Michael Avenatti Charged With Stealing Millions From a Paraplegic Client
On Thursday, Michael Avenatti, the attorney who formerly represented Stormy Daniels and was was briefly regarded by some as the great white hope for the Democratic Party, was charged in a massive 36-count grand jury indictment, which alleges that he stole millions of dollars from clients, committed bank fraud and perjury, and failed to pay his taxes, among other things. He faces up to 335 years in prison.
“Michael Avenatti allegedly stole from his clients, and he stole from the IRS,” Ryan L. Korner, the head of Los Angeles’ Internal Revenue Service criminal investigations unit, told the Los Angeles Times. “The money was used to fuel a lavish lifestyle that had no limits, including making mortgage payments on a multimillion-dollar home in Laguna Beach and purchasing a private plane.”
According to the grand jury indictment, Avenatti stole millions of dollars from clients in legal settlements, which he spent on items such as a private jet plane for one of his companies. He is accused of funneling the funds through shell companies and multiple bank accounts in order to avoid the attention of legal authorities.
In one particularly egregious example, Avenatti is accused of stealing a $4 million legal settlement from a mentally ill client on disability who was also a paraplegic. Per the indictment, Avenatti received the money in January 2015, yet told his client that the money would not be made available to him in a lump sum. Over the next four years, he distributed a series of small payments to his client totaling of about $125,000, a fraction of the cost of the actual settlement he had won. (On Twitter, Avenatti denied this, tweeting what he claimed was a signed form from the client attesting to “my ethics and how the case was handled”).
Avenatti is also being charged with not paying his personal income taxes, as well as not paying his taxes on his businesses, including his law firms and a coffee chain. Additionally, he is accused of submitting fraudulent tax returns in 2014 in order to get a multi-million-dollar loan from a bank in Biloxi, Mississippi.
These charges are unrelated to a separate set of charges Avenatti is facing in New York, which allege that the lawyer tried to extort Nike out of millions of dollars by threatening to release evidence that the company had violated NCAA rules for recruiting college basketball players. He faces up to 47 years in prison if convicted of those charges.
Avenatti, who is currently out on $300,000 bail, did not immediately respond to a request for comment, but he wrote on Twitter that he intended to “fully fight all 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.
For 20 years, I have represented Davids vs. Goliaths and relied on due process and our system of justice. 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.
— Michael Avenatti (@MichaelAvenatti) April 11, 2019
I intend to fully fight all charges and plead NOT GUILTY. I look forward to the entire truth being known as opposed to a one-sided version meant to sideline me.
— Michael Avenatti (@MichaelAvenatti) April 11, 2019
He also tweeted Teddy Roosevelt’s “Man in the Arena” quote, but took it down.
I have never agreed more with this than now. #InTheArena pic.twitter.com/KjRbYiRcNr
— Michael Avenatti (@MichaelAvenatti) April 11, 2019