Avenatti Pleads Not Guilty to Defrauding Stormy Daniels

Stormy Daniels, accompanied by her attorney Michael Avenatti, left, leaves federal court in New York on April 16, 2018. (AP Photo/Seth Wenig, file)

MANHATTAN (CN) – Appearing in the same courthouse where he once represented the adult film star, celebrity attorney Michael Avenatti told a federal judge Tuesday that he will fight charges that he tried to rip off Stormy Daniels.

“Your honor, he enters a plea of not guilty,” Avenatti’s attorney Sylvie Levine said this morning.

Hours later, in a different New York federal courtroom, Avenatti spoke for himself to deny separate allegations that he extorted Nike.

“One hundred percent not guilty,” Avenatti defiantly recited four times, one for each count of extortion and conspiracy against him in that case.

Bail packages in both cases allow Avenatti to travel freely in the United States with prior notification to pretrial services. On the Stormy case, U.S. Magistrate Judge James Cott set a $300,000 bail package — the exact amount prosecutors accuse Avenatti of diverting from a publishing advance Daniels secured through a book deal.

“It’s a straightforward fraud,” Assistant U.S. Attorney Matthew Podolsky told the court.

Avenatti’s bail terms mandate that he must have “no contact with Victim-1.” 

Though court documents shield the name of the client, Avenatti’s other attorney Scott Srebnick spelled out the obvious that the person is “Ms. Daniels.”

“We all who it is,” Srebnick said. “It’s not a secret.”

The first time that Avenatti appeared in the Southern District of New York, he had been representing Daniels in a discovery dispute involving President Donald Trump’s former fixer Michael Cohen. Both became household names in the high-stakes battle whose mark on the White House is still apparent.

Since that time, their fortunes dramatically changed. Daniels renounced Avenatti this past March, claiming that he dealt with her “extremely dishonestly.” Avenatti meanwhile has a full slate of appearances in the Southern District of New York today, not as a counsel but as a criminal defendant. 

In a prepared statement this afternoon, Avenatti suggested — but stopped short of directly alleging — that his prosecution is political.

“I am now facing the fight of my life against the ultimate Goliath, the Trump administration,” he said. “I intend on fighting these charges, and I look forward to a jury verdict in each of these cases.”

Avenatti took no questions at this impromptu press conference outside the courthouse, where he was flanked by his attorney Srebnick.

Levine, a lawyer with the Federal Defenders of New York, said she was representing Avenatti for his arraignment only. Judge Cott ordered Avenatti to produce a financial affidavit if he wishes to continue retaining a public defender.

Srebnick is defending Avenatti against separate charges that he extorted Nike, but he appeared reluctant to take on the new case related to Daniels.

At a hearing before U.S. District Judge Deborah Batts this afternoon, Srebnick announced his intention to try transferring the latest case to California, where Avenatti faces similar charges that he defrauded five other clients out of settlement money.

“This is the sixth client that the government alleges has been defrauded through the same modus operandi,” Srebnick said, adding that three federal indictments are stretching his Los Angeles-based client thin.

“It just makes eminent sense for this case to be transferred to California,” he said. “It’s a very rare situation.”

Assistant U.S. Attorney Matthew Podolsky countered that the case, involving a New York-based publisher and literary agent, belongs exactly where it was charged.

“There’s no likelihood of success on the merits on the motion to transfer this case,” Podolsky said.

“This is clearly a delay tactic,” the prosecutor added later.

If Srebnick wishes to engage in this fight, he must formally enter the case.

“The motion to make the motion is denied,” Judge Batts ruled, ordering Avenatti to retain counsel before his next hearing on June 18.

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