Rebecca R. Ruiz

Authorities accused Avenatti of stealing millions of dollars from five clients and of lying repeatedly about his business and income — not just to clients but also to an IRS collection agent, creditors, a bankruptcy court and a bankruptcy trustee.

Avenatti was indicted by a federal grand jury in Santa Ana, California, on the new charges, which included tax fraud and bankruptcy fraud, adding to charges of wire fraud, bank fraud and extortion that were filed against him last month in California and New York. If convicted of all the crimes of which he has been accused in California alone, prosecutors said, he would face a maximum of 333 years in prison, and an additional two-year mandatory sentence on an identity theft charge.

“It is lawyer 101: You do not steal your client’s money,” Nicola T. Hanna, the U.S. attorney in Los Angeles, said at a news conference Thursday, describing Avenatti’s business as a Ponzi scheme of sorts. “Money generated from one set of crimes was used to further other crimes, typically in the form of payments used to string along victims so as to prevent Mr. Avenatti’s financial house of cards from collapsing.”

Avenatti denied all of the allegations on Thursday. He has suggested the case against him is politically motivated, following his aggressive representation of Daniels, the pornographic film actress who said she had a sexual relationship with Trump and received a hush-money payment in October 2016. (Two suits Avenatti brought on behalf of Daniels against Trump have been dismissed.)

“This case is based on the facts and the documents,” Hanna said Thursday, noting that the charges stemmed from an inquiry by the IRS’ criminal investigation division that dated to September 2016, before Trump was elected and well before Avenatti began representing Daniels.

Among the five clients Avenatti is accused of defrauding across four matters, prosecutors said, one was a paraplegic man, Geoffrey Ernest Johnson, who won a $4 million settlement from Los Angeles County four years ago but had received only “a fraction of the money” through periodic payments that never exceeded $1,900.

“Mr. Avenatti stole millions of dollars that were meant to compensate Mr. Johnson for a devastating injury, spent it on his own lavish lifestyle, then lied about it to Mr. Johnson for years to cover his tracks,” Josh Robbins, a lawyer for Johnson, said Thursday. “His actions have left Mr. Johnson destitute.”

Avenatti lied to clients about having received a total of more than $12 million in settlement payments, a share of which he would have been entitled to keep for his work, prosecutors said. He told clients the money had not yet arrived or, in one case, that he had already forwarded the funds to the client. He paid out small portions of what was owed to the clients, calling those payments “advances on the settlement,” prosecutors said.

Avenatti put most of the client money toward his own expenses, authorities said, including a $5 million private jet he co-owned, which prosecutors said they had seized Wednesday. In the purchase of that aircraft, according to the charging documents unsealed Thursday, Avenatti used $2.5 million of a client’s $3 million settlement, paid in 2017, while he told the client that the settlement would be paid in installments over eight years.

In other instances, the indictment said, he put client money toward paying personal legal expenses, paying creditors after his firm had filed for bankruptcy, and paying costs associated with a coffee company he owned.

He also dodged taxes, some that he owed himself and others that were owed by his firm, prosecutors said. They alleged that Avenatti had lied to an IRS revenue officer and had taken steps to prevent the government from collecting on tax liens and levies since 2013.

Though from 2015 to 2017 he withheld taxes from the paychecks of employees at the coffee company — Global Baristas, which ran Tully’s coffee stores — Avenatti failed to pay more than $3 million in payroll taxes to the government, prosecutors said. They accused him of trying to obstruct the government’s efforts to collect nearly $5 million in unpaid payroll taxes and penalties by routing coffee-company money to different bank accounts, including one associated with a car-racing company he owned.

“As the tax filing season comes to an end, the indictment filed today sends a clear message,” Ryan Korner, the acting special agent in charge of the IRS’ Criminal Investigation division in Los Angeles, said Thursday. “We will investigate all individuals, including high-profile attorneys who violate the tax laws.”

At the time of Thursday’s announcement, Avenatti was out on $300,000 bail after having been arrested late last month in New York, where he was accused of demanding millions from Nike’s lawyers while threatening to reveal what he has described as improper payments to college basketball recruits by the sportswear giant. He is due to answer to the new charges against him on April 29 in federal court in Santa Ana.

“I intend to fully fight all charges and plead not guilty,” Avenatti said on Twitter after the new charges in California were announced. “I look forward to the entire truth being known as opposed to a one-sided version meant to sideline me.”

“For 20 years, I have represented Davids vs. Goliaths and relied on due process and our system of justice,” he said. “Along the way, I have made many powerful enemies. I am entitled to a full presumption of innocence and am confident that justice will be done once all of the facts are known.”

Avenatti, 48, was a fixture on cable news as an antagonist to Trump as Daniels’ case played out. He and Daniels parted ways this year, and his firm again filed for bankruptcy last month. Even since he was first charged last month, he has turned to the news media to mount his defense.

“I can take a tremendous amount of punishment and keep going,” he told The New York Times days after he was arrested. “Anytime you’re charged with any felony you have to take it seriously, and I’m concerned about it,” he said, quickly adding: “The government has me in their crosshairs, and there are reasons for that.”

He declined to explain what exactly he meant by that.

This article originally appeared in <a href="https://www.nytimes.com/2019/04/11/us/michael-avenatti-indictment.html" id="4390921e-8839-30fa-ac04-3fa28cd4fa13">The New York Times</a>.

Michael Avenatti Faces New Criminal Charges in Escalated Federal Case

In a drastic escalation of the criminal case against Michael Avenatti, the brash lawyer known for representing Stormy Daniels in lawsuits against President Donald Trump, federal prosecutors in California announced on Thursday that he had been indicted on three dozen counts.

Avenatti denied all allegations on Thursday. He has suggested the case against him is politically motivated, following his aggressive representation of Daniels, the pornographic film actress who said she had a sexual relationship with Trump and received a hush-money payment in October 2016.

Among the five clients Avenatti is accused of defrauding across four matters, prosecutors said, one was a paraplegic man who won a $4 million settlement from Los Angeles County four years ago but had received only “a fraction of the money” through periodic payments that never exceeded $1,900.

Avenatti put most of the client money toward his own purchases, authorities said, including a $5 million private jet he co-owned, which prosecutors said they had seized Wednesday.

He also dodged taxes, some he owed himself and others that were owed by his firm, prosecutors said. They alleged that Avenatti had lied to an IRS revenue officer and had taken steps to prevent the government from collecting on tax liens and levies since 2013.

“This case is based on the facts and the documents,” Hanna said Thursday, noting that the charges stemmed from an inquiry by the IRS’ criminal investigation division that dated to September 2016, before Trump was elected.

Though from 2015 to 2017 he withheld taxes from the paychecks of employees at a coffee company he owned — Global Baristas, which ran Tully’s coffee stores — Avenatti failed to pay more than $3 million in payroll taxes to the government, prosecutors said.

At the time of Thursday’s announcement, Avenatti was out on $300,000 bail after having been arrested late last month in New York, where he was accused of demanding millions from Nike’s lawyers while threatening to reveal what he has described as improper payments to college basketball recruits by the sportswear giant.

<h1>Federal prosecutors on Wednesday charged celebrity lawyer Michael Avenatti with misappropriating hundreds of thousands of dollars belonging to a former client, pornographic film actress Stormy Daniels.</h1>

The indictment, announced by the U.S. Attorney’s Office in Manhattan, marks the disintegration of a relationship that propelled Avenatti to national prominence and adds to his mountain of legal troubles as he stands accused of more than three dozen crimes in California and New York.

Avenatti is accused of taking more than $295,000 from Daniels, who is named in the indictment as “Victim-1” and was identified as the actress by a person with knowledge of the case.

After helping her secure a book contract last year, according to the charges, Avenatti sent “a fraudulent and unauthorized letter” bearing Daniels’ signature to her literary agent, demanding that a portion of the book advance be wired to a client trust account he controlled.

Avenatti is accused of putting the money toward his personal expenses, including plane tickets, hotel stays, meal delivery, dry cleaning and a monthly payment on a Ferrari.

Avenatti denied all the charges against him Wednesday and said he looked forward to fighting them in court.

“At no time was any money misappropriated or mishandled,” he told The New York Times, saying that any funds related to the book were part of his representation agreement.

“She received millions of dollars worth of legal services, and we spent huge sums in expenses,” he added, referring to Daniels, whom he said he had not represented since February. “She directly paid only $100 for all that she received.”

Daniels — whose memoir, “Full Disclosure,” was published by St. Martin’s Press last year — could not be reached for comment Wednesday.

Prosecutors said she “had not signed or authorized the letter” to her agent and “did not even know of its existence.” Avenatti tried to conceal the effort by advancing money to her “from another source” to stand in for one installment, prosecutors said, and he falsely said the publisher had not paid when she asked about another portion.

Avenatti drew national attention when he began representing Daniels in early 2018, filing lawsuits against President Donald Trump and Michael Cohen, the president’s former lawyer and fixer. He sought to release Daniels, whose legal name is Stephanie Clifford, from a hush agreement she had signed before the 2016 election. As part of that deal, she accepted $130,000 and agreed to keep quiet about a sexual relationship she said she had had with Trump in 2006.

Both of the lawsuits Avenatti filed on behalf of Daniels were dismissed, and in one case she was ordered to pay Trump $293,000 in legal fees.

Yet Daniels’ story created further trouble for the president, culminating in Cohen’s guilty plea last year to campaign finance crimes related to the hush payment. This month, he began serving a three-year prison sentence. The same office that won Cohen’s guilty plea — the public corruption unit of the U.S. Attorney’s Office for the Southern District of New York — filed the new charges against Avenatti, which included aggravated identity theft.

The new charges add to numerous others filed this year. Avenatti was arrested in New York in March on extortion charges, accused of seeking millions from Nike in exchange for what he described as evidence of misconduct by company employees in the recruitment of college basketball players. On Wednesday, he was also indicted on those previously announced charges.

In a separate indictment filed in California this spring, Avenatti was accused of stealing millions of dollars from five other clients, one of them a paraplegic man who had won a $4 million settlement but received only a fraction of that in periodic payments that never exceeded $1,900. Avenatti was also accused of filing fake tax returns to a Mississippi bank, and of lying repeatedly about his business and income to an IRS agent, creditors, a bankruptcy court and a bankruptcy trustee.

Avenatti, who spent much of 2018 crusading against Trump on cable news shows and teasing a presidential run of his own, has called the cases against him politically motivated.

But federal prosecutors in California said their indictment had grown out of a criminal investigation initiated in September 2016, months before the election that would catapult both him and his future client, Daniels, into the political arena.

“He blatantly lied to and stole from his client to maintain his extravagant lifestyle,” Geoffrey S. Berman, the top federal prosecutor in Manhattan, said in a statement Wednesday. “Michael Avenatti abused and violated the core duty of an attorney — the duty to his client.”

If convicted on all of the charges pending against him, Avenatti could face more than 300 years in prison.

This article originally appeared in <a id="ad9ae892-1aad-4e17-89a8-b165071dd8bb" href="https://www.nytimes.com/2019/05/22/us/politics/michael-avenatti-is-charged-with-stealing-nearly-300000-from-stormy-daniels.html">The New York Times</a>.

Celebrity Lawyer Avenatti Is Charged With Stealing From Client

Avenatti is accused of taking more than $295,000 from Daniels, who is named in the indictment as “Victim-1” and was identified as the actress by a person with knowledge of the case.

Celebrity lawyer Avenatti is charged with stealing from client

<h1>A federal judge on Thursday dismissed a lawsuit brought against President Donald Trump and his former lawyer by Stormy Daniels, a pornographic film actress who was paid to keep quiet about an alleged affair with Trump before the 2016 election.</h1>

The suit, brought a year ago in California, had sought to release Daniels from the nondisclosure agreement she had signed. As part of her arrangement, she received $130,000 in hush money through the president’s personal lawyer at the time, Michael Cohen.

As he tossed out the case this week, Judge S. James Otero, of U.S. District Court in Los Angeles, called the legal argument moot, given that Daniels had not been held to the terms of the agreement.

Indeed, Daniels and her lawyer, Michael Avenatti, have spoken freely about the arrangement since the filing last March. The lawsuit led to escalating national attention that culminated in Cohen’s pleading guilty to related campaign-finance crimes last summer.

Months earlier, well before Daniels had sued and Cohen had been charged, the lawyer legally pressured her to keep silent, initiating private arbitration proceedings against her in efforts to prevent her from speaking out.

As news of the suit’s dismissal broke Thursday, Daniels was preparing to promote her new book, “Full Disclosure,” around the country, including an expected appearance in Washington next week.

“The court found that Ms. Daniels received everything she asked for by way of the lawsuit,” Avenatti said by phone Thursday. “She won.”

Last fall, the same federal judge had dismissed a separate suit filed by Daniels against the president in which she said he had defamed her on Twitter. As part of that decision last year, Clifford was ordered to pay the president’s legal fees.

A lawyer for Trump, Charles J. Harder, called the decision this week a “total victory.” With the lawyers’ fees and sanctions, he said, the ruling amounted to an “award in the president’s favor totaling $293,000.”

Though Avenatti also claimed victory for his client Thursday, he had not received all he had requested. In the complaint filed last year, Avenatti did not just seek to invalidate the nondisclosure agreement. He also requested reimbursement for the costs of the litigation, as well as “further relief as the court may deem just and proper.”

This article originally appeared in <a id="9f8d6775-f707-46fd-9bfa-9fb47be57ac9" href="https://www.nytimes.com/2019/03/07/us/politics/stormy-daniels-trump-michael-cohen.html">The New York Times</a>.

Stormy Daniels' hush money suit dismissed by judge

As he tossed out the case this week, Judge S. James Otero, of U.S. District Court in Los Angeles, called the legal argument moot, given that Daniels had not been held to the terms of the agreement.

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Rebecca R. Ruiz

Articles written by the author

Michael Avenatti Faces New Criminal Charges in Escalated Federal Case

Michael Avenatti Faces New Criminal Charges in Escalated Federal Case

Michael Avenatti Faces New Criminal Charges in Escalated Federal Case

Michael Avenatti Faces New Criminal Charges in Escalated Federal Case

Celebrity lawyer Avenatti is charged with stealing from client

Stormy Daniels' hush money suit dismissed by judge