SANTA ANA, Calif. (CN) – Attorney Michael Avenatti appeared in a Southern California federal court on Monday, not as a lawyer but as a defendant facing bank and wire fraud charges.
Before he was indicted in California and New York this past week on extortion and fraud charges, Avenatti made a name for himself as an attorney who would fight for his clients in and out of the courtroom. One of those fights included an adult film star's legal battle with the president of the United States.
“I have represented Davids versus Goliaths as an attorney. Throughout that entire time period, I have relied upon the justice system and judges sitting in courthouses just like this,” said Avenatti after his initial appearance before U.S. Magistrate Judge John Early on the bank and wire fraud charges filed last week in the Central District of California.
“I will now spend time in connection with this case and the case in New York relying on that same justice system that I have subjected myself to, and I am highly confident that when the process plays out that justice will be done,” he added before being cut short by a man shouting “lock him up” from the sidewalk.
The man did not give his name to the press and quickly walked away from the courthouse.
Federal prosecutors in New York accuse Avenatti of trying to shake down Nike for $20 million. They say Avenatti demanded a $12 million retainer at a meeting with Nike’s lawyers, which was recorded consensually, and that the other participants responded Nike had never done an investigation that “breaks $10 million.”
Avenatti, 48, allegedly threatened Nike’s attorneys over the phone the next day, saying, “I’ll go take $10 billion off your client’s market cap … I’m not fucking around,” according to prosecutors.
Federal prosecutors in California say Avenatti did not pay out a $1.6 million settlement to a client he represented in an intellectual property suit. They say Avenatti then falsified a document to give the client an incorrect due date on when they could expect their settlement.
Authorities also accuse Avenatti of telling a bank he paid $1.6 million in estimated tax payments in 2012 to the Internal Revenue Service, and $1.25 million in estimated tax payments in 2013. He fraudulently received a $4 million loan as a result of that application, according to an agent with the Internal Revenue Service.
Avenatti also inflated his adjusted gross income in tax years 2011 through 2013, prosecutors say.
After a brief appearance Monday, Early ordered Avenatti to return to court April 29 for a post-indictment arraignment. The terms of Avenatti’s release in New York – in which he paid $300,000 bail – apply in the California case, and he has been barred from contacting any possible witnesses or victims in the cases.
Avenatti is represented by John Littrell of Bienert, Miller and Katzman, who said he would file a waiver so his client does not have to appear in person later this month. He also said Avenatti will plead not guilty.
Avenatti became a permanent fixture on cable news programs last year during his representation of adult film star Stormy Daniels, real name Stephanie Clifford, in her effort to dissolve a hush agreement over an alleged affair with now-President Donald Trump in 2006. The contract agreement was brokered by Trump’s former personal attorney Michael Cohen in 2016, shortly before the presidential election.
Daniels’ case was thrown out of court and has since dropped Avenatti from her legal team.
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