On June 16, former attorney Michael Avenatti pleaded guilty to a number of charges, including fraud and tax-related crimes.
NBC reported that Avenatti, who has been in prison since July 2021 for a separate case in which he attempted to extort Nike, confessed to having stolen from several clients, including NBA star Hassan Whiteside and actress Stormy Daniels.
Michael Avenatti represented himself in the case. As per a statement by federal prosecutors, he confessed to a series of crimes in court.
The statement said:
“(Avenatti admitted to) receiving money on behalf of clients into client trust accounts, misappropriating the money, and lying to the clients about the receiving the money o, in one case, claiming that the money had already been sent to the client.”
According to CNN, Avenatti pleaded guilty to four counts of wire fraud, as well as illegally keeping $5 million in payroll taxes. The maximum sentence could potentially amount to a total of 83 years in prison.
The downfall of Michael Avenatti
Before legal cases began mounting against him, 51-year-old Michael Avenatti was known as a celebrity lawyer. He had a colorful public image, becoming a television star and professional racecar driver. According to Reuters, Avenatti’s firm, which has represented multiple celebrity clients, was well known for filing lawsuits against powerful figures and Fortune 500 companies.
He gained particular notoriety for representing Stormy Daniels in her lawsuit against former President Donald Trump. Such was his fame that in 2018, he announced his intentions to run for the 2020 Presidential elections.
Legal troubles first entered the life of Michael Avenatti in 2018 when he was arrested for domestic violence, though he vehemently denied the allegations. In 2019, he would be arrested for allegedly extorting Nike, the crime that sent him to prison.
According to Business Insider, Avenatti allegedly told Nike representatives that if they did not pay him $25 million, he would file a lawsuit against them concerning misconduct among Nike employees.
Reportedly, Nike representatives accused Avenatti of saying:
“I’ll go take 10 billion dollars off your client market cap.”
In February 2020, Avenatti was convicted of extortion charges and sentenced to 30 months in prison. Even then, he still faced additional white-collar charges filed against him by the U.S. Attorney for the Central District of California.
The Washington Post reported that Nicola T. Hanna of the US Attorney's office spoke out against Avenatti's alleged white-collar schemes.
She said:
“Money generated from one set of crimes was used to further other crimes, typically in the form of payments designed to string along victims.”
After Avenatti represented Stormy Daniels, the actress filed a lawsuit against him, accusing him of stealing the $300,000 advance she was supposed to receive for her autobiography. Three other clients accused him of embezzling funds in a similar manner.
Avenatti is expected to be sentenced for the latest wire fraud and tax offenses on September 19. Prosecutors said the former attorney is still waiting to be tried for 31 additional charges, including bank fraud, wire fraud, and more tax-related offenses.
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