Michael Avenatti faces bank and wire fraud charges in the Central District of California for allegedly embezzling a client’s money and filing fake tax returns to obtain loans, the U.S. attorney in Los Angeles announced Monday. Prosecutors allege Avenatti, the former lawyer of porn star Stormy Daniels, negotiated a $1.6 million settlement for a client but allegedly told the client the payment was coming two months later than it actually did. Avenatti allegedly used that money to help pay off expenses for his coffee business, Global Baristas US LLC. He is also charged with bank fraud for allegedly fabricating his 2014 tax returns to obtain $4.1 million in loans from a bank in Mississippi.
“A lawyer has a basic duty not to steal from his client,” U.S. attorney Nick Hanna said on Monday. “Mr. Avenatti is facing serious criminal charges alleging he misappropriated client trust funds for his personal use and he defrauded a bank by submitting phony tax returns in order to obtain millions of dollars in loans.” The U.S. attorney for the Southern District of New York also announced separate federal charges against Avenatti, alleging the lawyer tried to extort Nike for over $20 million.