Before Stormy Daniels, her attorney faced allegations of dubious business dealings at Tully’s Coffee
He’s become famous as the brash lawyer for the porn star who purportedly bedded the future president, but before Michael Avenatti accused Donald Trump and his attorney of a payoff scheme to muzzle Stormy Daniels, he faced allegations of dubious business dealings as owner of a flailing coffee chain. Since his investment firm bought bankrupt Tully’s Coffee for $9.15 million at auction five years ago, Avenatti’s company has been named in more than 50 state and federal legal complaints, including commercial lawsuits, breach of lease actions and warrants for unpaid taxes, court records show. All the while, Tully’s has shuttered store after store — from Everett to Bellevue, Tacoma to Seattle, and beyond — with employees left in limbo, landlords left unpaid and customers left holding now seemingly worthless loyalty cards. And late last month, the list of grievances against Avenatti only intensified, with new allegations of wrongdoing. In a complaint submitted to the California State Bar Association — and cc’d to the U.S. Attorney’s Office in Seattle — Bellevue attorney David Nold asserts Avenatti carried out an illegal “pump and dump” scheme through his Washington state-registered Tully’s ownership firm, Global Baristas US, LLC. Nold’s complaint contends that while Avenatti ran the company, he fleeced nearly $6 million in federal and state tax withholdings — money meant to be held in trust for payment of quarterly taxes — from the paychecks of Tully’s employees.
The complaint also claims Avenatti fraudulently transferred $100,000 from the Tully’s operation last year to retain lawyers for his California law firm’s unrelated bankruptcy. “Michael Avenatti’s actions in connection with Global Baristas US, LLC have caused significant damage to the State of Washington, the federal government and numerous private entities,” according to Nold, who represents Bellevue Square, Ellenos yogurt and other clients who have recently sued the Tully’s firm. “And they implicate his fitness to practice law.” Officials for the California bar won’t say whether they’re investigating.
Avenatti, 47, an aggressive class-action litigator based in Newport Beach, California, declined to be interviewed. In an email, he generally disputed the allegations and attacked Nold’s character. "Mr. Nold is widely known as an unethical ‘hack’ of a lawyer who routinely files baseless complaints,” Avenatti’s email said. “He is a disgrace to the legal profession and is consumed by jealousy of other attorneys so he makes baseless allegations. His most recent conduct is yet more of the same — I hope he gets the help he needs.” Avenatti provided no evidence for his attack against Nold, who has no record of disciplinary actions or ethical violations, according to the Washington State Bar website. Nold brushed off the comment. “He’s mad because we wouldn’t be bullied,” he said.
Avenatti’s email also did not address questions about Tully’s. “You will have to ask your questions to the new ownership group who long ago took on responsibility for various tax liabilities etc.,” he wrote, declining to specify who those owners are or when he divested his stake. In various court filings and testimony last year, Avenatti described himself as the principal or chairman of the Tully’s chain. During a July deposition, he testified his law firm wholly owned Doppio Inc., a Delaware corporation that he said controlled 80 percent of Tully’s ownership firm, Global Baristas US.
https://www.thenewstribune.com/news/business/article208309604.html