Michael Avenatti charged with 36 counts: Embezzlement, fraud, cheating on taxes
- Author: Sonia Alvarado Apr 12, 2019,
Apr 12, 2019, 1:58
In late March, Avenatti was arrested on federal bank fraud and wire fraud charges for allegedly trying to extort the Nike corporation for $20 million, embezzling a client's money to pay his personal debts, and defrauding a bank in MS by providing false tax returns to obtain a loan.
A statement from prosecutors to news outlets says details of the case will be released Thursday morning by U.S. Attorney Nick Hanna and the Internal Revenue Service in Los Angeles.
On Thursday, following the grand jury indictments in California, Avenatti declared that he plans "to fully fight all charges and plead NOT GUILTY".
As the private jet was seized by federal authorities on Wednesday (April 10), it's been alleged that most of the money for the paraplegic client was funneled to a company that managed Avenatti's race-car team, as well as to his coffee company, Global Baristas.
In the indictment, prosecutors allege Avenatti stole millions of dollars in settlement money from five clients.
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"Money generated from one set of crimes appears in other sets - typically in the form of payments to lull victims and to prevent Mr. Avenatti's financial house of cards from collapsing", Hanna said in a statement.
He also allegedly defrauded a bank using false IRS tax returns that made it seem as though he had more money than he did in real life.
In 2017, Avenatti received $2.75 million in proceeds from another client's legal settlement, but concealed that too, the indictment says.
Those clients include "Client 1", a man who is paraplegic and who won a $4 million settlement from Los Angeles County. "I am entitled to a FULL presumption of innocence and am confident that justice will be done once ALL of the facts are known", he added.
"Any claim that any monies due clients were mishandled is bogus nonsense". The client was also denied disability benefits in February 2019 after Avenatti failed to respond to the Social Security Administration on the client's behalf, allegedly fearing that disclosure of information the administration sought would expose Avenatti's scheme. But when Johnson was in escrow to purchase the property, Avenatti falsely said he had not received the settlement funds, the indictment said.
Grassley - who served as chairman of the Senate Judiciary Committee during the nomination for Supreme Court Justice Brett Kavanaugh - called out the media outlets that trusted Avenatti when he brought forward sexual assault allegations against the judge.