Amanda Clayton, a Michigan woman who won $1 million from the state lottery last year, was arraigned today in district court on felony charges stemming from an investigation that found she failed to report her lottery winnings and employment status to the Department of Human Services in order to continue receiving public assistance.

Clayton pleaded not guilty to charges of welfare fraud and failure to inform. If convicted, she could face up to four years in prison, according to WJBK Detroit.

Clayton, a 25-year-old woman from Lincoln Park, Mich., won $1 million last September in the state lottery-sponsored game show "Make Me Rich" and chose to receive a lump-sum payout of $700,000 dollars, Detroit station WDIV-TV reported.

Acting on reports in the following months that the woman was still using food stamps to pay for groceries, the station conducted an investigation and discovered that she was receiving $200 a month in food assistance benefits.

"Well, I thought that [the Department of Human Services] would cut me off. But since they didn't, I thought maybe [collecting benefits] was ok because I'm not working," Clayton, who had been receiving food assistance since 2010, told the station.

When asked if she needed the assistance, Clayton told WDIV-TV, "I mean, I kind of do [need the money]. I mean, I have no income and I have bills to pay. I have two houses."

The Michigan Office of Inspector General subsequently launched its own investigation and discovered that Clayton failed to report her lottery winnings to the Department of Human Services, as is required by state law, and also failed to report job earnings from the period prior to her winning the lottery, according to a press release issued today by Michigan Attorney General Bill Schuette.

Clayton allegedly collected a total of $5,475 in food and medical assistance benefits between August 2011 and March 2012, according to the press release.

"It's simply common sense that million dollar lottery winners forfeit their right to public assistance," Schuette said in the release. "We will continue to work with local, state and federal authorities to uphold state laws intended to ensure wise stewardship of taxpayer dollars."

Clayton is being held on $10,000 bond and is scheduled for a court hearing on April 24.

Watch an earlier report on Clayton below: