Dance Moms' Abby Lee Miller 'hid $775,000 worth of show income during bankruptcy'

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Miller is accused of hiding income from TV appearances and merchandise
Reality star filed for bankruptcy in 2010 but 'didn't declare all her earnings'
She could face up to five years in jail and a $5million fine if she is convicted
Miller shot to fame on Dance Moms for her controversial teaching methods

Published: 12:56 EST, 14 October 2015 | Updated: 14:44 EST, 14 October 2015

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Dance Moms star Abby Lee Miller has been accused of hiding $775,000 worth of income from her show and TV appearances during her bankruptcy.

Miller, who is known for her outrageous personality and controversial teaching methods on the reality show, faces 20 counts of bankruptcy fraud, concealing assets and making false bankruptcy declarations.

If convicted, she could face five years in jail and up to a $5million fine.

The 50-year-old, formerly of Penn Hills, filed for bankruptcy in December 2010 which lasted for three years. During that time, prosecutors claim she hid income from her TV appearances, dance classes and merchandise sales.

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Dance Moms star Abby Lee Miller has been accused of hiding $775,000 worth of show income during her bankruptcy

The fraud only came to light after the bankruptcy judge spotted Miller on TV.

Dance Moms, which follows Miller as a competitive dance teacher at her Abby Lee Dance Company in Pittsburgh, began airing in 2011 on the Lifetime channel.

At the same time, she set up other bank accounts to hide hundreds of thousands of dollars coming in from the show and its various spin-off appearances, prosecutors say.

She also instructed others to conceal certain income from the bankruptcy court and made numerous false declarations, the indictment alleges.

According to the indictment, this allowed Miller to gain 'favorable terms to restructure her debts' by concealing the income.

Miller, who is known for her outrageous personality and controversial teaching methods on the reality show (pictured), faces 20 counts of bankruptcy fraud, concealing assets and making false bankruptcy declarations

In her original bankruptcy plan, the reality star had admitted she receiving partial income from the reality show but claimed she never had a contract. Prosecutors now claim this was false.

A federal bankruptcy judge had been ready to approve the plan when he spotted Miller while channel surfing one evening.

Judge Thomas Agresti saw Miller's Ultimate Dance Competition, as well as her appearance on American Idol and her teaser ad for the third season of Dance Moms.

Prosecutors say that none of the contracts for the shows had appeared in the bankruptcy plan.

The judge called a new hearing in February 2013 where he urged Miller to disclose all her earnings. But Miller continued to hide income, prosecutors said.

'Criminal prosecution is appropriate when debtors corrupt the bankruptcy process through deceit and lies before the court,' said U.S. Attorney Hickton in a statement.

'Federal bankruptcy proceedings can be a lifesaver for honest individuals overwhelmed by debt resulting from any number of legitimate reasons, but allegations of fraud and abuse threaten the integrity of the bankruptcy process and the public's trust in it,' added Special Agent in Charge Scott S. Smith of the FBI's Pittsburgh Division.

Her star student, 13-year-old Maddie Ziegler (pictured left with Miller and her sister Mackenzie) has found worldwide fame thanks to her emotional performance in Aussie singer Sia's Chandelier music video

Dance Moms, which follows Miller as a competitive dance teacher at her Abby Lee Dance Company in Pittsburgh, began airing in 2011 on the Lifetime channel

Miller claims she has been coaching children to dance since she founded her dance company when she as just 14.

Her star student, 13-year-old Maddie Ziegler, has found worldwide fame thanks to her emotional performance in Aussie singer Sia's Chandelier music video.

Abby's teaching methods are famously strict, with moments on the series showing her telling crying students, 'No tears. You save those tears for your pillow, in your room, alone. You're going to humiliate yourself in front of everyone in this dressing room. Do not cry. Suck it up, kid.'

She's also famed for her, 'everyone's replaceable' attitude to her students, and her belief that winning is everything and achieving a second place spot means you are 'the first one to lose'.

The longtime choreographer previously told In Touch Weekly that it is necessary to be strict with her girls because 'their moms aren't'.

Addressing critics who have branded her a bully and 'number one villain', Miss Miller simply says that she wants her students to achieve their full potential.

'I have bigger dreams for these kids than they have for themselves. I want them to be better - I want them to win... Life is a competition,' she explained.

But her notoriously tough and often controversial techniques has seen her clash with the young dancers' demanding mothers.

Last year she was hit with a $5 million lawsuit by former cast member Kelly Hyland, who's accused the coach of lunging at her, 'gnashing her teeth loudly' and 'attempting to bite' face at a rehearsal.

The lawsuit was filed after Kelly was charged with assault, and was ordered to stay away from Abby after she was filmed fighting with her.