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Feds file new charges against Michael Avenatti

Posted at 1:57 AM, Apr 12, 2019

Federal prosecutors in California leveled fresh charges against Michael Avenatti on Thursday, marking yet another legal blow for the controversial celebrity attorney known for representing adult film actress Stormy Daniels.

In a 61-page federal indictment detailing 36 counts, prosecutors with the U.S. attorney’s office in the Central District of California described Avenatti's alleged decade-long scheme to embezzle and hide millions of dollars from clients. If found guilty, the charges could land him more than 300 years in federal prison.

“The money was used to fuel a lavish lifestyle that had no limits including making mortgage payments on a multi-million dollar home in Laguna Beach," Acting Special Agent in Charge of IRS Criminal Investigation Ryan Korner said during a press conference Thursday.

Korner said federal agents seized Avenatti’s $5 million private jet this week.

A vocal critic of President Donald Trump whose presence on cable television last year made him a national figure, Avenatti now finds himself buried in legal travails on both coasts.

Prosecutors in the Central District targeted Avenatti with wire and bank fraud charges last month in a scheme that included allegations he stole funds from a client to pay off his own expenses. In New York, Avenatti faces two counts of extortion for his alleged role in what prosecutors called “an old-fashioned shakedown” of Nike.

Charges in the separate cases were announced almost simultaneously and authorities took Avenatti into custody in New York City later that day. He was ordered released on $300,000 bond later that day.

In the new indictment filed Thursday, Avenatti is accused of stealing millions of dollars from clients who had been paid settlements. The money, which was supposed to flow through Avenatti to his clients when the settlements were paid, stayed with Avenatti, according to prosecutors.

“Mr. Avenatti received money on behalf of clients into client trust accounts, misappropriated the money and lied to the clients about receiving the money,” U.S. Attorney Nick Hanna explained .

One of the clients who was allegedly never paid was Geoffrey Johnson, a paraplegic man on disability. Johnson won a $4 million dollar settlement against Los Angeles County in 2015. Prosecutors say that money was paid to Avenatti but was never given to Johnson.

Avenatti allegedly told Johnson that the money was not yet available and that he was “advancing” Johnson money to pay rent. Yet the entire time, prosecutors say, Avenatti had the $4 million and was using it for personal and business expenses.

“Mr. Johnson is the victim of an appalling fraud perpetrated by the one person who owned him loyalty and honest most of all: his own lawyer,” Johnson’s attorney Josh Robbins writes to ABC News. “His actions have left Mr. Johnson destitute.”

After prosecutors announced plans for Thursday's press conference, Avenatti tweeted that he remains "confident that justice will be done once ALL of the facts are known."

Avenatti gained prominence last year when he began representing Daniels in a defamation lawsuit against Trump. A federal judge in California later threw out the suit and ordered Daniels to reimburse Trump for legal fees.

A court appearance is scheduled for April 25 in New York.