Michael Avenatti charged with 36 counts: Embezzlement, fraud, cheating on taxes

Posted April 14, 2019

Michael Avenatti was indicted Thursday on 36 charges of tax fraud, bribery and embezzlement, including in a case in which the embattled celebrity lawyer allegedly hid $4 million of settlement money from a mentally ill, paraplegic client.

According to the LA Times, Avenatti stole millions of dollars from five clients by using a web of shell companies and bank accounts to cover his alleged misdeeds.

But the charges handed down Thursday are only part of Avenatti's troubles.

The indictment said Avenatti stole millions of dollars from five clients through a group of shell companies and bank accounts to make it more hard to track.

The new indictment also alleges that Avenatti failed to file personal income tax returns for four years and failed to filed tax returns for his two law firms for three years. The report, which cited the indictment, said Avenatti received the money from LA county in 2015 but did not tell Johnson about it.

More news: "Avengers: Endgame" Pre-Sale Numbers Obliterate The Competition

U.S. Attorney Nick Hanna says the four areas of alleged criminal conduct are all linked to each other because money generated from one set of alleged crimes appears in other sets of alleged crimes.

Prosecutors from the Southern District of NY said in a charging document that Avenatti tried to get the money by "threatening to use his ability to garner publicity to inflict substantial financial & reputational harm on the company if his demands were not met".

According to the Los Angeles Times, Avenatti faces as many as 47 years in prison if he is convicted on charges of attempting to extort millions of dollars from Nike. He was released Thursday on $300,000 bond, The Los Angeles Times reported.

The indictment came about three weeks after Avenatti, who gained national fame for representing adult film star Stormy Daniels in her litigation against Trump, was arrested in NY on two separate criminal complaints filed by federal prosecutors in NY and California. The charges could carry a potential prison sentence of 335 years in prison.

Attorney Ron Hodges says Avenatti, his client, asserted his 5th Amendment right against self-incrimination and didn't testify. But Avenatti denied to the client that the total settlement had already been paid, the indictment reads. Johnson was referred to as "Client 1" in the indictment, but was named at a recent court hearing involving the money Avenatti was ordered to pay his former partner.

More news: Crude Oil Bulls Seeing Few Clouds on the Horizon

In 2018, Johnson asked Avenatti to send details of the settlement to the Social Security Administration to determine his eligibility for disability payments.

Hanna said the Avenatti case "has nothing to do with anything political or with anything else". He was charged in a criminal complaint in Santa Ana, California, on March 25 for stealing a different client's $1.6 million settlement to cover his own expenses, as well as cheating a MS bank.

Avenatti became a prominent critic of Trump and a frequent guest on cable television news while representing Daniels, whose real name is Stephanie Clifford.

He falsely told Johnson the payments were "advances" on a county settlement payment that had not yet arrived, according to the grand jury. Avenatti is accused of having the money wired to him and hiding it from the victim for years.

Listen to the Guys Who Law talk about Avenatti's troubles below!

More news: Watch SpaceX's Falcon Heavy Launch Right Here