High-profile attorney Michael Avenatti has been indicted on 36 counts of fraud, tax offenses, and other financial crimes, California federal prosecutors announced Thursday.
These grand jury charges are in addition to the federal wire fraud and extortion charges for which the lawyer was arrested in New York last month.
"The criminal charges in the indictment address four areas of wrongdoing," the Central District of California US Attorney's Office said in the news release. "The embezzlement of millions of dollars that should have been paid to clients, the failure to file income tax returns and failure to pay the IRS millions of dollars in taxes, the submission of fraudulent loan applications that included tax returns never filed with the IRS, and the concealment of assets from the bankruptcy court."
The lawyer is best known for representing Stormy Daniels, the adult film star who said she had a sexual relationship with Donald Trump. He became a cable news fixture in her legal fight to get out of a 2016 settlement that barred her from discussing her alleged relationship with Trump in exchange for $130,000. The payment came from Trump's longtime personal attorney, Michael Cohen, who has since pleaded guilty to arranging to payments to Daniels and another woman in order to keep stories of their alleged affairs with Trump from becoming public before the 2016 election.
Avenatti also represented Julie Swetnick, who accused Supreme Court Justice Brett Kavanaugh of sexual misconduct, only to later walk back some of the allegations.
If convicted of the charges filed against him on Thursday, Avenatti could face 335 years in federal prison.
Attorney Michael Avenatti named in federal grand jury indictment that accuses him of stealing millions of dollars from clients https://t.co/126oHyy8mI
Among the many charges in the 61-page indictment is the allegation that Avenatti stole millions of dollars from four clients, including Geoffrey Ernest Johnson. Johnson, who has a mental illness and paraplegia, received a $4 million settlement in 2015 that Avenatti is accused of concealing from him for years.
Avenatti allegedly used the settlement to fund his personal businesses. In lieu of paying out the sum to his client, he paid for Johnson's assisted-living facility and occasionally sent him "advances" of a few thousand dollars, authorities said.
Avenatti also allegedly stole from another client's settlement payment in 2017 and used the money to purchase an airplane, ostensibly for one of his private businesses. Federal authorities seized the jet on Wednesday.
The lawyer is also accused of filing fraudulent tax returns for his businesses, lying on his personal income taxes, and pocketing payroll taxes that had been withheld from his employees.
"These four areas of criminal conduct alleged in the indictment are all linked to one another because money generated from one set of crimes appears in other sets — typically in the form of payments to lull victims and to prevent Mr. Avenatti’s financial house of cards from collapsing,” US Attorney Nick Hanna said Thursday.
Avenatti posted a series of tweets Thursday proclaiming his innocence in response to the indictment being made public.
"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," he tweeted.
The lawyer also posted what he said was a letter signed by Johnson, the client he is accused of stealing from in the indictment.
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
Avenatti is currently freed on a $300,000 bond, which he paid after his related arrest in New York City in March. He will appear for arraignment in the US District Court in Santa Ana on April 29.
