Michael Avenatti’s 36-New Charges: Including Details From Federal Prosecutor


Federal Prosecutors haven’t decided to throw the book at  Creepy Porn Lawyer Michael Avenatti, they are throwing the entire library at him. Announced on Thursday morning,  a federal grand jury has indicted the Los Angeles lawyer on 36 counts of fraud, perjury, failure to pay taxes, embezzlement and other financial crimes. If these charges are true, Avanti has gone from being creepy to being a genuinely evil bloodsucker. Especially considering the allegation that one of the clients he stole from was both mentally an physically incapacitated.

These charges are on top of last month’s charges of wire fraud and tax fraud by federal prosecutors in California (and trying to extort from Nike in NY).

Avenatti took millions of dollars from five clients and creating a web of fake companies and bank accounts to cover up his thefts. Per the LA Times:

  • One of the clients, Geoffrey Ernest Johnson, was a mentally ill paraplegic on disability who won a $4-million settlement of a suit against Los Angeles County. The money was wired to Avenatti in January 2015, but he hid it from Johnson for years, according to the indictment.

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The legal term for someone who steals from a mentally ill paraplegic should be a scumbag because if the charges are correct…that would be the perfect description for Avenatti.

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In each of the four cases of embezzlement alleged in the indictment, Avenatti received money on behalf of clients into client trust accounts, misappropriated the money, and lied to the clients about collecting the money or, in one case, claimed that the money had already been sent to the client. The Central District of California, Federal Prosecutors office gave details about the indictment:

  • In the case of a victim called Client 1 in the indictment, Avenatti represented the man in a lawsuit against the County of Los Angeles that alleged, among other things, Client 1 became a paraplegic as a result of the county violating his constitutional rights. The county paid a $4 million settlement in January 2015, but within months Avenatti had drained the entire settlement payment from his law firms’ trust account and used portions of the settlement to finance his coffee business or pay personal expenses. Avenatti concealed the receipt of the settlement from Client 1 and instead gave him periodic “advances” of no more than $1,900 and paid the rent for his assisted living facility, according to the indictment.
  • Client 2 obtained a $3 million settlement in a matter, which included a payment of $2.75 million in early 2017. The indictment alleges that Avenatti took the bulk of this money – $2.5 million – and used it to purchase his portion of a jet, while falsely telling Client 2 that the settlement called for monthly payments over eight years. Avenatti made 11 monthly payments, making them appear to come from the individual who paid the settlement, but then Avenatti allegedly stopped paying Client 2.
  • Client 3 is the client-victim discussed in the criminal complaint who was to receive a $1.9 million settlement in an intellectual property dispute. Avenatti allegedly embezzled the first installment of $1.6 million in January 2018, in part by providing Client 3 with a bogus settlement agreement indicating that the payment was going to be made two months later. The indictment alleges that Avenatti used the money to pay expenses at his coffee business and to pay his own legal expenses.
  • Clients 4 and 5 divested shares in a company after Avenatti negotiated a “Common Stock Repurchase Agreement” for the sale of nearly $27.5 million worth of shares and then another sale of approximately $8.15 million worth of shares. When the first payment was made, Avenatti took his fees for the overall $35 million sale and sent the balance to Client 4. But when the second stock sale was finalized and the company sent nearly $8.15 million, Avenatti kept $4 million for himself and used this money to pay some of his law firm’s bankruptcy creditors, including the IRS; to provide funding for his various businesses; and to make lulling payments to Client 1 and Client 2. When Client 4 and Client 5 demanded their money, Avenatti falsely told them that the purloined $4 million already had been wired to them and provided them with a wire transfer confirmation document which actually documented the transfer of an earlier $4 million payment.

 

The indictment also charges Avenatti with a total of 19 tax-related offenses. The indictment alleges that Avenatti has failed to file personal income tax returns since 2010 and that he failed to file various tax returns for his two law firms in which he held a controlling interest. Well, it is April 11th, therefore those charges are especially timely.

The indictment alleges that he lied to an IRS revenue officer, opened a new bank account to receive funds related to credit card transactions at Tully’s coffee shops which he owns, and directed Tully’s employees to deposit cash receipts into a bank account belonging to a car racing outfit that Avenatti also owned. Lying to the IRS? Doesn’t he know that the IRS is like The HULK—you won’t like them when they’re angry, Some of the money that should have been used to pay GBUS’ tax debt was transferred to bank accounts associated with Avenatti’s law firms, and some of that money was used to make lulling payments to Clients 1 and 2.

Avenatti faces two counts of bank fraud stemming from an alleged scheme in which he submitted bogus financial information to obtain three loans totaling $4.1 million from The People’s Bank, a federally insured financial institution in Mississippi

The Central District of California also reminds us, that an indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court

Avenatti has answered the charges on Twitter:

https://twitter.com/MichaelAvenatti/status/1116334394132664321

As my friend Ed Morrissey points out at Hot Air:

David and Goliath? Maybe Robin Hood is a better historical analogy, only with a hefty transactional fee if the allegations are accurate. And once again, let us revel in the irony of Avenatti’s embrace of due process after his bizarre attempt to railroad Brett Kavanaugh during his confirmation process to the Supreme Court. Any appeals that reach that level should be fun fun fun.

https://twitter.com/MichaelAvenatti/status/1116345651489435650

If he is convicted of all 36 counts, Avenatti could face 333 years in prison. Which means he probably won’t run for President for a while.

Make sure to read Ed Morrissey’s full take at Hot Air

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