Michael Avenatti charged with fraud, tax crimes in California

Avenatti indicted on 36 charges of tax dodging perjury theft from clients

Federal prosecutors said Thursday that attorney Michael Avenatti has been charged in a 36-count federal indictment in Southern California.

A news conference concerning the indictment in Los Angeles is scheduled for Thursday with federal prosecutors and Internal Revenue Service officials.

Avenatti already is facing charges in NY related to an alleged scheme to extort Nike, but he also was arrested in Los Angeles last month on claims that he stole money from a client and used bogus tax returns to secure loans.

On March 25, prosecutors in the Southern District of NY alleged that Avenatti tried to extract more than $20 million from Nike, and said if the company did not pay him, he would hold a press conference attacking the company.

The attorney known for representing porn actress Stormy Daniels in legal battles against President Donald Trump is accused of fraudulently obtaining bank loans and pocketing funds belonging to a client.

Avenatti faces 19 tax-related charges.

Avenatti became a prominent critic of Trump and a frequent guest on cable television news while representing Daniels, whose real name is Stephanie Clifford. Avenatti even dangled the prospect of entering politics himself, even as a 2020 presidential contender, before abandoning the idea.

Back home, his business practices had come under scrutiny from the IRS and a former law partner who was owed $14 million by Avenatti and the Eagan Avenatti firm, which filed for bankruptcy.

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In an emailed statement, law firm Greenberg Gross LLP identified Client 1 as a man named Geoffrey Johnson.

"Any claim that any monies due clients were mishandled is bogus nonsense".

The indictments include the two charges filed against him in March, including allegations that Avenatti submitted fake financial information to a MS bank in order to get three loans worth $4.1 million. In one of those instances, he said, Avenatti took some $2.5 million of a client's settlement money and put it toward a private jet.

Avenatti made false statements in bankruptcy proceedings by submitting forms that under reported income such as a $1.3 million payment his firm received, the indictment said.

On Thursday, asked about Avenatti's claim that the indictment was the result of a conspiracy by prominent figures Avenatti has antagonized, Hanna dismissed that allegation: "Nothing can be farther from the truth".

The indictment said Avenatti stole millions of dollars from five clients through a group of shell companies and bank accounts to make it more hard to track. 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.

When asked by The Associated Press last month about Johnson's case, Avenatti said his client approved all transactions and accounting and had been kept in the loop. The money was wired to Avenatti in January 2015, but he hid it from Johnson for years, according to the indictment.

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