A federal grand jury in Los Angeles has indicted lawyer Michael Avenatti on 36 counts that include fraud, failure to pay taxes, embezzlement and other financial crimes. According to the indictment issued on Thursday, Avenatti stole millions of dollars from five of his clients and used a web of shell companies and bank accounts to cover up the theft.
One client, identified in court papers as a mentally ill paraplegic on disability, reportedly won a $4 million judgement against Los Angeles County while being represented by Avenatti. However, after the money was wired to Avenatti's law firm in January 2015, he reportedly hid it from his client for several more years, the indictment states.
Another client who received a $2.75 million legal settlement, was also concealed by Avenatti. At least $2.5 million dollars of that money was used to purchase an interest in a private jet for Passport 420, LLC, a shell company owned by Avenatti.
Avenatti and his businesses also owed millions in back taxes, according to the government with his Newport Beach law firm only weeks away from bankruptcy.
Ryan L. Korner, chief of Internal Revenue Service criminal investigations in Los Angeles, says Avenatti allegedly stole from his clients and the IRS.
"The money was used to fuel a lavish lifestyle that had no limits, including making mortgage payments on a multimillion-dollar home in Laguna Beach and purchasing a private plane," said Corner.
Federal agents seized the jet at Santa Barbara Airport under a warrant that remains under seal.
The lawyer best known for representing porn star Stormy Daniels in her case against President Donald Trump, says he plans on fighting the charges against him.
"For 20 years, I have represented Davids vs. Goliaths and relied on due process and our system of justice. Along the way, I have made many powerful enemies. I am entitled to a FULL presumption of innocence and am confident that justice will be done once ALL of the facts are known,” Avenatti said in a tweet. "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."
If he's found guilty on all charges, Avenatti faces up to 335 years in prison.
Avenatti, who is free on $300,000 bail, said he looks forward to proving his innocence.
The new charges are separate from another federal case in New York brought by prosecutors against Avenatti. In that case, prosecutors allege the lawyer attempted to extort more than $20 million from the sportswear giant Nike. He was reportedly recorded during a phone call with Nike's lawyers saying that if they failed to meet his demands, he would go "take ten billion dollars off your client's market cap."
If convicted of those charges, he could face another 47 years if convicted.
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