Michael Avenatti stole A LOT more money than we thought, prosecutors say

Michael Avenatti allegedly funded a lavish lifestyle — including a $4.5 million jet — by stealing millions from clients, according to an indictment outlining dozens of new federal charges brought after investigators searched his apartment and office.

The celebrity lawyer is facing 36 new charges in Southern California on allegations that he committed fraud; embezzled money from clients, including millions from a man with disabilities; and set up shell companies to hide money from the government.

Detailing the charges at a press conference in Los Angeles Thursday morning, U.S. Attorney Nick Hanna said Avenatti allegedly “pilfered” millions to fund his personal purchases and his businesses, including a $4.5 million jet for his Passport 420 company. Hanna noted the jet was seized by the feds on Wednesday.

Hanna cited four areas of criminal conduct alleged in the indictment — wire fraud, tax fraud, bankruptcy fraud, bank fraud — and said they're "all linked to one another because money generated from one set of crimes was used to further other crimes — typically in the form of payments to lull victims and to prevent Mr. Avenatti’s financial house of cards from collapsing.”

Best known for representing adult film actress Stormy Daniels, Avenatti could face up to 333 years in prison if he’s convicted on all counts, according to U.S. prosecutors. And that’s just for the Southern California case; Avenatti was also arrested in New York last month for a separate federal investigation into allegations that he attempted to extort Nike for more than $20 million. In California, he was initially charged only with bank and wire fraud, although the investigation has rapidly expanded since federal agents executed search warrants on his apartment and office.

Avenatti denied the new charges in a tweet on Thursday and said he intends to plead not guilty.

In the indictment released by the Department of Justice Thursday and first reported by the Los Angeles Times, federal prosecutors and investigators with the Internal Revenue Service detailed how Avenatti hid a $4 million settlement from his client, Geoffrey Ernest Johnson, a mentally ill paraplegic on disability, who was supposed to receive the money in 2015 after he settled a lawsuit over his treatment at a correctional facility, according to the Los Angeles Times. The man sued because he was suicidal and jumped from the upper floor of the jail, injuring himself. The money Johnson was supposed to receive, however, ended up in the accounts for Avenatti’s race-car team company, Autosport, and his coffee company, Global Baristas, according to the Los Angeles Times.

Because Johnson did not receive adequate information from Avenatti on the settlement and couldn’t inform the Social Security Administration on how much he should be paid, he was cut off from the government disability checks.

Avenatti also allegedly hid $2.5 million from another client’s legal settlement and used part of it to buy a private jet for a company he owned called Passport 420, a Los Angeles-based grand jury found. The exact amount of how much he embezzled in total is unclear, though, because typically a portion of settlements goes toward legal fees.

Avenatti also allegedly lied to federal tax investigators about taking $2.3 million in withheld taxes from the employees of his coffee company. He’s also accused of bank fraud after allegedly submitting incorrect financial information to The People’s Bank in Mississippi so he could be approved for a $4.1 million loan.

In the separate New York case, Avenatti threatened to go public with allegations of misconduct by Nike employees, demanded to be paid, and told he company he wasn’t “fucking around.” He could face up to 47 years if found guilty on all charges relating to that case, although he hasn’t yet been indicted.

Cover: Attorney Michael Avenatti leaves federal court after a hearing, Monday, April 1, 2019, in Santa Ana, Calif. Avenatti appeared in federal court on charges he fraudulently obtained $4 million in bank loans and pocketed $1.6 million that belonged to a client. (AP Photo/Jae C. Hong)