Crime

Did Michael Avenatti Steal Stormy’s Book Advance?

Baby, you really are a firework!

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Michael Avenatti (Photo by Jennifer S. Altman/For The Washington Post via Getty Images)

If I say Michael Avenatti is a spectacular fireball of incompetence and narcissistic self-destruction, will he call me up and scream at me for being a worthless nobody? If I point out that getting criminally indicted twice in the same day on totally unrelated sets of federal charges in New York — with a bonus filing in his trench warfare California bankruptcy case — has to be some kind of record, will he sh*t tweet and tell me I don’t know what I’m talking about?

A girl can dream.

Yesterday, Avenatti was indicted for allegedly shaking down Nike, which he claims paid illegal kickbacks to high school basketball coaches. (Gambling at Rick’s?!?) He managed to shout into several microphones that he was very definitely not looking to increase the payout for his client, and as he “held the balls of the [opposing] client in [his] hand where [he] could take five to six billion dollars market cap off of them,” he strongly suggested the company write him and his buddy Mark Geragos a 10-figure check immediately.

In particular, Attorney-1 asked in substance and in part, whether Nike could resolve the demands just by paying Client-1, rather than by retaining [Geragos]. [Geragos] said that he understood that Nike might like to get rid of the problem in “one fell swoop,” rather than have it “hanging over their head.” AVENATTI stated that he did not think it made sense for Nike to pay Client-1 an “exorbitant sum of money … in light of his role in this.”

Mistakes were made. Indeed, it was quite a mistake for Avenatti to forge Stormy Daniels’s signature so as to divert her book fees into his own personal accounts and spend them on payroll and lease payments for his Porsche. Allegedly.

As described more fully below, after assisting Victim-1 in securing a book contract, AVENATTI stole a significant portion of Victim-1’s advance on that contract. He did so by, among other things, sending a fraudulent and unauthorized letter purporting to contain Victim-1’s signature to Victim-1’s literary agent, which instructed the agent to send payments not to Victim-1, but to a bank account controlled by AVENATTI.

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Prosecutors claim Avenatti contacted Daniels’s publisher to request an accelerated payment schedule, pocketed the advances, and when Daniels herself contacted the publisher months later, believing them to be in arrears, Avenatti told the publisher to disregard her greedy imprecations.

He was also ordered by a bankruptcy magistrate in California to respond to a motion by his former law partner Jason Frank — to whom his firm owes $15 million — demanding that Avenatti’s current criminal lawyers tell him how they’re getting paid so Frank can go attach the account.

All of which happened, YESTERDAY.

Next week, the bankruptcy court will decide whether Jason Frank and his partners at Frank Sims Stolper can be appointed as successor counsel to Avenatti in a class-action suit against Kimberly Clark, since, they, as creditors, have a vested interest in maximizing the firm’s award. Which … okay then.

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And last week, U.S. District Judge James Selna flatly refused to make an exception and grant him a public defender without listing his assets for the court (and the bankruptcy receiver and Jason Frank) to establish his indigence. Will Counselor Blue Eyes be forced to defend himself on charges that he misappropriated client funds in California and submitted false tax returns to secure $4 million of loans from a bank in Mississippi? Well, that will be awkward. Although Avenatti is alleged to have fabricated those returns in their entirety, having failed to pay taxes at all for the years in question. So, the man is nothing if not resourceful!

On second thought, he probably doesn’t have time to call me up and scream obscenities. He’s far too busy pouring lighter fluid on several flaming dumpsters to bother with one more person saying, What the hell happened to you, man? Weren’t You ATL’s 2018 Lawyer of the Year?

Which is kind of a shame, really, since I’d like to thank him for handing us all Michael Cohen and the National Enquirer on a silver platter. Bringing that hush-money payment out was really a public service.

Ah, well. Maybe I can manage to get blocked on Twitter. Fingers crossed!

Indictment, USA v. Avenatti, No. 1:19-cr-00373-1 (S.D.N.Y. May 22, 2019)
Indictment, USA v. Avenatti, No. 1:19-cr-00374-1 (S.D.N.Y. May 22, 2019)
Order to Compel, In Re Eagan Avenatti, LLP, No. 8:18-cv-01644 (C.D. Cal. May 22, 2019)

Michael Avenatti and the Weirdest-Ever Lead Counsel Fight [Reuters]

Elizabeth Dye lives in Baltimore where she writes about law and politics.

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