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Avenatti indicted on fraud, identity theft and extortion charges; accused of stealing from Stormy Daniels

Talk Media News

Michael Avenatti and his then-client Stormy Daniels talk to reporters in April 2018. The two made frequent media appearances, together and separate, before parting ways in February. (The Circus/YouTube via Creative Commons)

WASHINGTON — Attorney and vocal Trump-critic Michael Avenatti was indicted by a federal grand jury Wednesday afternoon on charges of fraud and aggravated identity theft in relation to alleged schemes to rip off a client — believed to be adult film actress Stormy Daniels — and to extort more than $20 million from Nike.

The indictments, one for the charges involving an unnamed client referred to as “Victim-1” and another for the Nike allegations, were filed in U.S. District Court for the Southern District of New York. Different judges are assigned to each case.

One indictment alleges that Avenatti, 48, stole about $300,000 from an individual believed to be Daniels, a former client whose real name is Stephanie Clifford. The money was part of an advance on a book deal. It alleges that Avenatti used that money for his own personal and business expenses, and has repaid the client about half of the amount.

The indictment says the Los Angeles-based attorney used the stolen money “to pay employees of his law firm and a coffee business he owned, to make payments to individuals with whom Avenatti had personal relationships with, to make a luxury car payment and to pay for hotels, airfare, meals, car services and dry cleaning.”

“Michael Avenatti abused and violated the core duty of an attorney — the duty to his client,” Manhattan U.S. Attorney Geoffrey Berman said Wednesday in a statement announcing the indictments.

“As alleged, he blatantly lied to and stole from his client to maintain his extravagant lifestyle, including to pay for, among other things, a monthly car payment on a Ferrari.

“Far from zealously representing his client, Avenatti, as alleged, instead engaged in outright deception and theft, victimizing rather than advocating for his client,” Berman said.

In a statement released to CNN, Avenatti denied any wrongdoing and said he gave Daniels millions of dollars worth of legal services. He said he looked forward to his day in court, when he would be vindicated.

Daniels’ book, “Full Disclosure,” published by St. Martin’s Press, was released Oct. 2, 2018. In the memoir, she discusses her alleged affair with Donald Trump before he was elected president. Trump’s former personal attorney, Michael Cohen, said he paid Daniels $130,000 during the campaign in exchange for a nondisclosure agreement about the alleged affair. Cohen says Trump, who denies the affair, repaid him the money.

Last November and August, respectively, Cohen pleaded guilty to lying to Congress with regard to the payment to Daniels and violating campaign finance laws. On May 6 he reported to a federal prison in upstate New York to begin serving a 3-year sentence.

Wednesday’s indictment says Avenatti’s unnamed client received part of an initial advance payment, which was wired to a bank account. But before another payment installment arrived, prosecutors allege, Avenatti sent a letter to a literary agent, identified only as “Agent-1,” instructing the agent to send the payment to a different bank account under his control. The “fraudulent and unauthorized letter” purported to be from Daniels and contained a forgery of her signature, prosecutors allege.

When the client asked Avenatti about the status of subsequent payments, he said the money had not yet been received, the indictment says.

Although the client initially gave Avenatti a retainer for representation in the book deal, the attorney later told the client no money was owed, the indictment says.

If convicted of wire fraud, Avenatti faces a maximum penalty of 20 years in prison. The identify theft charge has a mandatory 2-year sentence. if he is convicted of both charges, the sentences would be served consecutively.

The extortion indictment is related to charges for which Avenatti was arrested on March 25. Prosecutors allege the attorney tried to get more than $20 million from Nike “by threatening to use his ability to garner publicity to inflict substantial financial and reputational harm on the company if his demands were not met.”

After he was released on bail the evening of his arrest in March, Avenatti took to Twitter the following day and accused Nike of covertly paying young athletes in hopes that the sportswear apparel company could secure future endorsement deals from them. He claimed the extortion charge was in retaliation for his plans to reveal Nike’s alleged illegal activities.

Nike has denied any wrongdoing.

The charges of extortion and conspiracy to commit extortion each carry a maximum sentence of 20 years in prison, if convicted.

If convicted on all counts, Avenatti will spend the rest of his life in prison.

On March 11 on Twitter, Daniels said she had retained attorney Clark Brewster (of Tulsa, Okla.) to serve as her personal lawyer. Her tweet made no mention of Avenatti. But she tweeted about him on March 25, the day of his arrest, and hinted that more revelations about her former attorney would be forthcoming.

As of late Wednesday night, Daniels had made no comment on Twitter about Avenatti’s indictments.

This article is republished with permission from Talk Media News.