Attorney Michael Avenatti Indicted on 36 Counts of Embezzlement, Fraud, Tax Evasion

Michael Avenatti

Michael Avenatti

Attorney Michael Avenatti has been charged in a 36-count federal indictment alleging he stole millions of dollars from clients, did not pay his taxes, committed bank fraud and lied in bankruptcy proceedings.

The lawyer was arrested last month in NY for allegedly attempting to extort millions of dollars from Nike.

Embattled California attorney Michael Avenatti will be named in an indictment at noon EST on Thursday.

He also faces 19 counts relating to tax offenses, including failing to file his personal income tax returns in 2010.

"Money generated from one set of crimes was used to further other crimes, typically in the form of payments created to string along victims so as to prevent Mr. Avenatti's financial house of cards from collapsing", U.S. Attorney Nicola Hanna in Los Angeles said Thursday at a press conference.

Avenatti, who gained notoriety by representing porn actress Stormy Daniels in a lawsuit against Trump, denied the allegations and said the case comes after two decades of representing "Davids vs. Goliaths". "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".

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According to the indictment, Avenatti embezzled money from five of his clients and shuffled the money to cover up the theft. One of the clients whose money Avenatti stole was a mentally ill paraplegic who won $4 million from Los Angeles County. Meanwhile, he only gave Johnson periodic "advances" of no more than $1,900 and paid for his rent. The next day, he put $2.5 million of that money into the purchase of a private jet for Passport 420, LLC, a company he effectively owned, according to prosecutors. The aircraft was seized Wednesday, authorities said. The jet was registered to Passport 420, a company Avenatti co-owns.

Between September 2015 and January 2018, Global Baristas US, the company that operated Tully's, failed to pay the IRS $3.2 million in payroll taxes, including almost $2.4 million withheld from employees, the indictment said.

And, according to the indictment, he failed to pay almost $5 million in payroll taxes for a coffee store chain, Global Baristas US LLC, that he owned in Washington and California even while withholding the taxes from employees' paychecks.

He also allegedly defrauded a bank using false IRS tax returns that made it seem as though he had more money than he did in real life.

Avenatti gained prominence past year when he began representing Daniels in a defamation lawsuit against Trump. After all, the Lawyer of the Year contest here is about the lawyer who best dominates the year's news, and for all the attention Michael Avenatti received combating Donald Trump to secure last year's title, this year he may make as many waves defending himself.

Avenatti is now free on a $300,000 bond and is scheduled to be arraigned on April 29.

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