Michael Avenatti Faces 36 New Counts and Up to 335 Years in Prison

Michael Avenatti Faces 36 New Counts and Up to 335 Years in Prison

In the continuing saga of Michael Avenatti’s fall from grace, a federal grand jury has indicted the Newport Beach attorney on 36 counts of fraud, perjury, failure to pay taxes, embezzlement, and other financial crimes.

The Santa Ana grand jury outlined serial abuses of power, alleging that Avenatti stole millions of dollars from five of his own clients. Perhaps the most striking detail of all, however, is the potential consequence for his alleged crimes: 335 years in prison, if convicted on all counts.

“For 20 years, I have represented Davids vs. Goliaths,” the self-described “Fighter for Good” tweeted in response to the new charges. “Along the way, I have made many powerful enemies. I am entitled to a FULL presumption of innocence and am confident that justice will be done once ALL of the facts are known.”

For 20 years, I have represented Davids vs. Goliaths and relied on due process and our system of justice. Along the way, I have made many powerful enemies. I am entitled to a FULL presumption of innocence and am confident that justice will be done once ALL of the facts are known.

— Michael Avenatti (@MichaelAvenatti) April 11, 2019

I intend to fully fight all charges and plead NOT GUILTY. I look forward to the entire truth being known as opposed to a one-sided version meant to sideline me.

— Michael Avenatti (@MichaelAvenatti) April 11, 2019

One of Avenatti’s “Davids,” Geoffrey Ernest Johnson, who lives with mental illness and paraplegia, won a $4 million settlement in a suit against Los Angeles County. The money was wired to Avenatti in 2015, according to details of the indictment first reported by the Los Angeles Times. For years, Avenatti hid the money from Johnson, who relies on disability payments, spending the entire sum in over five months.

In 2018, Johnson asked Avenatti to send details of the settlement to the Social Security Administration to determine his eligibility for disability payments. Avenatti, “knowing full well that the requested information could lead to inquiries that could reveal” his fraud, ignored the request.

The Social Security Administration ceased payments to Johnson two months ago, according to prosecutors.

Avenatti already faces a separate federal case in the Southern District of New York, where he has been charged with attempted extortion, wire fraud, and bank fraud. In legal filings in that case, prosecutors allege that the lawyer defrauded clients, employees, and banks to fund an unsustainably lavish lifestyle of sports cars, luxury watches, and private jets.

Those charges are echoed in today’s grand jury indictments, which allege that Avenatti took a $2.75 million legal settlement owed to another client and purchased a $2.5 million private jet. Federal agents seized the Honda HA-420 jet at its Santa Barbara hanger on Wednesday.

“Michael Avenatti allegedly stole from his clients, and he stole from the IRS,” said Ryan L. Korner, the chief of Internal Revenue Service criminal investigations in Los Angeles. “The money was used to fuel a lavish lifestyle that had no limits, including making mortgage payments on a multimillion-dollar home in Laguna Beach and purchasing a private plane.”

While Avenatti suggests that the cases against him have political motivations stemming from his representation of Stormy Daniels, prosecutors note that an inquiry into Avenatti was opened prior to Donald Trump’s election.

“It is lawyer 101: You do not steal your client’s money,” Nicola T. Hanna, the United States attorney in Los Angeles, said at a news conference Thursday. “Money generated from one set of crimes was used to further other crimes, typically in the form of payments used to string along victims so as to prevent Mr. Avenatti’s financial house of cards from collapsing.” Essentially, it resembled a Ponzi scheme.

“This case is based on the facts and the documents,” Hanna said.

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