A federal grand jury has indicted embattled lawyer Michael Avenatti on “36 counts of fraud, perjury, failure to pay taxes, embezzlement and other financial crimes,” the Los Angeles Times reported Thursday.
Avenatti is accused of stealing millions of dollars from five clients “using shell companies and bank accounts to cover up the theft,” according to the Santa Ana grand jury indictment .
Among the clients Avenatti allegedly cheated was Geoffrey Ernest Johnson, a mentally ill paraplegic on disability. In 2015, after Johnson won a $4 million lawsuit against Los Angeles County, the money was wired to Avenatti, who kept it for himself, according to the indictment.
After he won another case in 2017, Avenatti allegedly concealed $2.75 million in proceeds from that client’s settlement.
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.
At the time, Avenatti and his businesses owed millions of dollars in back taxes, the government claimed, and his Newport Beach law firm, Eagan Avenatti, was weeks from bankruptcy.
“Michael Avenatti allegedly stole from his clients, and he stole from the IRS,” said Ryan L. Korner, the chief of IRS criminal investigations in Los Angeles. “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.”
Federal agents seized Avenatti’s private jet at Santa Barbara Airport Wednesday morning after a federal judge issued the warrant. The Honda HA-420 twin-engine plane is worth about $4.5 million, Fox News reported.
“Federal authorities have seized a jet co-owned by Mr. Avenatti pursuant to a seizure warrant issued by a federal judge. This seizure is related to the pending criminal case in Los Angeles,” a federal official said.
Avenatti told Fox News on Wednesday: “I haven’t used the plane in almost a year and I gave up my interest last year. I have no interest in the plane and could care less.” He accused Fox News of “tabloid journalism” in a tweet Wednesday:
Re the “jet seizure” and Fox News’ tabloid journalism – led by moron @ShepNewsTeam: I haven’t used the jet in almost a year and gave up my interest months ago last year. So they have no idea what they are talking about.
— Michael Avenatti (@MichaelAvenatti) April 10, 2019
According to the LA Times, Avenatti is facing 335 years in prison if convicted on all counts of his alleged crimes.
He’s also looking at another 47 years in a separate federal case in New York where he’s being charged with trying to extort more than $20 million from Nike.
Avenatti is currently free on a $300,000 bond.
In a series of tweets Thursday morning, he protested his innocence, arguing that he has “made many powerful enemies” over the past 20 years.
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.
— Michael Avenatti (@MichaelAvenatti) April 11, 2019
Avenatti said he would fight the charges and would plead “NOT GUILTY.”
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.
— Michael Avenatti (@MichaelAvenatti) April 11, 2019
He called the allegations that he withheld money from clients “bogus nonsense.”
Any claim that any monies due clients were mishandled is bogus nonsense. By way of example only (there are MANY more like this), here is a document Mr. Johnson signed less than a month ago attesting to my ethics and how his case was handled. I look forward to proving my innocence pic.twitter.com/tWL1aIuPy0
— Michael Avenatti (@MichaelAvenatti) April 11, 2019
Avenatti’s lawyer, John Littrell, told the Times: “We intend to fully investigate the charges and provide Mr. Avenatti the robust defense he deserves.”
U.S. attorney Nick Hanna meanwhile told the Times that Avenatti’s various alleged crimes “were all linked to one another.”
Avenatti would use money embezzled from clients to “string along” other victims to whom he owed money — all in an effort to keep his “financial house of cards from collapsing,” the U.S. attorney said.
The twin criminal cases have put Avenatti’s legal career in jeopardy just a year after he rocketed to fame as the hard-charging and telegenic attorney for adult-film actress Stormy Daniels in her battle to nullify a nondisclosure agreement with President Trump.
He lost both of her lawsuits, and Daniels now owes the president nearly $300,000 in legal fees, more than double the $130,000 in hush money that Trump paid her to keep quiet about their alleged 2006 affair.
Avenatti was feted by the mainstream media throughout 2018, making multiple appearances on the cable networks — especially on CNN, where he became a popular regular guest.
Fox News’ Tucker Carlson had a less favorable view of Avenatti, nicknaming him “Creepy Porn Lawyer” in 2018. While Carlson was interviewing Avenatti on his show, last September, Fox News featured chyrons that read, “CREEPY PORN LAWYER TOYING WITH 2020 RUN,” “DOES AMERICA WANT CREEPY PORN LAWYER AS PRES?” and “STORMY’S LAWYER AS CREEPY PORN PRESIDENT?”
today in @FoxNews chyrons pic.twitter.com/G4PMTyx059
— Oliver Darcy (@oliverdarcy) September 14, 2018
Last September, Avenatti expressed interest in running for president in 2020, but a few months later, he changed his mind “out of respect for my family.
Please see my statement below regarding 2020. pic.twitter.com/ztCfZUY6hA
— Michael Avenatti (@MichaelAvenatti) December 4, 2018
Photo credit: NEW YORK, NY – MARCH 25: Michael Avenatti, the former lawyer for adult film actress Stormy Daniels’ (Photo by Stephanie Keith/Getty Images)