Federal prosecutors in Pittsburgh announced the indictment, charging Miller for hiding income and concealing assets.
During the bankruptcy workout, which lasted three years, Miller was required to report all income and deposit it in a special account to satisfy her creditors, according to court papers.
At the time, she was starring on her “Lifetime reality show, which features pre-teens and young teens training for, and performing in, dance competitions. She also earned money from various sources related to her brand, such as dance lessons, merchandise and clothing sales.
But instead of depositing the money in the special account, she allegedly skimmed $755,492.85 and concealed it in secret accounts.
The income covered a period between 2012 and 2013. Her dance studio emerged from bankruptcy in 2014. All creditors were paid in full, her lawyer said at the time.
Prosecutors took the case before a federal grand jury, which returned 20 counts of fraud. She faces up to five years on each charge. But as a practical matter her jail sentence would likely be limited to no more than five years, according to legal sources.
She also faces up to $5 million in fines, or $250,000 on each count.
Oddly enough, Miller tipped the bankruptcy court to her own deception.
Judge Thomas Agresti, who was overseeing the case, saw her on television advertising her appearances on “Ultimate Dance Competition” and “American Idol.” Miller had not reported any income from those events.
That led to the discovery that large sums of money were not being deposited in the special account. Miller also allegedly made false declarations to the court concerning her income.
At the time of her filing, she claimed assets of about $325,000 against more than $400,000 in debt. Most of the debt involved a $245,000 mortgage and $106,000 leveraged against her dance studio, according to gossip site TMZ.
Miller’s fortunes took a turn for the better when Lifetime created a reality show featuring her studio in 2011. But the show has been a lightning rod for criticism.
Miller has been accused of bullying the children and over-sexualizing them by choreographing provocative dances in skimpy costumes. Supporters say her teaching methods while harsh are acceptable and the dance numbers are typical for young kids.
Some parents circulated a petition asking Lifetime to cancel the show, and many professional dance instructors have criticized her techniques. It’s unknown at the moment, whether Miller’s legal problems will affect the show.
Calls have been place to Lifetime. For the latest developments, be sure to follow IM on Twitter.