a way to hide assets from creditors and preserve wealth.

Don’t make a similar mistake if you find yourself in a position where you need to file bankruptcy. If you have any questions about what else might be considered bankruptcy fraud, talk to an attorney today.

Source: PeopleCelebrity, “Abby Lee Miller Reports to Prison Where She Will Serve a 366-Day Sentence for Bankruptcy Fraud,” Christina Dugan, July 12, 2017

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