Avenatti said he will plead not guilty to the California charges, which include embezzlement and filing fraudulent tax returns

This article is more than 1 year old

This article is more than 1 year old

Michael Avenatti, the attorney who once represented Stormy Daniels and floated the idea of running for president, 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.

Avenatti, 48, was indicted late on Wednesday by a southern California grand jury on a range of additional charges following his arrest last month in New York on two related counts and for allegedly trying to shake down Nike for up to $25m.

Michael Avenatti, ex-lawyer for Stormy Daniels, arrested on extortion charges Read more

The attorney is best known for representing the pornographic film actress and producer Stormy Daniels in lawsuits against Donald Trump over hush money she was paid to cover up an alleged affair with the president in the past, also involving a non-disclosure agreement.

Avenatti said on Thursday on Twitter that he will plead not guilty to the California charges.

“I look forward to the entire truth being known as opposed to a one-sided version meant to sideline me,” he wrote.

Michael Avenatti (@MichaelAvenatti) 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.



The new charges do not include the New York extortion case alleging Avenatti demanded millions to stay quiet about claims he planned to reveal about Nike paying high school players. Avenatti has said he expects to be cleared in that case.

The 61-page southern California indictment alleges Avenatti embezzled from a paraplegic man and four other clients and deceived them by shuffling money between accounts to pay off small portions of what they were due to lull them into thinking they were getting paid.

“Money generated from one set of crimes was used to further other crimes,” the US attorney Nick Hanna told reporters. “Typically in the form of payments designed to string along victims so as to prevent Mr Avenatti’s financial house of cards from collapsing.”

He is also charged with not paying personal income taxes, not paying taxes for his various businesses, including two law firms, and pocketing payroll taxes from the Tully’s Coffee chain that he owned, the indictment said.

Avenatti was also charged with submitting fraudulent tax returns to get more than $4m in loans from the Peoples Bank in Biloxi, Mississippi, in 2014. The tax returns he presented to the bank were never filed to the IRS, prosecutors have said.

The charges are the latest major blow to a career that took off last year when Avenatti represented Daniels in her lawsuit to break a confidentiality agreement with Trump to stay quiet about an affair they allegedly had.

Avenatti became one of Trump’s leading adversaries, attacking him on cable news programs and Twitter. At one point, Avenatti even considered challenging Trump in 2020.

But back home, his business practices had come under scrutiny from the IRS and a former law partner who was owed $14m by Avenatti and the Eagan Avenatti firm, which filed for bankruptcy.

The indictment said Avenatti made false statements in bankruptcy proceedings by submitting forms under penalty of perjury that under-reported income his firm received.

The most glaring example of deception and fraud was described in the indictment as scheming Avenatti allegedly did to deprive clients of money they were due from legal settlements or sales of stock and the actions he took to cover his tracks.

In a case involving one client, Avenatti allegedly funneled a $2.75m settlement into his bank accounts and spent $2.5m on a private airplane, the indictment said.

Although Avenatti was due a portion of settlement funds for his work, the charges said he paid only a fraction of the money clients were due in some cases and strung them along while they waited to be paid.

Avenatti allegedly drained a $4m settlement he negotiated in 2015 on behalf of Geoffrey Johnson, who was paralyzed after trying to kill himself in the Los Angeles county jail, the indictment said.

Avenatti posted a “client testimonial” on Thursday from Johnson on Twitter that praised Avenatti as “an exceptional, honest and ethical attorney and I feel fortunate to have had him represent me”.

Johnson, who is now destitute, only realized after Avenatti’s arrest the following week that he had been a victim of fraud, said the attorney Joshua Robbins, who now represents him.

Robbins, a former federal prosecutor, said he was surprised Avenatti posted the statement.

“This is the first time I’ve seen someone tweet out incriminating evidence in their own case the same day they were indicted,” Robbins said.