Michael Avenatti convicted of stealing from Stormy Daniels, gets jail time

Attorney Michael Avenatti, who skyrocketed to prominence as he represented adult film actress Stormy Daniels in a nondisclosure dispute with former President Donald Trump, was convicted Friday of stealing from her and was ordered to go to jail, but the judge overseeing the trial will let him check into jail here in Santa Ana.

Avenatti, who has been allowed to stay with a friend in Santa Monica during his various criminal cases, will now have to report to jail in Santa Ana on Monday. U.S. District Judge Jesse Furman in New York City rejected Avenatti’s attempt to remain under house arrest.

U.S. District Judge James Selna, who is overseeing Avenatti’s case in Santa Ana, had recently authorized the defendant’s out-of-custody arrangement through mid-March.

Now the embattled attorney, who represented himself in the Stormy Daniels case and during his first trial in Santa Ana, which resulted in a mistrial in August, will have to work on his case from behind bars.

Avenatti was sentenced in July to 2 1/2 years in prison for attempting to extort as much as $25 million from Nike. He is appealing that conviction.

Avenatti is scheduled to be sentenced May 24 for the Stormy Daniels case. He was convicted of identity theft and wire fraud in getting Daniels’ literary agent to send about $300,000 from her advance on her book “Full Disclosure,” to a bank account the attorney managed. Avenatti argued he was owed the money for legal work on her behalf.

In the Orange County case, Avenatti is accused of stealing settlement money from several clients to help bail out his law firm from bankruptcy, stave off creditors and spend on himself.

Selna granted a mistrial in the case on technical grounds because prosecutors failed to turn over relevant financial evidence to Avenatti. The federal judge did not find any evidence of intentional misconduct on the part of prosecutors, but he essentially determined the failure to disclose the information was tantamount to an oversight.

Avenatti filed an appeal and is arguing the case against him should be thrown out for the failure to disclose evidence and that he cannot be tried again because of a double jeopardy claim. He is arguing that because prosecutors caused the problem, they cannot fairly put him on trial again.

A hearing in the Ninth Circuit Court of Appeals for the federal courts is set for March 14 in Pasadena, Avenatti’s attorney, Dean Steward, said.

Avenatti’s defense team will argue “the government withheld critical evidence and they knew about it,” Steward said. “It’s kind of a (Brady motion) on steroids. We have to show we were goaded into a mistrial motion … and it’s a double-jeopardy claim. They can’t retry it because they caused it.”

Prosecutors have argued in court papers that Avenatti made a “frivolous double-jeopardy argument to delay a retrial that he asked for,” and that the appellate justices don’t have jurisdiction over the claim.

Avenatti has been skirmishing in legal motions with prosecutors over correspondence Avenatti had with a privilege review team going over what can be disclosed in the case.

At issue is accounting information from his former law firm. Avenatti repeatedly argued he was not getting all of the data from his former law firm’s computers, but prosecutors insisted they turned over everything relevant and that they were required to.

Avenatti said he was denied access to information from an accounting software program called Tabs and argued the government’s case was based on data from another accounting software program called QuickBooks.

The difference in the two is QuickBooks was mainly used for clients billed on an hourly basis, but Tabs was used for clients whose cases were taken contingent on winning. Avenatti argued the Tabs data was critical to his defense because it helped his argument that some of the alleged victims were clients he was entitled to bill for various expenses related to winning the settlements.

Avenatti is charged with ripping off at least five clients of nearly $10 million in settlement funds between January 2015 and March 2019.

In California, Avenatti is charged in a 36-count indictment with 10 counts each of wire fraud and failing to file tax returns, eight counts of willful failure to collect and pay over-withheld taxes, two counts of bank fraud, three counts of a false declaration in bankruptcy and one count each of aggravated identity theft and providing false testimony under oath in bankruptcy. His retrial would be only on the 10 counts of wire fraud, with the rest of the case to be tried at a later date.

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