A week after Michael Avenatti’s arrest in New York, the attorney famous for representing the adult film star Stormy Daniels in legal battles against Donald Trump will be back in federal court Monday to face fraud charges in California.

Avenatti faces a hearing in the Orange county city of Santa Ana on charges he fraudulently obtained $4m in bank loans and pocketed $1.6m that belonged to a client.

Avenatti has long faced allegations from a former client and a former partner that he was hiding money to avoid paying what he owed.

Now federal authorities are adding their voices to that chorus, with the specter of a long prison sentence that could be the downfall of a man who once considered challenging Trump in his re-election bid.

Avenatti, 48, is charged with wire and bank fraud. He was arrested last week in New York and released on $300,000 bail on unrelated extortion charges. He has said he expects to be exonerated.

Federal prosecutors in New York allege Avenatti tried to shake down Nike for millions of dollars so he wouldn’t reveal allegations the apparel company paid off high school basketball players. He has denied the charge to reporters and began tweeting what he called evidence of the scandal the day after he was arrested.

In California, federal prosecutors said Avenatti filed bogus tax returns to fraudulently secure $4m in loans from a Mississippi bank and embezzled a client’s settlement funds.

The US attorney’s office in Los Angeles said Monday’s hearing would likely focus on setting future court dates.

Avenatti is known for his outspoken challenge of Trump and his lavish lifestyle, including a $100,000-a-month home in Newport Beach. He represented Daniels in her claim Trump paid her to keep quiet about their alleged affair ahead of the 2016 election.

Avenatti’s former law firm went through bankruptcy proceedings and was ordered to pay $10m to a former partner, who is still seeking to collect the money.