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Jury finds Avenatti guilty of stealing from Stormy Daniels

Deliberations concluded after 13 hours in the criminal trial pitting attorney Michael Avenatti against his porn star former client.

MANHATTAN (CN) — Disgraced celebrity attorney Michael Avenatti was found guilty Friday afternoon of wire fraud and identity theft for having helped himself to nearly $300,000 from a publishing advance paid to his former client Stormy Daniels.

Avenatti faces up to 22 years in prison after he was convicted on both counts. The sentencing is set for May 24, but Avenatti has agreed to surrender himself to U.S. marshals in California by Monday, Feb. 7, by 5 PST.

Leaving the courthouse on Friday afternoon, Avenatti soberly told reporters he is "very disappointed in the jury's verdict" and is "looking forward to a full adjudication of all issues on appeal."

Across five days of witness testimony last week, federal prosecutors showed text messages and bank records to demonstrate how Avenatti steered two separate $148,750 installments of Daniels’ publishing advance to a trust account he controlled.

The jury commenced deliberations Wednesday afternoon after closing arguments from the government and Avenatti, who represented himself after firing his public defenders.

Before returning with a verdict, the jury sent a note on Thursday morning to U.S. District Judge Jesse Furman signaling that they were deadlocked on the fraud count. Furman told jurors it was too early for them to remain deadlocked and instructed them to “keep at it.” Three hours later on Thursday, the jury returned a second note seeking the full transcript of Daniels’ entire two-day trial testimony, along with a definition of “good faith” as it applies in this case.

Avenatti has insisted he had permission from Daniels to pocket some of the $800,000 advance on her autobiography, “Full Disclosure.” Daniels testified that he did not.

The verdict form in the trial reminded jurors that if they acquit on the wire fraud count, then they also must acquit on aggravated identity theft count. Wire fraud carries a maximum sentence of 20 years in prison, while the second count carries a mandatory consecutive term of imprisonment of two years.

During summations on Wednesday morning, Avenatti told jurors that he and his firm had spent millions of dollars “to the benefit of Ms. Daniels.”

He said that if the jury concludes that he held a “good-faith belief” at the time that he should be compensated for the work he and his firm did in 2018 to make Daniels a household name and published author, then they should acquit him.

“A good-faith belief, ladies and gentlemen, is a complete defense to all of these charges. It’s game over for the government,” Avenatti said on Wednesday.

“Let me be clear, Michael Avenatti never committed the crime of wire fraud. Michael Avenatti never committed the crime of aggravated identity theft,” he had said, referring to himself in the third person. "There is insufficient evidence, ladies and gentlemen, to show that Michael Avenatti, ever intended to defraud Ms. Daniels.”

The 12-person jury was comprised of seven women and five men.

Assistant U.S. Attorney Robert Sobelman instructed jurors on Wednesday to follow Avenatti by his own trail of text messages, bank statements and lies.

“They traveled and appeared on television together. He was supposed to be her advocate. But the defendant betrayed her trust. He stole from her and lied to her over and over and over again,” Sobelman said.

Daniels spent two days on the stand as the prosecution’s star witness, telling jurors last week that she had hired the California lawyer in early 2018 to represent her in her claims against former President Donald Trump. Daniels wanted out of a nondisclosure deal with Trump so she could speak publicly about having a sexual tryst with him. Trump has denied the claims.

On direct questioning last Thursday, Daniels explained that, of the four advance payments from her publishing deal with St. Martin’s Press, Avenatti diverted the second and third deposits from her literary agent into a separate trust account and lied to her for months about the status of those payments.

Daniels testified Avenatti told her he wouldn’t “take one penny” of her book payments because that was money she had earned.

The case of Daniels' book was Avenatti’s third criminal trial in two years, his second in New York's Southern District.

About seven months ago, he was sentenced to 2 1/2 years in federal prison for trying to extort Nike, also in the Southern District of New York.

In the interim, there was a mistrial in California on unrelated charges that accused Avenatti of cheating five of his clients out of nearly $10 million.

U.S. District Judge James V. Selna ruled the California case a mistrial on technical grounds that prosecutors had violated their obligation to disclose all evidence that might be favorable to the defendant.

Avenatti represented himself in those proceedings as well and is awaiting retrial.

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