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Michael Avenatti Indicted on 36 Counts of Fraud, Embezzlement

Federal authorities announced that a federal grand jury indicted Michael Avenatti on 36 embezzlement and fraud charges.

Los Angeles, CA – Federal authorities announced Thursday that a federal grand jury had indicted attorney Michael Avenatti on 36 counts of embezzlement and fraud.

The U.S. Attorney’s Office for the Central District of California announced a 61-page federal indictment on April 11 that detailed how Avenatti embezzled and hid millions of dollars from his clients, ABC News reported.

The thefts took place over a 10-year period and, if he’s found guilty, could land the attorney in federal prison for more than 300 years.

“The money was used to fuel a lavish lifestyle that had no limits, including making mortgage payments on a multi-million dollar home in Laguna Beach,” Acting Special Agent in Charge of Internal Revenue Service Criminal Investigation Ryan Korner said at the press conference to announce the indictment.

U.S. Attorney Nick Hanna detailed allegations that Avenatti had stolen from at least five clients, including a paraplegic client who won a $4 million settlement from Los Angeles County, NPR reported.

“Mr. Avenatti received money on behalf of clients into client trust accounts, misappropriated the money, and lied to the clients about receiving the money,” Hanna explained.

Court documents said Avenatti, who had already received the settlement on behalf of paraplegic Geoffrey Johnson, would occasionally dole out “advance” payments to him not to exceed $1,900.

Prosecutors also said the attorney undermined Johnson’s attempt to buy a house and risked his Social Security payments when he failed to submit paperwork, according to NPR.

“Mr. Johnson is the victim of an appalling fraud perpetrated by the one person who owned him loyalty and honest most of all: his own lawyer,” Johnson’s attorney, Josh Robbins, told ABC News in a written statement. “His actions have left Mr. Johnson destitute.”

Hanna said Avenatti followed the same pattern with at least four other clients.

“Mr. Avenatti received the money on behalf of clients, and simply took the money to finance his businesses and personal expenses,” Hanna told reporters.

In one case, Avenatti used $2.5 million of a client’s settlement money to pay for part of a private jet.

Korner said federal agents seized the attorney’s $5 million plane prior to announcing the indictment, ABC News reported.

Prosecutors also alleged that Avenatti filed fraudulent loan applications with a bank in Mississippi,

Avenatti first entered the national spotlight when he represented porn star Stormy Daniels, whose legal name is Stephanie Clifford, in her lawsuit against President Donald Trump.

Shortly thereafter, he announced he was considering a 2020 run for President, according to NPR.

But on March 25, the Manhattan U.S. Attorney’s Office announced pending extortion charges for Avenatti’s efforts to blackmail Nike for $20 million, CNN reported.

According to court documents, Avenatti met with Nike’s attorney on March 19, and “threatened to release damaging information regarding Nike if Nike did not agree to make multi-million dollar payments” to himself and others.

Avenatti claimed he had evidence that Nike employees “had authorized and funded payments to the families of top high school basketball players and/or their families and attempted to conceal the payments,” according to the criminal complaint.

The following day, he followed his threat up with a phone call to the company’s attorneys, and told that if his demands were not met, he would “go take ten billion dollars off your client’s market cap,” court documents read.

“I’m not f–king around with this” he added, according to court documents. “And I’m not continuing to play games. 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 also demanded that Nike pay $1.5 million to one of his clients whose contract the company didn’t renew.

The attorney is scheduled to be arraigned in federal court in Orange County on April 29, NPR reported.

Sandy Malone - April Thu, 2019


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