Michael Avenatti, a high-profile lawyer and critic of President Donald Trump, was indicted on charges of defrauding clients and the USA government out of millions of dollars, including allegations he embezzled from a paraplegic man, prosecutors announced on Thursday.
In acourt filing, an FBI agent wrote that Avenatti said he would hold a press conference alleging misconduct at Nike unless he and another lawyer were paid between $15 million and $25 million to conduct an internal investigation, or were given $22.5 million to resolve their client's claims and in exchange for their silence.
Avenatti is accused of four different crimes: wire fraud, tax fraud, bank fraud, and bankruptcy fraud.
Avenatti was also accused of using fraudulent tax returns to secure a bank loan.
When the IRS put tax levies on coffee company bank accounts to collect more than $5 million, Avenatti had Tully's employees deposit cash receipts in a little-known account, the indictment said.
"Money generated from one set of crimes was used to further other crimes, typically in the form of payments used to string along victims so as to prevent Mr. Avenatti's financial house of cards from collapsing".
If convicted of the 36 counts, Hanna said Avenatti faces a maximum sentence of 333 years in prison, plus another two-year mandatory consecutive sentence for aggravated identity theft.
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Last month, Avenatti was named as a defendant in two other indictments from federal prosecutors in NY and Los Angeles.
Federal prosecutors in California plan to level fresh charges against Michael Avenatti on Thursday, marking yet another legal blow for the controversial celebrity attorney known for representing adult film actress Stormy Daniels. Cohen faces a three year prison sentence for his role in that scheme, which is still under investigation by federal prosecutors with the Southern District of NY.
United States Attorney Nick Hanna said that Avenatti's crimes were "linked" because they used money that he had obtained illegally to help perpetuate other crimes. Avenatti never informed Johnson of the $4 million settlement, and instead funneled it to GB Autosport, LLC - a company he established to manage his race-car team - and to his failed coffee company, Global Baristas LLC.
In an emailed statement, law firm Greenberg Gross LLP identified Client 1 as a man named Geoffrey Johnson. He has said he expects to be cleared in that case.
In November 2018, Johnson asked Avenatti to send information on the settlement to the Social Security Administration so it could gauge his eligibility for disability payments.
Until last month, Avenatti had only provided $124,000 over 69 payments to Johnson, the indictment said.
Avenatti became a prominent critic of Trump and a frequent cable TV guest while representing Daniels, whose real name is Stephanie Clifford.