Michael Avenatti Indicted on 36 Counts by Federal Grand Jury
He’s been accused of stealing millions from clients, dodging taxes, and defrauding a bank.
Michael Avenatti has been indicted on 36 counts by a federal grand jury in California, a spokesman for the U.S. Attorney in Los Angeles confirmed to The Daily Beast.
Avenatti, who made his name as the attorney for adult film star Stormy Daniels and as a vocal critic of President Trump, will reportedly be indicted on new charges, alleging he stole millions from clients, didn’t pay his taxes for his coffee business, and committed bank fraud to cover up the crimes.
Some of the new charges against Avenatti include fraud, perjury, tax dodging and embezzlement from clients, according to Ciaran McEvoy, a spokesman for the U.S. Attorney in Los Angeles.
The celebrity lawyer has been accused by California prosecutors of stealing $1.6 million from a client’s settlement to cover his own expenses, and defrauding a bank in Mississippi. He is also facing charges from federal prosecutors in New York, who have accused him of trying to extort millions of dollars from Nike Inc. Avenatti denies the charges, and was released from jail on a $300,000 bond after his arrest in New York.
“The case paints an ugly picture of lawless conduct and greed,” Nick Hanna, the U.S. attorney in Los Angeles, said last month.
Avenatti didn't file tax returns for years and obstructed IRS efforts to collect millions in unpaid taxes from himself personally, and his Newport Beach law firm and Seattle-based coffee company, a California complaint against the lawyer alleges.
The complaint laid out how Avenatti allegedly spent the millions he kept from the IRS on luxe personal expenses, including watches, an “elite private action club,” and Porsches.
Last October, as Avenatti floated a 2020 presidential run, The Daily Beast investigated questions over his finances and $1.2 million in tax liens.
The California indictment requires Avenatti to appear in court to enter a plea. The judge may also set a trial date.
“For 20 years, I have represented Davids vs. Goliaths and relied on due process and our system of justice,” Avenatti tweeted Thursday morning. “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.”
He continued: “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.”
According to the Los Angeles Times, a Santa Ana grand jury alleges in the new indictment that the famed lawyer stole millions from five different clients, then used various companies and bank accounts to cover up the act. The exact amount of money Avenatti stole from his clients is unclear.
The indictment also details how Avenatti allegedly hid a $4 million legal settlement in favor of a mentally ill paraplegic client, Geoffrey Johnson, and hid a $2.75 million settlement for another client. Avenatti then allegedly used the money to help pay for the purchase of a private jet, according to the Times.
Last month, The Daily Beast reported that the California complaint also suggested Avenatti stole money from beauty blogger Michelle Phan. Avenatti allegedly failed to pay “M.P.” millions owed to her in connection to the divestment of one of her businesses, according to a search warrant affidavit filed by an IRS investigator. Soon after news of Avenatti’s arrest spread, Phan posted an image to Twitter, “The best revenge is always to just happily move on and let karma do the rest.”
Both the IRS and the U.S. Attorney’s Office announced the 34 new criminal charges against Avenatti. Those charges will be added to the felony bank fraud and wire fraud charges that Los Angeles prosecutors lodged against Avenatti in March.
On the day of Avenatti’s arrest, federal agents executed search warrants for his apartment, law office, and the home of Judy Regnier, his office manager at Eagan Avenatti, according to the U.S. Attorney’s Office. Regnier did not immediately respond to The Daily Beast’s request for comment.
If convicted, Avenatti faces a maximum sentence of 335 years in prison.
Meanwhile, in New York, Avenatti allegedly conspired to extort Nike for $25 million with the help of a co-conspirator (reportedly celebrity lawyer Mark Geragos). Prosecutors say the duo threatened the shoe brand's reputation, saying they had proof Nike employees secretly paid the families of high-school basketball players.
According to a criminal complaint, Avenatti offered to cancel a press conference on Nike's alleged misdeeds in exchange for a $1.5 million payout to his client, an amateur basketball coach whose Nike contract wasn't renewed. Avenatti also allegedly demanded Nike “retain” him and his co-counsel for up to $25 million to conduct an “internal investigation” into the payments, or pay them nearly as much for their silence.
The demands prompted Nike's lawyers to contact the feds, who helped them covertly record conversations with Avenatti.
“You guys know enough now to know you’ve got a serious problem. And it’s worth more in exposure to me to just blow the lid on this thing,” Avenatti allegedly warned Nike's counsel. “A few million dollars doesn’t move the needle for me.”
Since his arrest and subsequent release from jail, Avenatti has issued a salvo of tweets against Nike, including one claiming its executives “participated in and/or helped cover-up the massive illegal bribes paid to rig the college recruitment process.”