Michael Avenatti gets 14 years in prison for stealing millions of dollars from clients
Michael Avenatti, the once-swaggering celebrity lawyer who was undone by his proclivity for embezzlement and fraud, was sentenced Monday to 14 years in prison for dodging taxes and stealing millions of dollars from clients.
His sentencing by U.S. District Judge James V. Selna in Santa Ana concludes the last of three federal prosecutions of the former attorney, who gained notoriety for representing adult film star Stormy Daniels in her court battles against former President Trump.
Avenatti accomplished “good things in his life,” but has “also done great evil,” Selna said as he handed down the sentence. He ordered Avenatti to pay $7.6 million in restitution to victims and $3.2 million to the government.
Avenatti, 51, is already serving five years in prison for extortion and fraud convictions at two trials in New York. Selna said he must start serving the 14-year sentence after he completes the current stint behind bars, so the penalty for Avenatti’s full array of crimes is 19 years in prison.
In the Santa Ana case, Avenatti pleaded guilty in June to four counts of wire fraud for stealing money from clients and one count of obstructing collection of payroll taxes from his Seattle coffee business, now defunct.
One of the law clients he robbed, Geoffrey Ernest Johnson, was a mentally ill paraplegic on disability.
“To this day, I do not know why Michael lied and deceived me, why he broke my trust, why he broke my heart,” Johnson wrote in a statement to the court.
Johnson won a $4-million settlement of a suit against Los Angeles County. The money was wired in January 2015 to Avenatti, who kept the bulk of it and lied to Johnson about it. From his wheelchair at the sentencing, Johnson told Selna that Avenatti “really broke me.”
“Next to the incident that caused me to become paralyzed, meeting Michael and having him steal my money is the worst thing that has happened to me,” he said.
Avenatti also admitted stealing from a $2.75-million settlement that his client Alexis Gardner obtained from her former boyfriend Hassan Whiteside, a pro basketball player then with the Miami Heat. Avenatti, who during his crime spree drove a Ferrari, used most of that money to buy a private jet. Selna has approved the government’s request to confiscate the eight-seat Honda HA-420 plane.
Gardner told Selna that Avenatti was a “psychotic con man” who thought nothing of “stepping on all of the small people.” He left her fearful, she said, of anyone who shows kindness. “I don’t know if it’s real,” she said.
Avenatti, who has been incarcerated most recently at the low-security Terminal Island federal prison in San Pedro, represented himself in court despite the suspension of his law license. He asked Selna to impose no more than six years in prison that would run concurrently with the five he is already serving.
“Your honor, I am deeply sorry and remorseful for my criminal conduct,” Avenatti, dressed in sneakers and a beige prison uniform, told the judge. His conduct, he added, “has brought shame upon my family, my friends and my profession.”
At the same time, he said: “At no point in time did I set out to bilk my clients.” He added later: “I am not an evil or vile man.”
He urged Selna in a memo to consider his tough upbringing in Missouri and his representation of thousands of clients “ethically and with great success” as he was becoming one of California’s best-known plaintiff’s lawyers.
The amount of Avenatti’s embezzlement is in dispute. Avenatti said the four clients he admitted defrauding lost $3.4 million; prosecutors argued it was more than $12 million.
“There was no excuse for defendant’s criminal conduct, which was motivated solely by arrogance and greed,” Assistant U.S. Attys. Brett A. Sagel and Ranee A. Katzenstein told Selna in a memo.
Avenatti’s fraud was “cruel,” “callous” and “calculating,” they wrote, and his tax cheating was “massive.” Avenatti stole $3.2 million in federal payroll taxes that his company, Global Baristas U.S., collected from employees of its chain of Tully’s Coffee outlets but failed to pass along to the government, prosecutors said.
“Defendant did not commit his crimes to support his family, pay child support, or for any other arguably mitigating reason; to the contrary, he stole from his clients to live an extravagant lifestyle while some of his victims could barely make ends meet,” they wrote in the memo.
“Michael Avenatti is a corrupt lawyer,” U.S. Atty. Martin Estrada said after the sentencing. “He portrayed himself as someone who fought for the little guy, but in fact he only cared about himself and his own ego.”
Andrew Stolper, an attorney who worked at Avenatti’s law firm in Newport Beach and often clashed with him, said the audacity he displayed in committing such a wide breadth of crimes seemed to be rooted in narcissism.
“None of it makes any sense other than he deluded himself into thinking he could get away with it,” Stolper said. “If you sit down and try to rationally figure out why a successful lawyer would resort to stealing money from his clients and at the same time elevate himself to the national stage, there’s not enough hours in a lifetime to figure that out.”
Avenatti’s fraud and embezzlement were well underway by the time Daniels vaulted him to fame in 2018 by hiring him to sue Trump. Daniels accepted a $130,000 payment just before the 2016 election to keep quiet about her alleged 2006 sexual encounter with Trump, and Avenatti went to court to void the deal.
Avenatti’s bombastic manner made him an instant hit on cable news shows. He became one of Trump’s fiercest critics on television. He traveled to Iowa and New Hampshire to explore a run for the Democratic presidential nomination, but his legal troubles soon spiraled out of control.
Michael Avenatti was caught in a downward spiral of financial trouble last year when Jerry Tobin, an unlikely savior, came to the rescue.
In March 2019, FBI agents arrested Avenatti in Midtown Manhattan for trying to extort as much as $25 million from Nike by threatening the company with negative publicity. Following his conviction at trial, he was sentenced last year to 30 months in prison.
The two New York sentences are partly concurrent, so Avenatti is, in effect, serving five years in prison for the New York cases.
The California indictment was the most sweeping of the three: 36 counts of fraud, perjury, failure to pay taxes, embezzlement and related crimes.
When Avenatti pleaded guilty to five of the charges in June, he had not struck any deal with prosecutors. So he still faced two counts of bank fraud, four counts of bankruptcy fraud, one count of aggravated identity theft, six wire-fraud charges and 18 tax-related charges. At prosecutors’ request, Selna dismissed those charges on Monday.
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