Sunday, June 4, 2023 | Back issues
Courthouse News Service Courthouse News Service

Feds Charge Lawyer Avenatti With Defrauding Stormy Daniels

MANHATTAN (CN) — Over a year after his representation of porn actress Stormy Daniels made him a household name, lawyer Michael Avenatti was hit with new federal indictments, one of which charges him with trying to rip Daniels off.

“Michael Avenatti abused and violated the core duty of an attorney – the duty to his client," U.S. Attorney Geoffrey Berman said in a statement. “As alleged, he used his position of trust to steal an advance on the client’s book deal. As alleged, he blatantly lied to and stole from his client to maintain his extravagant lifestyle, including to pay for, among other things, a monthly car payment on a Ferrari. Far from zealously representing his client, Avenatti, as alleged, instead engaged in outright deception and theft, victimizing rather than advocating for his client.”

Though the indictment identifies the client only as Victim-1, the details refer clearly to Daniels, whom Avenatti represented last year in a drawn-out court battle over an alleged affair with President Donald Trump.

Daniels sued Trump to nullify a $130,000 hush-money payment she accepted ahead of the 2016 election, blowing the lid off a scandal that ultimately implicated Trump and his longtime fixer Michael Cohen in campaign-finance violations.

Today's indictment, signed by U.S. District Judge Deborah Batts, says Avenatti helped Daniels secure a book contract, then used the advance on personal expenses, including luxury car payments, hotels, airfare, meals, dry cleaning and even employee salaries at his law firm.

Prosecutors say Avenatti improperly siphoned approximately $300,000 from Daniels, and has not repaid her half of that money.

Avenatti denied the allegations.

“No monies relating to Ms. Daniels were ever misappropriated or mishandled,” he tweeted. “She received millions of dollars worth of legal services and we spent huge sums in expenses. She directly paid only $100.00 for all that she received. I look forward to a jury hearing the evidence.”

Apart from the charges related to Daniels, U.S. District Judge Paul Gardephe signed a second indictment today that accuses Avenatti of extortion.

These charges build off an earlier indictment Avenatti faces in New York, where prosecutors say he tried to extort up to $20 million from Nike by threatening to expose claims that the shoemaker steered high school basketball players with payments to colleges it sponsored.

Avenatti is also charged in California with stealing more than $12 million in settlements meant for his clients and using the money to finance lavish personal expenses, including a $5 million jet in Los Angeles, his now-defunct coffee company and a racing team.

Avenatti has denied the allegations against him.

The lawyer tweeted Tuesday that he intends on "fighting these bogus/legally baseless allegations, and will plead not guilty to ALL CHARGES," and that he looks "forward to the trial where I can begin to clear my name.”

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.