MANHATTAN (CN) — Opening arguments commenced Monday in a fraud case against disgraced attorney Michael Avenatti, who returned to Southern District of New York to face his second criminal trial here in as many years.
“This is a case about lawyer who stole from his client, a lawyer who lied to cover up his scheme,” Assistant U.S. Attorney Andrew Rohrbach said Monday morning.
Avenatti went from representing celebrities to becoming one in his own right four years ago while representing Stormy Daniels as the adult film star fought to terminate a hush-money deal that barred her from going public about her alleged sexual relationship with the 45th American president, Donald Trump, before he took office.
Today, the once high-profile California attorney now occupies the defendant's chair in New York City on a criminal indictment alleging one count of wire fraud and one count of aggravated identity theft. Prosecutors say Avenatti faked Daniels’ signature so that multiple payments advanced by publishers as part of Daniels' 2018 book deal, totaling nearly $300,000, went to his bank account instead of hers.
"Ms. Daniels has a lot of jobs: she’s an entertainer, she’s been in adult films, she’s on a show about paranormal activity, but adult actresses and paranormal investigators can be victims of fraud and identity theft, just like anyone else,” Rohrbach said during the government's 20-minute opening argument. “This case is not about her job, what she does for money, it’s about a fraud that was committed.”
The government says Avenatti spent Daniels’ book advance money on personal airfare and his firm’s payroll. “He spent it on travel, on food and at Starbucks and other personal expenses,” federal prosecutors said in their opening argument Monday.
Daniels, whose real name is Stephanie Clifford, is expected to testify as the government's star witness no earlier than Tuesday.
Avenatti, 50, has pleaded not guilty to the charges in what will be his third criminal trial in two years, his second in this district.
“I am completely innocent of these charges,” Avenatti said over the weekend in a statement through a publicist. “The government is spending millions of dollars to prosecute me for a case that should have never been filed. Meanwhile, they continue to allow Trump and his co-conspirators to walk free and suffer no consequences for their criminal conduct. That is not justice.”
During the defense’s opening argument on Monday, Avenatti’s federal defender Andrew Dalack insisted that the trial boils down to “a disagreement over money, not a federal crime.”
Earlier during his 20-minute opening remarks, Dalack told jurors that the conflict between Avenatti and Daniels is actually “a fee dispute between an attorney and his disgruntled former client who wanted all the benefits of zealous, fierce and loyal representation without having to pay.”
Dalack said on Monday that Avenatti’s fee agreement with Daniels entitled him to “compensation for his work on Ms. Daniels’ behalf and reimbursements for costs and expenses associated with his legal representation.”
“Perhaps most importantly to this case, the fee agreement made it perfectly clear in black and white, that in the event Mr. Avenatti assists Ms. Daniels in finalizing any book or media opportunity that results in Ms. Daniels being paid, Mr. Avenatti and Ms. Daniels agree that Mr. Avenatti shall be entitled to reasonable percentage to be agreed upon,” Avenatti’s defense said Monday.
“Whatever her problem was, she went to Michael,” Dalack said of Avenattti’s “unrivalled commitment” to his then-client Daniels in 2018. “He transformed a rather obscure adult performer into a household name.”
“You will hear that Mr. Avenatti advanced Ms. Daniels hundreds of dollars of his own money for all sorts of things: to pay for her personal security on end, to buy a car, to obtain possible blackmail material,” Dalack told jurors.
Daniels’ 2018 memoir, “Full Disclosure” published in the fall of 2018, details her alleged encounter with Trump in 2006 and the subsequent hush-money payment facilitated by Trump’s then-personal attorney and fixer Michael Cohen ahead of the 2016 election.
Cohen would later plead guilty to making payments with the intent of influencing a federal election, but Trump denies that he and Daniels ever had sex.
Cohen, who served a year behind bars on his guilty plea before finishing his three-year prison term at home, attended Monday’s opening arguments, which were held in-person in Manhattan federal court where all parties and attendees are required to wear N95 or KN95 face masks due to the recent surge of the Covid-19 omicron variant.
Freelance court reporter Victoria Bekempis tweeted on Monday that Cohen nodded in response when Avenatti saw him and inquired about his "Donald Trump kneepads."
A recent Politico profile quotes Avenatti as griping about the contrast between his miserable pretrial detention in a Manhattan jail complex while Cohen served out his own house arrest in his “multimillion-dollar luxury apartment ... with his Miró fucking painting on the wall behind him when he does his YouTube interviews and his cable TV hits.”
Before he was charged over the book-advance theft, Avenatti was indicted in March 2019 for trying to extort Nike. He was sentenced on those charges to 2 1/2 years in prison, then brought to California for yet another case that ended in a mistrial.
Avenatti's latest trial is expected to last two weeks. On the stand this afternoon is literary agent Luke Janklow, whose company Janklow & Nesbit Associates arranged Daniels’ $800,000 deal for “Full Disclosure.”
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