Take a large bowl and place the corn inside. Lightly crush the corn with a potato masher.
Stir in the chicken, milk, egg, salt and pepper. Then pour in the flour and baking powder to combine, and stir the corn mixture until it is completely combined.
Take a deep-fat fryer or a skillet and heat 2 in. of the oil to 375F. Take the batter and drop by 1/4 cupfuls into the oil. Fry these for 3 minutes on each side. Make sure they are golden brown. Drain them on paper towels and keep warm.
Now take a large saucepan to melt you butter over medium-low heat. Take your flour and seasonings and stir them in until it's smooth. Add your chilies and gradually stir in your milk. Bring it to a broil, and cook and stir for two minutes, or until thickened.
Serve fritters and sprinkle with cheese (optional).