Avenatti, you’re so naughty, say feds
New charge: Ex-Stormy att’y hid cash to live large
Michael Avenatti’s Nike extortion trial is now in “chaos” after his new arrest for allegedly concealing cash to fund his lavish lifestyle amid mounting legal woes, a judge said Wednesday.
The loudmouth lawyer who rocketed to fame through feuds with President Trump was slapped in handcuffs by federal agents late Tuesday as he appeared for a California state bar hearing in downtown Los Angeles to possibly suspend his law license.
Already some $10 million in debt, Avenatti, 48, is now accused of hiding and laundering money over the past nine months in an elaborate scheme to purchase a Mercedes-Benz, fund his $11,000-per-month luxury condo, maintain membership in an elite vacation club and pay private school tuition for his daughter.
The ex-attorney for porn star Stormy Daniels spent the night behind bars and was denied release Wednesday by a federal judge in Santa Ana who ordered Avenatti transferred to New York in custody for the Nike trial, a prosecution source confirmed.
“I believe the danger to the community is real and palpable,” U.S. District Judge James Selna said, according to The Associated Press.
His surprise arrest came a week before the scheduled start of his trial in Manhattan for allegedly trying to shake down Nike for more than $20 million.
“The arrest of Mr. Avenatti this close to the trial has essentially thrown the trial in to chaos,” Judge Paul Gardephe, who will preside over the Nike trial, said during a phone conference. The judge, who was clearly frustrated by the surprise arrest, delayed the start of jury selection but said the trial should begin by Jan. 27 at the latest.
Prosecutors in California say Avenatti was taken back into custody for violating the terms of his release in a fraud case filed separately last April, on the same day as the Nike extortion case.
The California charges, based in federal court in Orange County, allege Avenatti lied to the IRS, failed to pay taxes and committed bank fraud.
Prosecutors claim Avenatti violated his pretrial release when he received a $1 million payment on April 30 as part of a settlement for a client and failed to turn the money over to creditors.
Instead, he “fraudulently” transferred $717,723 to his first wife, Christine Avenatti Carlin, on May 8 and used another $29,264 to pay private school tuition for at least one of their daughters, prosecutors say.
After paying Carlin, he then “arranged” for her to buy him a Mercedes-Benz for $52,983 on May 9 and had her cut him a $500,000 cashier’s check that he cashed on May 22, prosecutors allege.
Avenatti even used an Arizona driver’s license while filling out paperwork for the ritzy ride to avoid paying California tax, authorities claim.
A personal driver then repeatedly drove the lawyer around in the deluxe vehicle. Avenatti was seen leaving an Aug. 20 foreclosure auction in the car after buying some artwork, court paperwork states.
Between June and September, Avenatti “flipped” cashier’s checks to himself at least eight times in a scheme to limit funds in his bank accounts that might become subject to levies, prosecutors claim.
He would make the checks payable to himself “to drain” the funds then redeposit them only to “immediately access” the money before starting the process over again, prosecutors say.
On July 16, for instance, he allegedly deposited a $135,000 cashier’s check purchased June 24 and immediately withdrew the full amount to pay personal expenses including a $10,700 membership in Exclusive Resorts.
The elite vacation club boasts luxury properties in New York, Florida, California and Italy, and Avenatti also allegedly allowed a girlfriend to stay at the Tuscany property using his membership in September.
In their motion to revoke Avenatti’s release, prosecutors noted he had an Italian passport at the time of his arrest last year, leading them to question “whether defendant has any assets there.”
“Since at least May 2019, defendant has brazenly attempted to defraud and conceal his assets,” the filing states.
The new allegations raise questions about whether Avenatti would be able to cover expenses associated with the Nike trial, including transportation for witnesses scheduled to testify on his behalf.
“We have no access to Mr. Avenatti at this point and have no idea when we can expect to meet with him or discuss the matters on a non-monitored telephone line,” attorney Scott Srebnick wrote.
Adding insult to injury, Gardephe ruled that Avenatti could not argue to the jury in the Nike case that he was targeted for arrest because of his criticism of Trump.
“Acknowledging the animosity between Avenatti and President Trump, Avenatti has not proffered evidence suggesting that this prosecution was initiated at President Trump’s behest,” Gardephe wrote in a decision issued Wednesday morning, less than 24 hours after the latest arrest.
Avenatti is charged in a third case of swindling his most famous client, Daniels, out of $300,000 from a book deal.