Avenatti Indicted for Stealing Payment from Stormy Daniels’ Trump Tell-All

‘When is the publisher going to cough up my money?’

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Michael Avenatti (screen shot: Fox News/Youtube)

(Michael Finnegan, Los Angeles Times) Michael Avenatti, the disgraced Los Angeles attorney and one-time cable news regular, was indicted Wednesday on charges of stealing from his former client Stormy Daniels.

Avenatti, whose fame representing Daniels and other tabloid-friendly clients led to nightly CNN appearances—and even made him a one-time presidential hopeful for the Democratic ticket—is accused of skimming money from Daniels’ deal to write a memoir detailing her alleged sexual affair with Donald Trump.

It was the third time in two months that federal prosecutors have charged the celebrity attorney with criminal wrongdoing. Daniels is the sixth Avenatti client whom prosecutors say he defrauded.

A federal grand jury in New York accused Avenatti of forging Daniels’ signature on a document instructing her literary agent to wire her money to him.

“Far from zealously representing his client, Avenatti, as alleged, instead engaged in outright deception and theft, victimizing rather than advocating for his client,” said Geoffrey S. Berman, the U.S. attorney for the Southern District of New York.

Prosecutors said Avenatti improperly diverted nearly $300,000 to his own bank accounts and used roughly half of it for personal expenses, including the lease of a Ferrari.

On Twitter, Avenatti denied the charges. “No monies relating to Ms. Daniels were ever misappropriated or mishandled,” he said.

Under an April 2018 contract that Avenatti helped negotiate with her publisher, St. Martin’s Press, and literary agent, Janklow & Nesbit Associates, Daniels was to receive an $800,000 advance in four installments for her memoir, “Full Disclosure.”

The book, which included graphic details of her alleged 2006 sexual encounter with Trump at a Lake Tahoe resort, was published in October.

The publisher sent the first two installments—a total of $425,000—to Daniels’ agent, which forwarded the money to her after taking a fee, according to the indictment.

But Avenatti embezzled the third and fourth installments, the grand jury alleged.

He did it by emailing a letter to Janklow & Nesbit on Aug. 1, 2018, instructing the agent to wire the remaining money to a bank account Avenatti controlled.

The letter purported to be from Daniels, with her signature.

But Daniels neither authorized nor signed the “false wire instructions,” the indictment says.

When he received the two remaining installments, minus the agent’s fees, Avenatti spent the money on hotels, airline tickets, car services, restaurants, dry cleaning, a $3,900 lease payment on the Ferrari and various business expenses, according to the indictment.

Avenatti repeatedly lied to Daniels to cover up the theft, the grand jury alleged.

“When is the publisher going to cough up my money?” she asked him in December, according to the indictment.

Avenatti did not tell her he had already received and spent the money, telling her instead he was threatening to sue the publisher.

“They need to pay you the money as you did your part and then some,” he allegedly told her.

Daniels made Avenatti famous last year by hiring him to sue Trump to void a nondisclosure agreement she signed before the 2016 election.

In exchange for her silence, the adult-film star was paid $130,000 to keep quiet about her alleged sexual encounter with Trump.

Prosecutors say Trump’s former attorney, Michael Cohen, paid the hush money to Daniels, a stripper who has performed in more than 150 pornographic movies over the last two decades.

When the scandal broke in early 2018, Avenatti fueled the media frenzy in scores of interviews with Anderson Cooper, Megyn Kelly, George Stephanopoulos and other television news personalities.

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Michael Avenatti, Stormy Daniels, Anderson Cooper (Michael Avenatti/Twitter)

Tensions between Avenatti and Daniels spilled into public view in November.

Daniels, whose real name is Stephanie Clifford, told the Daily Beast that Avenatti treated her with disrespect, ignored requests for an accounting of her crowdfunding money and, against her wishes, filed a second suit against Trump for defamation. Avenatti denied her allegations.

A federal judge dismissed both of Daniels’ lawsuits against Trump. He ordered Daniels in December to pay Trump $292,000 to cover the president’s legal fees. Two months later, Daniels and Avenatti parted ways for reasons neither disclosed.

“He knew that I was unhappy and looking for new counsel,” Daniels told a crowd at a book promotion event in Washington.

The FBI arrested Avenatti in New York on March 25 after secretly recording what prosecutors allege was an attempt to extort the Nike corporation in conversations with the company’s lawyers. He was formally indicted in that case, too, on Wednesday.

Prosecutors say Avenatti threatened to hold a news conference that would take billions of dollars off Nike’s market value unless it paid a client $1.5 million and hired Avenatti and L.A. lawyer Mark Geragos for as much as $25 million to conduct an internal investigation.

Geragos, identified by prosecutors as an unindicted co-conspirator, was not charged with any crimes.

Still, the most serious legal threat to Avenatti is in California, where he faces a separate 36-count federal indictment. He is scheduled to be tried in August in Santa Ana on charges of embezzling millions of dollars from clients, dodging taxes, defrauding a bank by submitting fake financial papers to get loans and concealing assets from creditors and the federal court that oversaw his law firm’s bankruptcy.

Avenatti denies wrongdoing.

The clients whose money prosecutors say he stole include Geoffrey Ernest Johnson, a mentally ill paraplegic man on disability, and Michelle Phan, a makeup artist popular on YouTube.

He is also charged with embezzling most of a $2.75 million payment that Miami Heat basketball center Hassan Whiteside intended for an ex-girlfriend, Alexis Gardner, who was an Avenatti client.

(c)2019 Los Angeles Times. Distributed by Tribune Content Agency, LLC.