Michael Avenatti charged with 36 counts: Embezzlement, fraud, cheating on taxes

Saul Bowman
April 12, 2019

The indictment came about three weeks after Avenatti, best known for representing adult film star Stormy Daniels in her legal battles with U.S. President Donald Trump, was arrested in NY on two separate criminal complaints filed by federal prosecutors in NY and California.

In a press release detailing the charges, the U.S. Attorney's Office for the Central District of California said the 36-count indictment focused on "four areas of wrongdoing": Embezzlement, failure to file and pay income taxes, fraudulent loan applications, and concealing assets from a bankruptcy court.

"Money generated from one set of crimes was used to further other crimes, typically in the form of payments created to string along victims so as to prevent Mr. Avenatti's financial house of cards from collapsing", Nicola Hanna, the USA attorney for California's Central District, said at a news conference in Los Angeles.

Avenatti allegedly scammed another client, a paraplegic man, out of a $4 million settlement without the client's knowledge, according to the indictment. If convicted on all counts, Avenatti would face 335 years in prison. He was charged in a criminal complaint in Santa Ana, California, on March 25 for stealing a different client's $1.6 million settlement to cover his own expenses, as well as cheating a MS bank.

As the private jet was seized by federal authorities on Wednesday (April 10), it's been alleged that most of the money for the paraplegic client was funneled to a company that managed Avenatti's race-car team, as well as to his coffee company, Global Baristas. Avenatti used some clients' money to pay previous clients he had swindled and "pay some of his law firm's bankruptcy creditors, including the IRS", according to the US attorney's office. The 48-year-old lawyer, a Los Angeles resident, said he planned to fight the charges and plead not guilty.

"I am entitled to a FULL presumption of innocence and am confident that justice will be done once ALL of the facts are known", he wrote on the social media platform.

Avenatti embezzled settlement funds and proceeds from other matters he handled from five clients and doled out small portions of what they were due to "lull" them into thinking they were getting what they were owed, prosecutors said.


Avenatti also failed to file tax returns for both of his law firms, Eagan Avenatti and Avenatti & Associates, in 2015, 2016 and 2017, the government charged.

The indictment is consistent with The Daily Caller News Foundation's previous reporting on Avenatti's management of Tully's coffee chain.

Until last month, Avenatti had only provided $124,000 to Johnson, the indictment said. In one example in the indictment, Avenatti answered "no" under oath during the proceeding when asked if his firm received any fees from the Super Bowl NFL litigation.

Avenatti on Thursday called the allegation "bogus nonsense" on Twitter.

"Money generated from one set of crimes was used to further other crimes, typically in the form of payments created to string along victims, so as to prevent Mr. Avenatti's financial house of cards from collapsing", Hanna said.

In addition to Client 1, Hanna said, Avenatti followed a similar pattern with four other clients.

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