And the hits just keep on coming.
Michael Avenatti embezzled millions from paraplegic client's settlement, new 36-count indictment allegesThe indictment, which includes new charges, follows Avenatti's arrest in New York last month for allegedly trying to shake down Nike for up to $25 million.
Attorney Michael Avenatti leaves the federal court house in Manhattan on March 25, 2019.Johannes Eisele / AFP - Getty Images
April 11, 2019
By Tom Winter, Andrew Blankstein, Elisha Fieldstadt and Associated Press
Michael Avenatti, former attorney for Stormy Daniels, has been indicted by a federal grand jury in California on 36 counts, including embezzling from a paraplegic, court documents released Thursday show.
Avenatti, 48, faces charges of wire fraud, failure to collect and withhold payroll taxes, attempting to obstruct the IRS, failing to file tax returns, aggravated identity fraud, bank fraud and false testimony under oath during bankruptcy.
The lawyer was arrested March 25 on some of the counts, but the indictment filed by a federal grand jury late Wednesday "significantly broadens the scope of the case," according to a statement from the U.S. Attorney's Office for the Central District of California.
The criminal charges in the indictment "are all linked to one another because money generated from one set of crimes appears in other sets — typically in the form of payments to lull victims and to prevent Mr. Avenatti’s financial house of cards from collapsing,” said U.S. Attorney Nick Hanna.
Avenatti wouldn't comment beyond statements he made on Twitter.
"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," he wrote Thursday.
The charge involving the paraplegic client says Avenatti drained a $4 million settlement paid out to the client by Los Angeles County, using "portions of the settlement to finance his coffee business or pay personal expenses," the U.S. attorney's office statement said.
"Avenatti concealed the receipt of the settlement from Client 1 and instead gave him periodic “advances” of no more than $1,900 and paid the rent for his assisted living facility," the statement said.
Avenatti is also accused of embezzling millions of dollars from other clients, using the money to fund the purchase of a jet, his coffee business and his own legal and personal expenses.
He used some clients' money to pay previous clients he had swindled and "pay some of his law firm’s bankruptcy creditors, including the IRS," according to the U.S. attorney's office.
"Any claim that any monies due clients were mishandled is bogus nonsense. ... I look forward to proving my innocence," Avenatti wrote in a tweet, accompanied by a client's testimonial calling the lawyer "an exceptional, honest and ethical attorney."
Nineteen tax-related charges against Avenatti include accusations he has not filed personal income tax returns since 2010, and didn't file some tax returns for his two law firms. He is also accused of failing to pay more than $3 million in payroll taxes while he was the owner Global Baristas US LLC, which operated Tully’s Coffee.
"Avenatti allegedly attempted to obstruct the IRS’s efforts to collect the taxes" by lying and directing funds from credit card transactions at Tully's coffee shops to a new bank account, the U.S. attorney's office said.
The new charges follow Avenatti's arrest in New York last month for allegedly trying to shake down Nike for up to $25 million and on two counts of wire and bank fraud from Southern California, where his firm is based. Avenatti has said he expects to be cleared.
The attorney is best known for representing porn actress Stormy Daniels in lawsuits against President Donald Trump.
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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.
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The charges are the latest major blow to a career that took off last year when Avenatti represented Daniels in her lawsuit to break a confidentiality agreement with Trump to stay mum about an affair they allegedly had.
Avenatti became one of Trump's leading adversaries, attacking him on cable news programs and Twitter. At one point, Avenatti even considered challenging Trump in 2020.
But in California, his business practices had come under scrutiny from the IRS and a former law partner who was owed $14 million by Avenatti and the Eagan Avenatti firm, which filed for bankruptcy.
https://www.nbcnews.com/news/us-news/michael-avenatti-faces-36-count-indictment-california-n993391
