Michael Avenatti Allegedly Embezzled Nearly $2 Million of NBA Star’s Payment to Ex

Michael Avenatti has been accused of embezzling nearly $2 million of a payment made in January 2017 to his client, Alexis Gardner, from her then-boyfriend, Miami Heat star Hassan Whiteside, The Los Angeles Times reports.

Gardner, an actress and barista, hired Avenatti — best-known for representing porn star Stormy Daniels — a few weeks earlier to negotiate the settlement of a potential lawsuit against the NBA player. (The underlying accusation of the suit is unknown.) Avenatti helped them reach a $3 million deal, with $2.75 million as Whiteside’s first payment and the remaining $250,000 to follow on November 1st, 2020. Prosecutors say Avenatti was entitled to just over $1 million in legal fees — but instead, he used $2.5 million from the settlement to buy a share of a private jet.

Avenatti allegedly misrepresented the payment structure, telling Gradner that the first wave of money was for legal fees, with the rest to be split into 96 monthly payments over eight years. The lawyer ended up making 11 payments to Gardner, characterizing them as Whiteside’s monthly installments, for a total of roughly $194,000. For nine more months, he allegedly continued to deceive his client, claiming her ex was breaching the settlement by skipping payments.

Gardner claims she never received a copy of the settlement, but Avenatti argues that she received one the day of signing. The celebrity attorney declined to specify how much of the nearly $3 million payment he took for legal fees and expenses, but he said Gardner was given “far more than $194,000” — including “living expenses and other expenses for a long period of time” — a discrepancy he plans to “prove it at trial.”

“We entered into a mutually agreed upon settlement more than two years ago following the end of our relationship; a settlement that reflected Alexis’ investment of time and support over a number of years as Hassan pursued a career in the NBA,” Whiteside and Gardner told the L.A. Times in a joint statement via Whiteside’s agent. “It is unfortunate that something that was meant to be kept private between us is now being publicly reported. We have both moved on amicably and wish nothing but the best for each other.” 

The alleged embezzlement was part of the Los Angeles lawyer’s April 10th indictment by a federal grand jury in Santa Ana, California. The 36-count indictment also includes accusations of tax fraud and bankruptcy fraud, among other financial crimes. In a separate federal case, he was arrested in late March connected to an alleged extortion attempt on sportswear company Nike. Avenatti has denied wrongdoing on all charges, for which — if convicted — could bring a maximum of 382 years in prison.

“No monies were ever embezzled from anyone and I look forward to all of the relevant documents and facts being presented at trial,” Avenatti told The LA Times on Sunday via email, adding, “The clients complaining are a very small fraction of the thousands of clients I have serviced over my nearly 20 year career.”