Avenatti pleads guilty to California tax fraud and charges

Avenatti pleads guilty to California tax fraud and charges

SANTA ANA, Calif. (AP) — Jailed attorney Michael Avenatti pleaded guilty Thursday to four counts of wire fraud and one tax-related charge in a Southern California federal court case that accuses him of to swindle their customers out of millions of dollars.

Avenatti, who is in federal custody and is representing himself in the case, pleaded guilty during a court hearing in Santa Ana, where he acknowledged misleading his clients but disagreed with federal prosecutors about how much.

“I misappropriated and misused some of your settlement funds,” Avenatti told the court, but added that he believes the amount owed in restitution is “drastically less” than the $9 million declared by the government.

Prosecutors said the plea, which the 51-year-old attorney offered without a plea deal, subjects Avenatti to up to 83 years in prison. They said they will decide Monday whether to try him on the remaining counts in a 36-count indictment accusing him of defrauding customers by negotiating and collecting settlement payments on their behalf and funneling the money to accounts he controlled as well as bank fraud and bankruptcy. .

“Michael Avenatti has finally admitted what the IRS criminal investigation and the US Attorney’s office have been saying for several years: that he committed audacious acts to steal money from his clients to line his own pockets,” the assistant US attorney told reporters. Brett Sagel.

“Today is the first step before the government decides what to do with the remaining charges, and now he will be sentenced for at least his conduct in violating his duties to his clients and his duties as a taxpayer.”

A sentencing hearing is set for September 19, but will be delayed if the government pursues the other charges.

The guilty plea came after Avenatti, who is suspended from practicing law in California, filed court papers this weekend saying that while he did not reach a plea deal with federal prosecutors, he wanted to change his plea. and save your family more embarrassment. .

Avenatti is serving five years in prison at a federal facility in California for convictions in two cases in New York. He was found guilty of stealing book proceeds from Stormy Daniels, the porn actor who catapulted him to fame when he represented her in court and on cable news shows during her legal battles with then-President Donald Trump. He was also convicted of trying to extort Nike if the shoemaker didn’t pay him up to $25 million.

Avenatti rose to fame after she represented Daniels in her lawsuit to break a confidentiality agreement with Trump to keep quiet about an affair she said they had. She became one of Trump’s main adversaries, attacking him on cable news shows and on Twitter, and at one point considered challenging him in the 2020 presidential election.

In the California case, a mistrial was declared last year after the judge ruled prosecutors failed to provide Avenatti with key financial evidence. He was expected to stand trial on some of the charges next month, followed by a trial on the rest.

Prosecutors said Avenatti collected millions of dollars in payments from clients and used the money to finance a lavish lifestyle instead of paying them their fair share. He was also charged with failing to pay personal income and business taxes and pocketing millions of dollars in payroll taxes from a coffee chain he owned.

In one case, they said Avenatti collected $4 million from Los Angeles County for a man who was injured in custody and left paraplegic after a suicide attempt, but denied receiving the settlement and paid the man smaller amounts ranging from $1,000 to $1,900 that called for advances on the larger deal.

In another case, prosecutors said Avenatti collected a $2.75 million settlement payment for a client and used much of the money to buy a private plane.

Prior to the criminal charges, Avenatti faced numerous legal issues, including a sizable civil lawsuit and bankruptcy proceedings for his law firm.

Federal District Court Judge James V. Selna said the question of how much restitution Avenatti owes has yet to be determined. He asked Avenatti if anyone made promises to him in exchange for his guilty plea, noting that he can sentence him from zero to 83 years in prison.

“No one has given me any guarantees,” said Avenatti, who acknowledged that he was nervous, in court, “because there are no guarantees, Your Honor.”

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