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Differences Between Reality TV Star’s Bankruptcy Schedules and Television Persona Reportedly Led to Criminal Investigation and Bankruptcy Fraud Charges

By Guillaume Paumier (Own work) [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia CommonsFederal prosecutors filed bankruptcy fraud charges against a reality television star in October 2015, alleging that she attempted to conceal income from the court during a bankruptcy proceeding. United States v. Miller, No. 2:15-cr-00212, indictment (M.D. Pa., Oct. 13, 2015). The indictment lists a total of 20 counts:  two counts of bankruptcy fraud, five counts of concealing assets, and 13 counts of false declarations. The investigation reportedly began when a bankruptcy judge familiar with the defendant’s case saw her television show and began to doubt her claims. In the age of social media, and the associated climate of over-sharing details of our lives, full disclosure in bankruptcy cases and other legal proceedings takes on an ever greater importance.

When an individual or married couple files for bankruptcy, they must provide the bankruptcy court with a detailed accounting of their assets, debts, and income. The debtor presents this information on “schedules,” using forms provided by the court. Federal criminal law prohibits debtors from concealing assets from the court or the trustee, intentionally or knowingly failing to disclose material information to the court or trustee, making false statements, and a wide range of other fraudulent or deceptive acts. 18 U.S.C. § 152. A debtor who makes a false statement in the course of a bankruptcy proceeding may also be subject to prosecution for bankruptcy fraud. 18 U.S.C. § 157. A conviction under either statute can result in imprisonment for up to five years.

The defendant owns and operates a dance company in Pittsburgh, Pennsylvania, which is the subject of the reality television show “Dance Moms” on the Lifetime network. She also appears on a spin-off program on Lifetime, and she has other business ventures related to her dance studio. She filed a bankruptcy petition in the Western District of Pennsylvania in December 2010. According to the indictment, the defendant identified over $350,000 in liabilities and more than $325,000 in the schedules to her bankruptcy petition, and she claimed a monthly self-employment income of $8,899. She received a discharge of debts in December 2013. An investigation, however, was reportedly already underway by then.

The Associated Press reported that, in December 2012, “a channel-surfing bankruptcy judge” saw the defendant on television. The judge reportedly “figured she had to be making more than the $8,899 in monthly income she was claiming” and requested an investigation. The FBI and other federal agencies conducted an investigation that led to the current charges. Prosecutors claim that, during her bankruptcy case, the defendant concealed more than $775,000 in income from television appearances, personal appearances, dance studio revenue, and the sale of merchandise based on her television persona. The defendant has entered a plea of not guilty.

Devin Sawdayi, a Los Angeles bankruptcy lawyer, has represented individuals and families in Chapter 7 and Chapter 13 bankruptcy cases since 1997. We help our clients repair and rebuild their finances with dignity and respect. To schedule a free and confidential consultation with an experienced and skilled financial advocate, contact us today online or at (310) 475-939.

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Photo credit: By Guillaume Paumier (Own work) [CC BY 3.0], via Wikimedia Commons.