Chatted attorney Michael Avenatti has been charged with aggravated identity theft and fraud for alleged kidnapping of a total of $ 300,000 by Stormy Daniels and spent on personal expenses such as airline tickets, hotels and restaurant delivery, and to finance his law firm.
Federal prosecutors in New York announced the latest allegations against the Newport Beach litigation shortly after ABC News reported that Avenatti should have been charged with further financial crimes. The 48-year-old lawyer faces a series of charges on both coasts, including wire fraud, bank fraud and extortion.
On Wednesday, a large jury also indicted Avenatti for attempting to extort the Nike shoe giant for $ 25 million and Daniels’ charges are separate from that case.
“Michael Avenatti has abused and violated a lawyer ‘s primary duty, his duty to his client,” US Manhattan attorney Geoffrey S. Berman said in a statement. “As stated, he used his position of trust to steal an advance on the client’s book deal. As alleged, he blatantly lied and stole from his client to maintain his extravagant lifestyle, including payment, among the another, of a monthly car payment on a Ferrari. Far from zealously representing his client, Avenatti, as stated, instead committed himself to a real deception and theft, victimizing rather than supporting his client. “
Avenatti has denied the latest charges.
“No money relating to Ms. Daniels has ever been appropriately appropriately or mistreated,” said Avenatti on Wednesday. “He received millions of dollars in legal services and we spent huge sums on expenses. He paid only $ 100.00 directly for everything he received. I can’t wait for a jury to listen to the evidence.”
“At no time was money stolen or abused,” he said written in a subsequent tweet. “I will be fully exempted once I have submitted the relevant emails, contracts, text messages and documents.”
According to the prosecution, Avenatti “stole a significant part” of Daniels’ advance on his book contract by falsifying his signature on a letter to his literary agent, asking the agent to send payments to a bank account controlled by Avenatti.
Once Avenatti received the money, prosecutors say, he used it to pay employees of his law firm and defunct coffee company, Global Baristas. Some of the funds owed to Daniels, identified as “Victim-1” in the judicial process, also went to a payment for luxury cars and dry cleaning of Avenatti.
“When [Daniels] asked for the status of [her] advance taxes, Avenatti has repeatedly lied [her], also stating that he was working to get commissions from [her] publisher, when, in truth and in fact, Avenatti had already received the fees and spent them on his own personal and professional expenses, “says the prosecution.
Prosecutors say that Avenatti stole around $ 300,000 from Daniels and did not refund his half of that money.
Tuesday, Avenatti say warned Twitterverse expected another accusation.
“I expect an indictment to be issued by SDNY in the next 48 hours, accusing me of arresting me in connection with my arrest in March. I intend to combat these bogus / legally groundless accusations and I will not be guilty of ALL EXPENSES. I am looking forward to the process where I can start deleting my name. “
According to the prosecution, Avenatti stole money from Daniels using a “trust fund for customers” which he created without his knowledge.
As previously reported by The Daily Beast, Avenatti is accused of abusing such bank accounts for stealing funds from clients, including beauty vlogger Michelle Phan and a paraplegic client named Geoffrey Johnson, and for hiding money from creditors and the bankruptcy court.
“According to the prosecution, Avenatti stole money from Daniels using a “trust fund for customers” which he created without his knowledge.“
Under the terms of his contract, Daniels was expected to receive an advance of $ 800,000, which was to be paid by a Manhattan publisher in four installments, court documents say. While Avenatti assisted Daniels in the negotiations, he said he would not accept payment for any work related to his book, the indictment notes.
However, prosecutors say that Avenatti “initiated a plan to defraud” Daniels by appropriately appropriating his second and third payments, which amounted to around $ 350,000 before the cut of his agent.
On July 19, 2018, Daniels opened a new bank account to receive the remaining payments under his contract. Ten days later, the actress asked Avenatti if she knew when her second book would arrive. Presumably he told Daniels “in the next two weeks” why “acceptance comes [of the manuscript]”.
Then, on July 31, Avenatti allegedly told Daniels’ agent to transfer the second payment to an “Avenatti & Associates – Attorney Client Trust” account. When the agent said that the payment would not have been redirected without Daniels ‘permission, Avenatti would have emailed the agent a letter that appeared to contain Daniels’ signature.
Between August 1 and August 3, 2018, Avenatti deposited approximately $ 148,750 into the customer’s trust account.
According to the prosecution, approximately $ 57,000 of that money went to the payroll of his former company, Eagan Avenatti LLP, and $ 20,000 was spent on insurance, airline tickets, hotels, auto services, restaurants and meal delivery and online retailers.
Avenatti is also accused of using Daniels’ money to transfer $ 1,900 to a client who has filed a lawsuit in California. (While the client has not been named in the indictment, it appears to be Geoffrey Johnson, who won a $ 4 million settlement from Los Angeles County for his injuries in a prison. California prosecutors say Avenatti “has emptied all proceeds from the transaction “because of Johnson and used it for his personal expenses, but sent Johnson payments of $ 1,000 to $ 1,900.” In the meantime, $ 12,800 of Daniels’ money went to the Avenatti coffee business.
“Daniels informed Avenatti that he had not yet received his second payment and asked for help, unaware that the lawyer had already pocketed the money.“
In late August 2018, Daniels informed Avenatti that he had not yet received his second payment and asked for help, unaware that the lawyer had already pocketed the money, prosecutors say. Daniels sent an email to Avenatti on September 4 with his new bank account information for the publisher, the prosecution said.
The next day, Avenatti received around $ 250,000 in another account he controlled called “Esq Michael Avenatti Trust Account”, which at the time had a balance hovering around zero, prosecutors say.
Avenatti transferred about $ 148,750 from this account to Daniels, so “he would not be aware that Avenatti had converted and used the proceeds from the second payment for his personal and commercial purposes,” the prosecution said.
On September 13, Avenatti contacted Daniels’ agent and suggested that the publisher pay for his third book in advance. The publisher agreed to transfer an advance payment to Avenatti’s client’s trust account on September 17, according to the prosecution.
Once Avenatti received the money, the lawyer used it “to pay around $ 11,000 to people that Avenatti had dealings with” and $ 3,900 for a monthly lease on a Ferrari, court documents say.
The Avenatti would also have invested $ 15,000 in Daniels funds on airline tickets, dry cleaning, hotels, restaurants and car services. And about $ 56,000 went to Eagan Avenatti’s payroll, $ 12,000 to Avenatti’s law firm insurance, and $ 1,900 to another payment to a California client.
“The Avenatti would also have invested $ 15,000 in Daniels funds on airline tickets, dry cleaning, hotels, restaurants and car services.“
On October 1st, the day before Daniels’ book hit the shelves, he asked her if it would be paid for. The next day, Daniels sent Avenatti a message, “The publisher owes me a payment today”, to which he replied: “About it. We have to make sure we meet the advertising requirements.”
From October 2018 to February 2019, Daniels repeatedly asked Avenatti via telephone and electronic messages to receive help in receiving his book in cash, according to the prosecution.
But as accused of doing in other cases, Avenatti passed the blame on to the party responsible for the payment.
As the weeks passed, Avenatti allegedly told Daniels that it was the publisher who kept his money, in part because of the slow sales of the books.
“When is the publisher going to cough up my money?” Daniels asked on December 5th.
“As for the publisher, by working on them and threatening litigation. They have to pay you money while you did your part and then some, “replied Avenatti.
On December 27, Daniels told Avenatti that he would send the publisher a certified letter requesting payment and firing his agent. “Then I could publish it online for fun,” joked Daniels.
Avenatti allegedly called Daniels, however, and dissuaded her from handing over the letter and firing her agent, saying she might need help from the agent in a lawsuit against the publisher to recover her payments.
Sometimes in December, prosecutors say, Daniels’ manager sent an email to his publisher and agent, stating that he had not received his third payment. As a result, the agent called Avenatti, who allegedly warned the agent not to respond, since he was dealing directly with Daniels on the matter, the prosecution said.
Daniels continued to ask Avenatti for the status of the money throughout January and February, and again accused “bad sales” of the publisher’s alleged reluctance to pay.
In February, Daniels eventually spoke to a representative of the publisher, who said Daniels’ money had been sent to his agent. According to the court filing, the agent sent Daniels documentation of the false instructions on the wire, along with proof that his third payment was transferred to the trust account of Avenatti’s client.
The news follows a Vanity Fair profile on the fall of Avenatti from the dear and self-appointed presidential media candidate to a dishonored lawyer accused of stealing client funds.
Avenatti told the magazine that he had seen an “opportunity” in Daniels’ case against Trump.
“When I met Stormy, I saw an avenue through which I could have done collateral damage to Donald Trump and the people around him for what seemed to me to be illegal conduct and rigging the presidential election,” Avenatti said in the interview. “I saw it as an opportunity to do something that was right, right and basically go all in.”
In November, Daniels told The Daily Beast that Avenatti had ignored his financial accounting requests for his legal fund and that he had launched a second crowdfunding website without telling him.
It is unclear whether the new charges are related to the fundraising effort.
“For months, I have asked Michael Avenatti to provide me with accounting information about the fund my backers have so generously donated to for my safety and legal defense,” Daniels said in a note in November. “He has repeatedly ignored those requests. Days ago I asked again and again to tell me how the money was spent and how much was left. Instead of answering me, without my permission or even my knowledge, Michael launched another crowdfunding campaign to raise funds on my behalf. I learned it on Twitter. “
In response, Avenatti denied keeping Daniels’ accounts.
“I’ve always been an open book with Stormy on all aspects of her cases and she knows it,” Avenatti said in a statement. “The Stormy Retention Agreement signed in February provided that it would pay me $ 100.00 and that all other funds raised through a legal fund would go towards my legal fees and expenses. Instead, the vast majority of the money raised went towards its security and other similar expenses. The most recent campaign was simply an update of the previous campaign, designed to help meet some of Stormy’s expenses. “