Prosecutors allege that Arvizo, 37, had fraudulently received more than $18,000 in government benefits after failing to disclose in her welfare application that she and her children had recently been paid $70,000 to resolve a civil lawsuit.
The new allegations mark an unusual turn in the story, with Jackson, who was acquitted in June, now free of charges, and Arvizo facing a possible sentence of more than seven years in prison.
Defense attorney Thomas A. Mesereau Jr., who represented Jackson in the molestation case, said the allegations against Arvizo are further evidence that the Santa Barbara County jury returned the correct verdict.
"This helps confirm what we were saying through the trial, which was the accuser and his family lacked credibility and that the charges were false," Mesereau said. "It was a disgrace for the prosecutor to go forward with this case against Michael Jackson."
Santa Barbara County Dist. Atty. Tom Sneddon, who prosecuted the molestation case, did not return a call to his office Tuesday.
William Dickerman, a Los Angeles attorney who previously represented the Arvizo family, said the family's top priority had been to hold Jackson accountable in criminal court for allegedly molesting Arvizo's son.
"It is a cruel irony that while Jackson is free as a bird and unaccountable for his conduct, she, with no resources, will relentlessly be ground up by [the criminal justice] system," Dickerman said.
"It's unfortunate that the rich and famous can buy attorneys to twist and obfuscate the facts and that the less fortunate of us can't."
Sandi Gibbons, a spokeswoman for the Los Angeles County district attorney's office, said the felony charges against Arvizo were appropriate based on the evidence uncovered during the investigation.
"Any time someone lies to falsely obtain aid out of hard-earned taxpayers' money, that's wrong," Gibbons said. "I don't care if it's a nickel. You can't use the welfare system as your own personal piggy bank."
A young man who answered the door at the Arvizo family's home in Los Alamitos said Arvizo did not want to discuss the new allegations. Arvizo, who was not arrested, was ordered to appear in court Sept. 7 for arraignment on four perjury charges and one count of welfare fraud.
Jackson was accused of molesting Arvizo's son, a 13-year-old cancer survivor, at his Neverland ranch in the Santa Ynez Valley in 2003. Los Angeles prosecutors learned of Arvizo's alleged fraud in January, shortly before jury selection began in the molestation case, when a lawyer hired by Jackson, Carl A. "Tony" Capozzola of Redondo Beach, sent them a package of evidence, including her welfare application and records of the civil lawsuit award.
During the trial, defense attorney Mesereau portrayed the woman as a money-hungry grifter who persuaded her son to falsely accuse Jackson in order to help the family win a potentially lucrative civil lawsuit.
Mesereau said Tuesday that he was not involved in the request to prosecute Arvizo. Brian Oxman, another Jackson lawyer, said the pop star's family feels vindicated by the charges.
"It shows this family was defrauding him, just like they defrauded the welfare system," Oxman said.
Jamie Masada, owner of the Laugh Factory comedy club in Hollywood, who befriended the Arvizo family after learning Arvizo's son had been diagnosed with cancer, said he was saddened to learn of the new charges.
"Today people are being robbed in the street," Masada said. "To go after a person like that, who's been through the hell of almost losing a kid, it's just a sad thing."
The prosecution's case against Jackson was troubled from the start, but seemed to unravel when Arvizo took the stand, legal analysts said. Before she answered a single question from prosecutors, the judge informed the jury that she had invoked her 5th Amendment right to avoid testifying about the alleged welfare fraud. "In many ways, it seemed to cut the heart out of their case," said Craig Smith, a former Santa Barbara County prosecutor who followed the trial closely. "You never want to have one of your witnesses take the 5th Amendment because it makes them look guilty of something, or like they're hiding something."
During her five days on the stand, Arvizo was at times weepy and at times combative, particularly with Mesereau. Jurors said later that they didn't believe much of what she had to say.
Arvizo testified about an alleged Jackson plan to have the family sent to Brazil, and of her efforts to leave clues for anyone who might try to find them.
She said she and her children escaped from Neverland on three occasions, including once in a Rolls-Royce driven by a Jackson employee, only to return voluntarily each time.
"Not only did she torpedo the Jackson prosecution, she ended up getting charged herself," said Laurie Levenson, a professor at Loyola Law School in Los Angeles who followed the case closely. "It's the ultimate irony."
According to prosecutors, Arvizo received the fraudulent benefits between 2001 and 2003. She probably would not have been prosecuted were it not for the allegations she and her son made against Jackson.
Jackson's legal team was divided over whether to pass evidence of the alleged fraud to prosecutors before the trial.
Mesereau said he was afraid Arvizo would not testify, and he wanted the jury to see her erratic demeanor on the witness stand. Capozzola, who worked for Jackson but was not part of his defense team, said he had informed Los Angeles prosecutors of the alleged fraud because he thought it would spur Sneddon to dismiss the molestation case.
Dickerman, the former Arvizo lawyer, said he fears that other victims of celebrities will be reluctant to come forward after witnessing what happened in the Jackson case.
"The deck is stacked against people going after celebrities," Dickerman said. "I don't think you're going to find many people willing to do what they did."