Michael Avenatti is Behind Bars in L.A. After Stormy Daniels Fraud Conviction

The lawyer also has a 30-month federal sentence pending for extorting Nike
1889

Michael Avenatti surrendered at the federal courthouse in Santa Ana on Monday, ending nearly two years of COVID-related home confinement after a New York City jury convicted him of defrauding Stormy Daniels during their 2018 domination of cable TV news.

Hell celebrate his 51st birthday next Wednesday behind bars, likely in Los Angeles, and hes unlikely to see freedom again at least several years, with a 30-month federal sentence pending for his February 2020 convictions for extorting Nike and another prison sentence scheduled to be determined May 24 for defrauding Daniels of money owed to her through a book deal.

Avenatti arrived at the Orange County federal courthouse about 4:15 p.m. PST in a black Buick Enclave driven by a paralegal working his California case, which involves allegations that he stole $10 million from five clients and could carry many more years in prison if convicted. A bifurcated part of the case includes tax and bankruptcy fraud charges. All of it is under appeal to the U.S. 9th Circuit Court of Appeals, and Avenattis lawyers filed their reply to prosecutors’ brief about an hour before he turned himself in.

Asked where he is Tuesday, Avenattis standby counsel in California, Dean Steward, said at the moment MDC. He declined further comment.

The core legal issue in the 9th Circuit appeal involves Avenattis argument that he cant be retried because of a mistrial in August prompted by client billing information stored on his law firm servers seized by the U.S. Department of Justice but not released to him before trial. Prosecutors in the Southern Division of New York, the so-called Mother Court of the American judiciary, managed to keep the issue out of their trial, arguing their case was a straight contract issue that didnt involve client billing, so costs associated with his representation of Daniels are irrelevant. The judge in that case, U.S. District Judge Jesse Furman agreed, noting that Avenatti has had the full server data since September and calling it a red herring. A distraction. Smoke and mirrors.

I dont know what metaphor you want to use, Furman said.

The two-week trial introduced the Manhattan jury to an array of Southern California landmarks, including the Montage in Laguna Beach, where Aveanttis law firm holiday party was held in 2017, the Fashion Island shopping center area where his bankrupt law firm was evicted from its office high rise, and the now-defunct Girardi Keese party at the California plaintiffs bar annual mass torts conference in Las Vegas, where Avenatti lamented his financial woes to a friend.

It also introduced to the jury a lengthy description in their written instructions of the California State Bar duties Avenatti had been sworn to uphold, and it put Avenatti and Daniels in the same air as Trumps former lawyer who paid Daniels the hush money over her affair with Trump, Michael Cohen, with Cohen snagging a rare public courtroom seat for Daniels testimony .

Avenattis fraud against Daniels involved her publishing deal for her book Full Disclosure, which promised her $800,000 in four payments, minus a 15 percent fee for her literary agent, Luke Janklow of the Manhattan firm his father founded, Janklow & Nesbit. But as established in trial, Avenatti formed a fast friendship with Janklow, and he persuaded him not to discuss finances with Daniels while redirecting her second and third payments to a new account in his name.

Janklow was a key prosecution witness, too, taking the stand as the first trial witness and testifying about messages between himself and Avenatti that showed Janklow was smitten with Avenatti and believed him to be a stone-cold mother fucking professional and a modern day Clarence Darrow when in fact Avenatti was using Janklow to defraud Daniels.

Janklow told Avenatti in one message displayed in court: You are not dependent on stormy. She was the foot you kicked down the door with, and testimony revealed Avenatti at one point had a $2 million book deal with Janklow, but he only collected $475,000 and the book never happened. Janklow never said why: Furman halted the questioning at the request of Avenattis defense.

Janklow stuck with Avenatti into February 2019 but eventually provided Daniels an accounting of her payments after the book publisher, Elizabeth Beier of St. Martins Press, spoke with Daniels on the phone, and realized Daniels wasnt confused – she really hadnt received her third payment, even though the publisher had sent it to Avenatti long ago.

According to testimony, Avenatti also took Daniels’ second payment – $148,750 – but reimbursed her five weeks later with a loan from celebrity attorney Mark Geragos. Thats according to testimony from Glendale lawyer Sean Macias, a colorful character who captivated the courtroom from the witness stand with his emphatic denials that his house and office has ever been raided by the feds, and his wistful, protective affection for a client Avenatti asked him about in cross-examination, Spice Girl Mel B.

But the Geragos loan was the central part of Macias’ testimony, and it helped prosecutors establish a pattern with Avenatti that culminated with his outright theft of Daniels’ third payment, also $148,750, which she testified shes still never received.

Aveantti tried to refute Macias’ testimony by showing jurors a text message Macias sent him before the Geragos loan that said Macias would get Avenatti some do-re-mi so he could run like a banshee for U.S. president. Prosecutors tried to keep it out of evidence, but Furman said while allowing it, Certainly theres a valid argument that do-re-mi is a reference to dough, which is a reference to money.

Jurors never considered an actual dollar figure in their deliberations. But prosecutors told Furman in court that the figure at issue in the case is third payment of $148,750, not the second. That will matter a great deal at sentencing, which is currently scheduled for May 24 in Manhattan, because wire fraud sentences are tied to the amount of money involved in the crime. Wire fraud carries a maximum sentence of 20 years, but under federal sentencing guidelines, Avenatti faces about 24 to 30 months for the $148,750, including more time because he was in a position of trust. Then aggravated identity theft carries two years that must be served consecutively, so together, hes looking at about four years in prison. And thats on top of the 30 months hes already to serve in the Nike extortion case.

But right now, the time Avenatti is serving isnt counting toward any prison sentence. Its pre-sentence detainment he agreed to with New York prosecutors to avoid being locked up immediately following the jury verdict last Friday.

On Monday, he filed a request with the trial judge in his California case, U.S. District Judge James Selna, asking to be housed at the jail in Santa Ana rather than the Metropolitan Detention Center in downtown Los Angeles, so he can be closer to his standby counsel as he prepares for his retrial. (Oral argument in his 9th Circuit appeal is scheduled for March 10 in Pasadena; it will be live streamed online.)

Housing me at the MDC will make this process practically impossible and substantially interfere with my ability to mount a defense in this case, Avenatti wrote, citing the location of his standby counsels’ offices in Orange County. But Selna declined early Tuesday because Avenatti is in custody per Furmans case, not his. That means Avenatti likely will stay housed at the federally controlled MDC, rather than the Orange County sheriff-controlled Santa Ana jail until theres a hearing in Selnas case.

To give Selna jurisdiction over his placement, Avenatti could ask the judge to rescind the COVID-related home confinement order thats been in place since April 2020. Avenatti also can ask Furman to order him placed in Santa Ana, but Furman is unfamiliar with California jail facilities, and he also made it clear during trial he was appalled by Avenattis crimes and not impressed by his defense tactics.

Avenatti moved to represent himself pro se midway through the prosecution;s questioning of its second witness, his ex-paralegal, Judy Regnier, who testified via video from Arizona. Regnier worked for Avenatti up until federal agents raided her home on a cul-de-sac in Yorba Linda the day of Avenattis arrest in New York in March 2019. Shes been a key figure in each of the three prosecutions, testifying in the Nike trial as well as the California client fraud trial last summer.

Furman closely policed Avenattis work from there on out, sometimes cutting him off mid question by saying sustained, even though prosecutors had not yet made an objection for the judge to sustain.

A 2011 President Obama appointee whose brother, Jason, was Obamas economic adviser, Furman also repeatedly hammered Avenatti outside the jury when discussing legal issues with the attorneys, at one point telling him: Mr. Avenatti, you have a tendency to just lump 20 things together in one effort to throw spaghetti at the wall and see what sticks. He also later told him, “Sometimes when you have no legal defense, you have no legal defense regarding Avenattis argument that he had a good faith belief he was entitled to Daniels’ book money and thus is not guilty of a crime. Furman said the good-faith defense doesnt account for Avenatti lying to Daniels after he took the money.

“You were not entitled to take this money without telling Ms. Daniels,” Furman said.

The judge also spoke of the need to police Avenattis closing argument so that he didnt essentially testify without subjecting himself to cross examination. 

You’re not going to confuse me, and Mr. Avenatti, I am going to do everything in my power to make sure you dont confuse the jury,” Furman said.

Avenatti had said during trial he was strongly considering testifying, but he opted not to after prosecutors detailed their plans to question him about his Nike extortion convictions and the client fraud allegations in California. He didnt end up calling a single witness in his case.

Furman pressed jurors to keep deliberating after they announced a deadlock after 4 1/2 hours of deliberation over two days, then re-read them an instruction on Aveanttis good-faith defense but rejected prosecutors’ later request for clarification. The jury later asked for help with a single holdout who a note said refused to deliberate and does not understand the job of this jury, and Furman instructed them to keep deliberating, rejecting Avenattis call for a mistrial. The verdict form shows the jury checked then crossed out the not guilty boxes.

Avenatti said after the verdict hed immediately begin working on his appeal.

Im very disappointed in the jury’s verdict. I am looking forward to a full adjudication of all the issues on appeal, he told reporters.

Daniels’ new lawyer, Clark Brewster, said Daniels is relieved this nightmare is over.

The forgery of her name and his concealed directive to wire the money to him was irrefutable. Still, Mr Avenatti possessed the uncanny ability to steadfastly deny the crimes and persuade others he was entitled to the embezzled funds, Brewster said. Stormy is pleased that the justice system worked.

 Meghann M. Cuniff is a legal affairs journalist in California who attended Avenattis recent trial in New York City. Shes on Twitter @meghanncuniff.


Want the Daily Brief in your inbox? Sign up for our newsletters today.