Published: Sun, April 14, 2019
Global Media | By Garry Long

Feds to file new charges against Michael Avenatti

Feds to file new charges against Michael Avenatti

In the continuing saga of Michael Avenatti's fall from grace, a federal grand jury has indicted the Newport Beach attorney on 36 counts of fraud, perjury, failure to pay taxes, embezzlement, and other financial crimes.

A Santa Ana grand jury charged that Avenatti created an extensive network of shell corporations to embezzle millions of dollars from five of his clients, the Los Angeles Times first reported.

The announcement comes as Avenatti is facing other criminal charges for allegedly threatening Nike and trying to extort them for millions of dollars.

Prosecutors in the Central District targeted Avenatti with wire- and bank-fraud charges last month in a scheme that included allegations he stole funds from a client to pay off his own expenses. In one of those instances, he said, Avenatti took some $2.5 million of a client's settlement money and put it toward a private jet.

The indictment also accuses Avenatti of having failed to file multiple individual income tax returns, saying the last such return he filed with the IRS was in 2010.

When the IRS started garnishing the company's bank accounts, the indictment says, Avenatti ordered employees to deposit the stores' cash and credit-card receipts in new accounts under a new company name.

Amid the news reports, Avenatti said Thursday on Twitter that he intends to plead not guilty and "fully fight" the charges against him.

The 61-page Southern California indictment adds dozens of counts and details charges that carry a potential prison sentence of 335 years, prosecutors said. He was released on a $300,000 bond and told reporters after a court appearance that he is "highly confident" that he will be exonerated.

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The indictment came about three weeks after Avenatti, who gained national fame for representing adult film star Stormy Daniels in her litigation against Trump, was arrested in NY on two separate criminal complaints filed by federal prosecutors in NY and California. Cohen faces a three year prison sentence for his role in that scheme, which is still under investigation by federal prosecutors with the Southern District of NY. The aircraft has been seized by federal agents.

They threatened to go public unless Nike hired Avenatti to conduct an internal investigation for $15 million to $25 million, and paid an additional $1.5 million to the client, according to prosecutors.

The Social Security Administration ceased payments to Johnson two months ago, according to prosecutors.

Prosecutors also charged Avenatti with giving false testimony in a case involving the bankruptcy of his law firm Eagan Avenatti LLP.

Avenatti, 48, was arrested March 25 in NY on the Nike charge.

Avenatti capitalized on how the Stormy Daniels case raised his profile, repeatedly assailing Trump and his former attorney, Michael Cohen.

According to the indictment, Johnson's efforts to buy a house failed because Avenatti withheld the settlement money, and Avenatti lied to the U.S. Social Security Administration about the settlement to hide the embezzlement, leading the agency to cut off Johnson's benefits.

Listen to the Guys Who Law talk about Avenatti's troubles below!

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