Avenatti pleads guilty to fraud, tax charges in California

U.S.

FILE – In this July 23, 2019, file photo, California attorney Michael Avenatti walks from a courthouse in New York, after facing charges. On Wednesday, June 9, 2021, Avenatti’s lawyers said he should spend no more than six months behind bars after a jury concluded he tried to extort $25 million from Nike. (AP Photo/Craig Ruttle, File)

SANTA ANA, Calif. (AP) — Incarcerated lawyer Michael Avenatti pleaded guilty Thursday to four counts of wire fraud and a tax-related charge in a federal court case in Southern California accusing him of cheating his clients out of millions of dollars.

Avenatti made the plea during a court hearing in Santa Ana. Prosecutors said the plea subjects Avenatti to as many as 83 years in prison

The 51-year-old lawyer who is representing himself in the California case said earlier this week that although he didn’t reach a deal with federal prosecutors, he wanted to change his plea to be accountable and spare his family further embarrassment.

Federal prosecutors accused Avenatti of cheating clients out of millions by negotiating and collecting settlement payments on their behalf and funneling the money to accounts that he controlled. He was charged in a 36-count indictment in 2019 of crimes including wire and tax fraud.

A sentencing hearing was tentatively scheduled for Sept. 19, but, if the government decides to try him on any of the remaining counts, that date will likely be vacated so he can be sentenced on all counts after trial. The government said it expects to be able to inform the court of its plans on Monday.

The government estimated that the appropriate amount of restitution to victims affected in the schemes related to the wire fraud counts is $9 million. Avenatti said he believes it is “drastically less” than that. The judge said that would be an issue he would consider for sentencing.

Avenatti is serving five years in prison in a federal facility in California for convictions in two cases in New York.

He was convicted of stealing book proceeds from Stormy Daniels, the porn actor who catapulted him to fame as he represented her in court and cable news programs during her legal battles with then-President Donald Trump. Avenatti was previously convicted of trying to extort Nike if the shoemaker didn’t pay him up to $25 million.

Avenatti, who is suspended from practicing law in California, rose to fame after he represented Daniels in her lawsuit to break a confidentiality agreement with Trump to stay mum about an affair she said they had.

He became one of Trump’s leading adversaries, attacking him on cable news programs and Twitter, and at one point considered challenging him in the 2020 presidential election.

Avenatti was charged in federal cases in New York and California. He was convicted in New York and a mistrial was declared last year in California after the judge found prosecutors failed to provide him key financial evidence.

Avenatti was scheduled to stand trial on some of the California counts in July, with a trial on the rest to follow.

Prosecutors said Avenatti collected millions of dollars in payments from clients and used the money to fund a lavish lifestyle, including a private jet, rather than paying them what they were due.

Authorities said Avenatti collected $4 million from Los Angeles County for a man who suffered in-custody injuries and was left paraplegic after a suicide attempt, but denied the settlement was received and paid the man much smaller amounts ranging from $1,000 to $1,900, which he called advances on the broader settlement.

In another instance, prosecutors said Avenatti collected a $2.75 million settlement payment for a client and used much of the money to buy a private airplane.

Prosecutors also accused Avenatti of failing to pay personal income taxes and business taxes and pocketing millions of dollars in payroll taxes from a coffee chain he owned.

Before the criminal charges, Avenatti faced numerous legal problems including a hefty civil judgment and his law firm’s bankruptcy proceedings.

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