Avenatti faces more criminal charges
The lawyer is accused of taking $300,000 from client Stormy Daniels’ payment for a book about Trump.
Los Angeles lawyer Michael Avenatti was indicted Wednesday on charges of stealing from his former client Stormy Daniels by skimming money from her deal to write a memoir detailing her alleged sexual affair with Donald Trump.
It was the third time in two months that federal prosecutors have charged the celebrity attorney with criminal wrongdoing. Daniels is the sixth Avenatti client whose money he is accused of embezzling.
A federal grand jury in New York accused Avenatti of forging Daniels’ signature on a document instructing her literary agent to wire nearly $300,000 of her money to him.
Avenatti “blatantly lied to and stole from his client to maintain his extravagant lifestyle,” said Geoffrey Berman, U.S. attorney for New York’s Southern District.
“Far from zealously representing his client, Avenatti, as alleged, instead engaged in outright deception and theft,” Berman said.
Avenatti spent about half the money on personal expenses, including a Ferrari lease, prosecutors said.
On Twitter, Avenatti denied the charges. “No monies relating to Ms. Daniels were ever misappropriated or mishandled,” he said.
The indictment charges Avenatti with wire fraud and aggravated identify theft. If convicted on both counts, he faces up to 22 years in prison. With previous charges brought against him in the last two months, he faces a sentence of up to 404 years if convicted on all counts.
Daniels’ new attorney, Clark Brewster of Tulsa, Okla., said he brought the case to the FBI and federal prosecutors earlier this year after she showed him the records cited Wednesday in the indictment.
“What I witnessed here was just the most base of criminality,” Brewster said. “It really does take a calculated criminal mind to have done what he did over such a long period of time with such dishonesty, and all the while posing as her champion.”
Under an April 2018 contract that Avenatti helped negotiate with Daniels’ publisher, St. Martin’s Press, and literary agent, Janklow & Nesbit Associates, Daniels was to receive an $800,000 advance in four installments for her memoir, “Full Disclosure.” The book features graphic details of her alleged 2006 sexual encounter with Trump at a Lake Tahoe resort. It was published in October.
The publisher sent the first two installments totaling $425,000 to Janklow & Nesbit, which forwarded the money to her after taking a fee, according to the indictment.
But Avenatti embezzled the third and fourth installments, the grand jury alleged. They say he did it by emailing a letter to Janklow & Nesbit on Aug. 1, 2018, instructing the agency to wire the money to a bank account he controlled. The letter purported to be from Daniels, with her signature.
But Daniels neither authorized nor signed the “false wire instructions,” the indictment says.
When Avenatti received the two remaining installments, he spent the money on hotels, airline tickets, car services, restaurants, dry cleaning, a $3,900 lease payment on the Ferrari and various business expenses, according to the indictment.
Avenatti repeatedly lied to Daniels to cover up the theft, the grand jury alleged.
“When is the publisher going to cough up my money?” she asked him in December, according to the indictment.
Avenatti did not tell her he’d already received the money, saying instead that he was threatening to sue the publisher for failing to pay her. “They need to pay you the money as you did your part and then some,” he allegedly told her.
In January, the indictment says, Avenatti told her St. Martin’s Press was resisting making the payment due to purportedly poor sales.
Daniels made Avenatti famous last year by hiring him to sue President Trump to void a nondisclosure agreement she signed before the 2016 election. In exchange for her silence, she was paid $130,000 to keep quiet about her alleged sexual encounter with Trump.
Michael Cohen, the president’s former lawyer and fixer, pleaded guilty last year to a campaign finance felony for orchestrating the deal. Prosecutors say Trump directed Cohen to pay the hush money to Daniels.
When the scandal broke in early 2018, Avenatti fueled the media frenzy in scores of interviews with television news personalities. He explored a run for president, but his career in politics effectively died last fall when Los Angeles police arrested him on suspicion of domestic violence. Prosecutors declined to charge him.
Tensions between Avenatti and Daniels spilled into public view in November.
Daniels, whose real name is Stephanie Clifford, told the Daily Beast that Avenatti treated her with disrespect, ignored requests for an accounting of her crowdfunding money and, against her wishes, filed a second suit against Trump for defamation. Avenatti denied her allegations.
A federal judge dismissed both of Daniels’ lawsuits against Trump. He ordered Daniels in December to pay Trump $292,000 to cover the president’s legal fees. Two months later, Daniels and Avenatti parted ways for reasons neither disclosed.
The FBI arrested Avenatti in New York on March 25 after secretly recording what prosecutors say was an attempt to extort sportswear giant Nike in conversations with company lawyers. He was formally indicted in that case on Wednesday.
Prosecutors say Avenatti threatened to hold a news conference that would take billions of dollars off Nike’s market value unless it paid a client $1.5 million and hired Avenatti and L.A. lawyer Mark Geragos for as much as $25 million to conduct an internal investigation.
Geragos, identified by prosecutors as an unindicted co-conspirator, was not charged with any crimes.
Still, the most serious legal threat to Avenatti is in California, where he faces a separate 36-count federal indictment.
He is scheduled to be tried in Santa Ana in August on charges of embezzling millions of dollars from clients, dodging taxes, defrauding a bank to get loans, and concealing assets from creditors and the federal court that oversaw his law firm’s bankruptcy.
Avenatti denies wrongdoing.