Michael Avenatti Indicted in California

Lawyer and TV pundit Michael Avenatti has been charged in federal court in Los Angeles with 36 counts of fraud, tax crimes, obstruction and related offenses. The charges principally relate to his use of settlement money received for clients for his own use, and failing to pay his taxes. The U.S. Attorney's long announcement is here. The even longer Indictment is here.

There are four clients highlighted in the charges "client 1" client 2 client 3 and client 4. Client 1 is a parapalegic for whom he (and co-counsel) obtained a $4 million settlement from the City of Los Angeles. The unnmamed client is Geoffrey Ernest Johnson. The case is 13-cv-04496-MMM-AJW in the U.S. District Court for the Central District of California. In one pleading I read, Doc. 119, Avenatti and cocounsel describe their client:

Plaintiff is a paraplegic who sustained his life altering injuries while in Defendants’ custody at the Twin Towers Correctional Facility. Plaintiff sustained his injuries when he attempted to commit suicide for a second time while in Defendants’ custody. Both times it was by jumping from an upper tier. Since Plaintiff was an inmate in Defendants’ custody, Defendants and their employees had a constitutional obligation to take reasonable measures to protect Plaintiff’s safety and to provide safe conditions of confinement.


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.

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  • Display: Sort:
    I believe there is (none / 0) (#1)
    by Zorba on Fri Apr 12, 2019 at 02:03:02 AM EST
    An old saying that whoever represents themselves in court has a fool for a client.

    timing (none / 0) (#2)
    by thomas rogan on Fri Apr 12, 2019 at 09:42:22 AM EST
    No investigative reporters sleuthed any of this stuff back when the Stormy Daniels case was still in the headlines?

    I can recall multiple articles about (none / 0) (#3)
    by ragebot on Fri Apr 12, 2019 at 11:57:33 AM EST
    Avenatti having problems with his association with a coffee company that was billed as the next Starbucks which went bankrupt.




    There was also the problem of a law suit with his former partner in his previous law firm having won a big bucks suit against him which was being appealed.  

    This was well covered in 2018 in the business press while CNN/MSNBC were putting him on TV more than any guest I can recall; but they never seemed to mention his warts.

    Not to mention a lot of more conservative media sources screaming about his warts with big headlines.

    I try and read both the liberal and conservative media outlets but truth be told the libertarian ones seem to have less fluff.  Anyone not aware that Avenatti was a slime doggie was blinded by his bashing Trump and not paying attention.


    His work (none / 0) (#4)
    by Ga6thDem on Fri Apr 12, 2019 at 12:49:47 PM EST
    ironically led to Trump being indicted on felony campaign finance violations. So you can scream about him all you want but whatever he let loose it's been snowballing on Trump ever since.

    Do you have a (none / 0) (#5)
    by ragebot on Fri Apr 12, 2019 at 01:15:36 PM EST
    link to the indictment

    it is in my post (5.00 / 1) (#6)
    by Jeralyn on Fri Apr 12, 2019 at 02:03:21 PM EST
    I saw that (none / 0) (#7)
    by ragebot on Fri Apr 12, 2019 at 04:16:28 PM EST
    My question was about a link to Trump being indicted.  

    Read it (none / 0) (#8)
    by Ga6thDem on Fri Apr 12, 2019 at 04:31:53 PM EST
    reading comprehension is your friend (none / 0) (#9)
    by ragebot on Fri Apr 12, 2019 at 04:38:53 PM EST
    the key blurb from your link

    This filing does not constitute a charge against the president,

    As (5.00 / 3) (#10)
    by FlJoe on Fri Apr 12, 2019 at 05:02:38 PM EST
    if unindicted co-conspirator is a fine badge of honor for anybody.  

    Yes, Trump was not (none / 0) (#11)
    by KeysDan on Fri Apr 12, 2019 at 05:23:24 PM EST
    indicted (a charge, if warranted, would introduce the debatable question of indicting a sitting president, or waiting until after leaving office).

     In sentencing Michael Cohen, Trump's long-time lawyer, Federal Judge William Pauley III stated in open court that Trump had directed his then lawyer to commit a federal felony.

     The pay-offs/campaign violations to the two women with whom Trump had an alleged affair, the porn star Stormy Daniels, and the Playboy model, Karen McDougal, were, said the judge: "in coordination with and at the direction of" Individual 1 (who was elected president, i.e., Trump).

     Trump, while not indicted, or for that matter, apparently, named an unindicted co-conspirator (which would suggest a need for him to be charged, as in the case of Nixon), was implicated in a crime by federal prosecutors--a conclusion made on the basis of preponderance of evidence (a lower standard than beyond reasonable doubt).  

    However, the prosecutors would not rely only on Cohen's say so(for which, in part, he will be going to jail for three years), but probably have additional evidence.

    But, it probably does not matter, most Republicans will climb on former Senator Orrin Hatch's (R. UT) broom who responded to it all with "I don't care."