Michael Avenatti, the twice-convicted attorney who represented porn star Stormy Daniels in her case against former President Donald Trump, will plead guilty in California to stealing $10 million from clients.
In a June 12 court filing, the disgraced attorney said he wanted to admit his crime so he “can be held accountable; To take responsibility; avoid further incriminating his former clients; save considerable resources for the court and the government; and his family further embarrassment.’
California federal prosecutors in 2019 found the brazen attorney on 36 counts of fraud, perjury, tax evasion, embezzlement and other crimes related to pocketing millions in client settlements, including withholding $4 million from a mentally ill paraplegic.
‘Mister. Avenatti received money on behalf of clients and simply took the money to fund his businesses and personal expenses,” California US Attorney Nick Hanna said at the unsealing of the indictment.
The once high-flying Avenatti was sentenced to four years in federal prison in New York for diverting $300,000 in book proceeds from Daniels.
He received two and a half years behind bars for a 2021 conviction over allegations he tried to extort $25 million from Nike. These sentences run simultaneously.
Michael Avenatti has been trying to reach a settlement with the California Feds over his 36-count indictment for more than a year
Avenatti tried to justify taking some book proceeds by citing other legal investigations he was taking on for Daniels when he was pursuing lawsuits on her behalf to negate the effects of a $130,000 payment she allegedly made in 2016 received from Donald Trump’s personal attorney to keep quiet about a tryst a decade ago that Trump has denied
Avenatti has been trying to work out a deal with the FBI about the California for some time.
“Despite repeated efforts by Mr. Avenatti and his attorney over the past year, including significant efforts over the past 30 days, the defendant has been unable to reach a settlement with the government,” reads a filing by H. Dean Steward, Avenatti advisor.
The media-hungry attorney is accused in part of taking $4 million Geoffery Ernest Johnson won against Los Angeles County over his incarceration at the Twin Towers Jail.
Johnson attempted suicide by jumping twice from the prison’s upper floor, injuring himself enough to lose the use of his legs.
Avenatti took the settlement and funneled it through bank accounts and laundered it in shell companies including his race car team and Seattle coffee company Global Baristas to hide the money, prosecutors allege.
Avenatti is accused of hiding the settlement money from Geoffery Ernest Johnson (pictured) and pretending the money could not be paid out. Realizing his alleged fraud would be exposed, he rushed to Johnson and had him sign a glowing testimonial of his services to secure himself
Beauty vlogger Michelle Tran, pictured, lost $4 million in stock sales to Michael Avenatti
The attorney is accused of accepting a $2.75 million settlement from NBA player Hassan Whiteside (right) intended for Avenatti’s client, the baller’s ex Alexis Gardner (left), and Spent most of it on a 2016 Honda Jet
Within five months, Avenatti had burned the $4 million but told Johnson the settlement money had not been received. Meanwhile, Johnson’s disability payments have been suspended by the Social Security Administration.
“On a scale of 1 to 100, his despicable behavior is a 1,000,” Johnson’s attorney, Daniel Callahan, said at the time the indictment was unsealed.
When it looked like Avenatti’s plan was about to unravel, he persuaded Johnson to sign him a glowing testimony.
The prosecutor also accuses him of not paying taxes for his various law firms for 2015, 2016 and 2017.
Prosecutors allege Avenatti hid $2.5 million to buy a stake in a small HA-420 private jet (file photo)
The indictment also alleges that he withheld $2.4 million in taxes from Global Baristas employees, but never disclosed it to the IRS.
He is also accused of bagging another $2.75 million settlement for Alexis Gardner, ex-girlfriend of Miami Heat player Hassan White.
The lawyer used most of the money to pay for a private jet.
Beauty vlogger Michelle Phan and her business partner Long Tran also fell victim to his plan. The YouTuber, who has 8.8 million followers, claimed Avenatti embezzled $4 million in stock sales from her beauty products company, which she sold to an unnamed company, according to the Daily Beast.
He used part of the money to pay off his tax debts.
Businessman Gregory Barela regretted keeping Avenatti after the attorney kept part of a $1.9 million settlement, according to the FBI.
Avenatti stole settlements from a total of five clients.
The most recent file does not indicate how many of the three dozen charges Avenatti will admit to.
If convicted on all counts, Century City’s attorney faces a maximum sentence of 333 years, according to the FBI.
THE FEES AGAINST AVENATTI
CALIFORNIA
10 cases of wire fraud
Avenatti allegedly committed wire fraud by lying to five clients about their settlements from cases in which he represented them.
The total amount of money he allegedly embezzled is $10 million.
He’s accused of not only hiding their payments from them, but spending the money himself on private planes, paying back the IRS, and funding his own businesses between 2015 and 2017.
19 cases of tax fraud
Avenatti hasn’t filed personal income tax returns since 2010, they say.
Between 2015 and 2017, his coffee company Global Baristas US failed to pay $3.2 million in federal payroll taxes.
More than $2 million of that sum was allegedly withheld from employees’ paychecks and spent by Avenatti himself.
Two cases of bank fraud
The two allegations of bank fraud relate to the original indictment and allegations that he submitted false financial information in order to obtain three loans totaling $4.1 million from Mississippi’s People’s Bank.
The falsified information included a tax return that had never been filed with the IRS, and he overextended his law firm’s resources when it was on the verge of bankruptcy.
One said his company, Eagan Avenatti, had more than $500,000 in an operating account when it reportedly only had $43,000.
Bankruptcy fraud in four cases
Three of the bankruptcy fraud charges allege that Avenatti submitted, under penalty of perjury, monthly operating reports that did not report all of the company’s claims in 2017.
Avenatti is accused of false testimony under oath during a bankruptcy hearing in June 2017, denying that the firm received fees related to a lawsuit, when in fact Eagan Avenatti received more than $1.3 million
SENTENCED
New York case 1
conspiracy to extort
Avenatti allegedly tried to blackmail Nike by saying he had information implicated in a pay-for-play college basketball scandal that year.
He allegedly told the company that instead of exposing them, he would conduct an internal investigation for a fee of $25 million.
Nike reported him.
SET: Two and a half years
SENTENCED
New York case 2
Charged with embezzling nearly $300,000 in funds from ex-adult film star Stormy Daniels.
SET: Four years