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Avenatti Gets 14 Years in Prison for Tax Fraud, Stealing Millions From Clients

The celebrity lawyer is already serving five years in prison for his extortion and fraud convictions in New York.

By Michael Finnegan, Los Angeles Times (TNS)

Michael Avenatti, the once-swaggering celebrity lawyer who was undone by his proclivity for embezzlement and fraud, was sentenced Monday to 14 years in prison for dodging taxes and stealing millions of dollars from clients.

His sentencing by U.S. District Judge James V. Selna in Santa Ana concludes the last of three federal prosecutions of the former attorney, who gained notoriety for representing adult film star Stormy Daniels in her legal battles against former President Donald Trump.

Selna said Avenatti had accomplished “many noble and good things in his life,” but had “also done great evil.” He ordered him to pay nearly $8 million in restitution to victims.

Avenatti, 51, is already serving five years in prison for his extortion and fraud convictions at two trials in New York. Selna ordered him to serve the 14 years in prison after the five-year sentence is complete. Federal prosecutors in California had asked Selna to order Avenatti locked up for an additional 17 years and six months.

Avenatti pleaded guilty in June to four counts of wire fraud for stealing money from clients and one count of obstructing collection of federal payroll taxes from his Seattle coffee business, now defunct.

One of the law clients he robbed, Geoffrey Ernest Johnson, was a mentally ill paraplegic on disability.

“To this day, I do not know why Michael lied and deceived me, why he broke my trust, why he broke my heart,” Johnson wrote in a statement to the court.

Johnson won a $4 million settlement of a suit against Los Angeles County. The money was wired in January 2015 to Avenatti, who kept the bulk of it and lied to Johnson about it.

“I trusted him implicitly, I believed the things he told me, but it was all part of his plan to defraud me of my settlement,” Johnson wrote. “To this day, I have a hard time trusting people because of what Michael did, and I live in constant fear of being taken advantage of again, particularly given my physical disability.”

Avenatti also admitted stealing from a $2.75 million settlement that his client Alexis Gardner obtained from her former boyfriend Hassan Whiteside, a pro basketball player then with the Miami Heat. Avenatti used most of the money to buy a private jet.

Selna has approved the government’s request to confiscate the eight-seat Honda HA-420 plane.

Avenatti, who represented himself in court despite the loss of his law license, had asked Selna to impose no more than six years in prison that would run concurrently with the five years he is serving for his New York convictions.

“Defendant deserves just punishment for his crimes, including a prison sentence,” Avenatti wrote in a memo to the judge, referring to himself in the third person. “He likewise deserves to lose his law license, his 22-year career, his assets, his countless personal and professional relationships, and his reputation, almost all of which have already been rightly taken from him.”

At the same time, he wrote, “This case, while serious, does not begin to approach a case involving a crime of violence or a fraud resulting in a loss of tens of millions or hundreds of millions of dollars.”

Avenatti, who has been incarcerated most recently at the low-security Terminal Island federal prison in the L.A. harbor community of San Pedro, was escorted into the courtroom Monday by U.S. Marshals deputies.

“Your honor, at no point in time did I set out to bilk my clients,” Avenatti, wearing a beige prison uniform and sneakers, told Selna.

Yet he apologized for violating their trust, saying he was “deeply remorseful and contrite.” “There is no doubt that all of them deserved much better.” He added later: “I am not an evil or vile man.”

He urged Selna to consider his tough upbringing in Missouri and his representation of thousands of clients “ethically and with great success” as he was becoming one of California’s top plaintiff’s lawyers.

The amount of Avenatti’s embezzlement is in dispute. Avenatti said the four clients he admitted defrauding lost $3.4 million; prosecutors argued it was more than $12 million.

“There was no excuse for defendant’s criminal conduct, which was motivated solely by arrogance and greed,” Assistant U.S. Attorneys Brett A. Sagel and Ranee A. Katzenstein told Selna in a memo.

Avenatti’s fraud was “cruel,” “callous” and “calculating,” they wrote, and his tax cheating was “massive.” Avenatti stole $3.2 million in federal payroll taxes that his company, Global Baristas U.S., collected from employees of its chain of Tully’s Coffee outlets but failed to pass along to the government, prosecutors said.

“Defendant did not commit his crimes to support his family, pay child support, or for any other arguably mitigating reason; to the contrary, he stole from his clients to live an extravagant lifestyle while some of his victims could barely make ends meet,” they wrote in the memo.

At the sentencing, Sagel ridiculed Avenatti’s portrayal of himself as a fighter for “the little guy” in David vs. Goliath suits against corporations. “Defendant isn’t a fighter,” Sagel told the judge. “He’s just a simple fraudster.”

Andrew Stolper, an attorney who worked at Avenatti’s law firm in Newport Beach and often clashed with him, said the audacity he displayed in committing such a wide breadth of crimes seemed to be rooted in narcissism.

“None of it makes any sense other than he deluded himself into thinking he could get away with it,” Stolper said. “If you sit down and try to rationally figure out why a successful lawyer would resort to stealing money from his clients and at the same time elevate himself to the national stage, there’s not enough hours in a lifetime to figure that out.”

Avenatti’s crimes were well underway by the time Daniels vaulted him to fame by hiring him in 2018 to sue Trump. Daniels accepted a $130,000 payment just before the 2016 election to keep quiet about her alleged 2006 sexual encounter with Trump, and Avenatti went to court to void the deal.

Avenatti’s bombastic manner made him an instant hit on cable news shows. He became one of Trump’s fiercest critics on television. He traveled to Iowa and New Hampshire to explore a run for the Democratic presidential nomination, but his legal troubles soon spiraled out of control.

In March 2019, FBI agents arrested Avenatti in midtown Manhattan for trying to extort as much as $25 million from Nike by threatening the company with negative publicity. Following his conviction at trial, he was sentenced last year to 30 months in prison.

Federal prosecutors in New York also charged Avenatti with stealing nearly $300,000 from Daniels’ advance on a book contract. After he was convicted for that too, he got another 48 months in prison.

The two New York sentences are partly concurrent, so Avenatti is, in effect, serving five years in prison.

The California indictment was the most sweeping of the three: 36 counts of fraud, perjury, failure to pay taxes, embezzlement and related crimes.

When Avenatti pleaded guilty to five of the charges in June, he had not struck any deal with prosecutors. So he still faced two counts of bank fraud, four counts of bankruptcy fraud, one count of aggravated identity theft, six wire-fraud charges and 18 tax-related charges.

Those charges were dismissed after Avenatti was sentenced Monday.

(Photo by Spencer Platt/Getty Images/TNS)


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