Michael Avenatti jailed over new money laundering accusations
Los Angeles attorney Michael Avenatti engaged in fraud and money laundering to hide $1 million from one of his ex-wives and other creditors after his March arrest, federal prosecutors allege in newly filed court papers.
Avenatti, who is awaiting trial on three federal indictments, was arrested again late Tuesday in downtown Los Angeles and remained in custody Wednesday morning, according to Thom Mrozek, a spokesman for the U.S. attorney’s office in Los Angeles.
Prosecutors are seeking a hearing Wednesday in federal court in Santa Ana on their request to revoke Avenatti’s bail.
In documents filed in the federal court, they allege that Avenatti received the $1 million in legal fees in April as part of a client’s settlement, but concealed the money from his second ex-wife, Lisa Storie Avenatti; a former law partner; tax authorities; and other creditors.
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Avenatti’s latest arrest took place at a California State Bar Court hearing, where the bar was seeking to block him from practicing law while he faces fraud, extortion and other charges in the three federal indictments. Prosecutors and the State Bar say he stole millions of dollars from his own clients.
Avenatti, who gained fame as the lawyer for porn actress Stormy Daniels, one of the clients he is accused of cheating, has denied wrongdoing. His lawyer, H. Dean Steward, did not immediately return a call for comment.
In the court papers, prosecutors described elaborate steps taken by Avenatti to hide the $1 million by shifting it through multiple bank accounts and using cashier’s checks to spend it.
Avenatti, who is scheduled to go on trial next week in New York federal court for allegedly trying to extort sports giant Nike out of more than $20 million, used the money to cover rent on his luxury apartment in Century City, pay his legal bills and buy a $50,000 Mercedes-Benz, according to the court documents.
Avenatti initially tried to buy the car in his own name, but then worked with his first ex-wife, Christine Avenatti Carlin, to put it in her name instead, prosecutors allege. He drew from the $1 million to pay his personal driver, they said.
Avenatti also used the money to pay membership fees to Exclusive Resorts, an elite vacation club with luxury properties in Florida, New York and California, where Avenatti stayed at least four times while awaiting trial, prosecutors said. He also allowed a girlfriend to stay at an Exclusive Resorts property in Tuscany, Italy, they said.
Prosecutors noted that Avenatti had an Italian passport when he was arrested last year and said his girlfriend’s trip to Tuscany raises questions about whether Avenatti had hidden assets in Europe.
Prosecutors said Avenatti received a $1-million cashier’s check on April 30 but failed to turn over the money to creditors who had legal claims on the money.
More:
https://www.latimes.com/california/story/2020-01-15/michael-avenatti-arrested-new-fraud-allegations