Michael Avenatti charged in 36-count federal indictment

Erika Holt
April 12, 2019

In a separate federal case in New York, Avenatti faces up to 47 more years if convicted on charges of trying to extort more than $20 million from Nike, the sportswear giant.

Breaking: A federal grand jury in California has indicted Michael Avenatti on 36 counts.

Avenatti allegedly scammed another client, a paraplegic man, out of a $4 million settlement without the client's knowledge, according to the indictment.

The county paid $4 million to resolve the case in January 2015, the US said, but Avenatti hid the money and, over a period of several months, drained the settlement for his own benefit.

Attorney Joshua Robbins said Thursday that Geoffrey Johnson was only paid a fraction of the money Avenatti collected in 2015 from a lawsuit against the Los Angeles County jail.

In 2017, Avenatti received $2.75 million in proceeds from another client's legal settlement, but concealed that too, the indictment says.

Avenatti faces 10 counts of wire fraud for stealing from a paraplegic man and four other clients he allegedly deceived by taking their money and using it to fund a lifestyle that included living in multimillion-dollar homes, flying in a private jet and sponsoring an auto racing team, authorities said.

According to the indictment, Johnson's efforts to buy a house failed because Avenatti withheld the settlement money, and Avenatti lied to the U.S. Social Security Administration about the settlement to hide the embezzlement, leading the agency to cut off Johnson's benefits.

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"As part of a long-running investigation into Avenatti's alleged financial misdeeds, officials said he did not pay taxes for several years and owed the Internal Revenue Service $850,438, plus interest and penalties. I look forward to proving my innocence", Avenatti wrote in a tweet, accompanied by a client's testimonial praising him as "an exceptional, honest and ethical attorney".

"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", Hanna said in a statement.

Avenatti was also charged with submitting fraudulent tax returns to get more than $4 million in loans from The Peoples Bank in Biloxi, Mississippi, in 2014.

Daniels, who replaced Avenatti as her lawyer last month, has said she was "saddened but not shocked" by his arrest. In one example in the indictment, Avenatti answered "no" under oath during the proceeding when asked if his firm received any fees from the Super Bowl NFL litigation.

Following Avenatti's arrest last month, The Washington Post's Devlin Barrett and Elise Viebeck reported that it marked "the latest and most remarkable chapter in the odd public saga of the California lawyer".

Avenatti became one of Trump's leading adversaries, attacking him on cable news programs and Twitter.

"Knowing full well that the requested information could lead to inquiries that could reveal" the embezzlement, Avenatti ignored Johnson's request, causing the government to cut off his disability payments two months ago, according to prosecutors.

Avenatti has tweeted denials of all the allegations and says he will plead not guilty.

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