Another client Avenatti allegedly swindled a settlement from is Greg Barela, who invented some kind of floor paving system which he shared with some guys named Daniel Sawyer and Richard Runkles who worked with a company called Brock, LLC in Boulder, CO. According to pleadings in a civil lawsuit filed against Brock in federal court in LA (15-cv-00779-JVS-JCG), Barela thought Brock was going to invest in his inventiond but Brock ended up with the patent (here's one version of it). The case got tossed to arbitration. Avenatti apparently got a $1.9 million settlement from Brock (or the people he dealt with there, for Barela who paid $1.6 million of it but Avanatti never gave Barela his share. Instead, Avenatti allegedly misappropriated it and then told Barela that Brock had never paid. Barela got a new lawyer who obtained proof Brock had been paying the settlement as agreed. Barela's new lawyers went to the FBI and the rest is in the Indictment.
The charges against Avenatti include:
- 18 U.S.C. §1343: Wire Fraud;
- 26 U.S.C. §7202: Willful Failure to Collect and Pay Over Withheld Taxes;
- 26 U.S.C. §7212(a): Endeavoring to Obstruct the Administration of the Internal Revenue Code;
- 26 U.S.C. §7203: Willful Failure to File Tax Return;
- 18 U.S.C. §1344(1): Bank Fraud;
- 18 U.S.C. §1028A(a) (1) Aggravated Identity Theft;
- 18 U.S.C. §152(3): False Declaration in Bankruptcy;
- 18 U.S.C. §152(2): False Testimony Under Oath in Bankruptcy;
- 18 U.S.C. §2(b): Causing an Act to Be Done;
- 18 U.S.C. §981 (a) (1) © , 982, 1028 and 28 U.S.C, §2461©: Criminal Forfeiture
Avenatti posted on his twitter feed earlier today that he is innocent until proven guilty (very true) and that parapalegic Johnson very recently signed an endorsement of his legal services. (Reading it, it doesn't seem to be written for a specific purpose other than a marketing testimonial -- I couldn't help but wonder if Avenatti paid him to write it.) Johnson's new lawyers say Avenatti ruined Johnson's life and that he is cooperating with the Government:
Mr. Johnson is the victim of an appalling fraud perpetrated by the one person who owed him loyalty and honesty most of all: his own lawyer. Mr. Avenatti stole millions of dollars that were meant to compensate Mr. Johnson for a devastating injury, spent it on his own lavish lifestyle, then lied about it to Mr. Johnson for years to cover his tracks. His actions have left Mr. Johnson destitute. Mr. Johnson is cooperating fully with the government’s investigation, and hopes that justice will be done in this case. In the meantime, he asks respect for his privacy.”
What a spectacular fall. I don't see how Avenatti comes out on top in this one, facing charges on both coasts, plus having just agreed to be relieved of his position as lead counsel for successful plaintiffs in a $454 million verdict (later reduced by a few hundred million by the judge and now on appeal -- Bahamas Surgery Center, LLC v. Kimberly-Clark Corporation (14-cv-08390, CD.CA)), and a $5 million personal judgment against him by one of the lawyers who worked for his firm Eagan Avenatti, and on and on.
Personally, I have never been able to watch Avenatti due to his abrasive, cocky manner. His message never came through the shouting and boasting and threats. Despite whatever suit he's wearing, he still comes across to me like the classic stereotype of a used car salesman.
He apparently really did have a successful law practice at one time. I think he just let his big mouth and ego squander it all away.
If he has any rabbits left in his hat, he better pull them out now. Even without pre-judging him on the criminal charges which paint him as the Ponzi lawyer of the decade, I think he's about to find out that it's a hard rain's a-gonna fall.
I wonder if he has sufficent funds left for legal fees for a case of this magnitude --or the Nike case in New York. I can almost see him deciding to represent himself rather than going with the Federal Defender. That would be his biggest mistake yet.
