Octomom -- Pleads NOT GUILTY To Welfare Fraud

Nadya Suleman just pled NOT GUILTY to all 3 counts of felony welfare fraud.

TMZ broke the story ... Octomom was charged with cheating the welfare system out of more than $16K by failing to report income she made from personal appearances and her masturbation video.

Octo faces nearly 6 years of prison, but here's the way it usually works. If she pays what she owes, prosecutors will probably reduce the charge to a misdemeanor and judges usually don't send first time offenders to jail -- they get probation and community service.

Octo was receiving food stamps and other assistance because she stupidly had 14 kids.