Amanda Clayton, 25, of Lincoln Park was arrested on Monday. If convicted of the two felony charges, she could face up to four years in prison.
"It's simply common sense that million dollar lottery winners forfeit their right to public assistance," Attorney General Bill Schuette said in a statement Tuesday. "We will continue to work with local, state and federal authorities to uphold state laws intended to ensure wise stewardship of taxpayer dollars."
Clayton stood silently during her arraignment at Lincoln Park's 25th District Court. Defense lawyer Stanley Wise said he hopes to have charges dismissed at her next court hearing April 24. He didn't elaborate.
"She's upset but she'll be fine," Wise said.
Clayton chose a $700,000 lump sum, before taxes, last fall after winning the jackpot on "Make Me Rich!" a Michigan lottery game show.
The case came to light last month. She told Detroit TV station WDIV at the time that she thought it might have been OK to keep using food stamps because she wasn't working.
The state Department of Human Services has said it was Clayton's responsibility to report her dramatic change in wealth within 10 days. She was dropped from the food program.
Clayton wasn't the first Michigan lottery winner to keep public benefits. Last spring, a TV station reported that Leroy Fick, 60, of Bay County, was using the food program despite winning an $850,000 lump sum prize in 2010. He told state officials about his wealth but was allowed to temporarily keep his card because lump-sum windfalls at that time were not counted as regular income under the program.
The state has since banned anyone with assets of more than $5,000, excluding a car, from the food stamp program. That ban knocked Fick off the rolls.