Michael Avenatti pleads guilty to fraud and California tax charges

Incarcerated attorney Michael Avenatti pleaded guilty Thursday to four counts of wire fraud and one tax charge in a case in federal court in Southern California accusing him of defrauding his clients of millions of dollars.

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

The 51-year-old self-represented attorney in the California case said earlier this week that while he hasn’t reached a settlement with federal prosecutors, he wants to change his plea to be responsible and spare his family further embarrassment.

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

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

The government has estimated that the appropriate amount of compensation for victims affected by the schemes related to the wire fraud charges is $9 million. Avenatti said he thought it was “considerably less” than that. The judge said that would be a matter he would consider in sentencing.

Avenatti is serving five years in federal custody 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 representing her in court and cable news programs during his legal battles with the President Trump at the time. Avenatti has previously been found guilty 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, shot to fame after representing Daniels in her lawsuit to break a confidentiality agreement with Trump to remain mum over a case she said she had.

He has become one of Trump’s main opponents, attacking him on cable news programs and on Twitter, and at one point considered challenging him in the 2020 presidential election.

Avenatti has been indicted 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 with key financial evidence.

Avenatti was due to stand trial on some of the California charges 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 pay them what they were owed.

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

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

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

Prior to the criminal charges, Avenatti faced numerous legal issues, including a lengthy civil judgment and the bankruptcy proceedings of his law firm.