Michael Avenatti Just Arrested by Feds at California State Bar Hearing

LOS ANGELES—Ex-Stormy Daniels lawyer and Trump antagonist Michael Avenatti was led out of the State Bar Court in Los Angeles by federal agents on Tuesday evening.

The arrest occurred outside the disciplinary hearing in which the State Bar of California has accused the hard-charging, tough-talking attorney of using a doctored document to scam a client out of nearly $840,000, funneling money from a lawsuit settlement fund to his own personal use.

The State Bar of California, the official attorney licensing agency, has sought to put Avenatti on “involuntary inactive status,” setting in motion a timeline for disbarment proceedings.

During a break in testimony, members of the United States Attorney’s Office for the Central District of California, who are prosecuting Avenatti in a separate criminal matter in Orange County, parleyed with Avenatti’s team of lawyers and took the lawyer into custody.

“I understand that Mr. Avenatti has been arrested by the federal authorities for violating the terms of his release,” said attorney Steven Bledsoe, who represents the alleged Avenatti victim in the State Bar case and was present when the arrest occurred.

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Former Lawyer Michael Avenatti is taken into custody by federal agents for violating the terms of his pre-trial release in Los Angeles on Tuesday, Jan 14, 2020.

Avenatti was taken into custody at around 6 p.m. PST. When the court resumed, his lead counsel in the disciplinary case, Thomas Warren, told the court that in connection with a criminal matter in Santa Ana, Avenatti was unable to return to court.

Thom Mrozek, a spokesman for the U.S. attorney’s office in Los Angeles, confirmed to The Daily Beat that Avenatti was arrested on allegations of violating the terms of his pre-trial release. Mrozek declined to go into details, as the documents in the case are under seal. “I do expect him to appear in federal court in Santa Ana tomorrow,” he said.

As Avenatti was being led out of the courthouse, the normally garrulous lawyer said simply, “Completely innocent.”

Best known for his public feud with President Trump, Avenatti has criminal matters pending on both coasts. He faces a slew of federal charges in Los Angeles and New York in cases involving alleged extortion, theft of millions of dollars from clients, cheating on taxes and lying to investigators.

The U.S. Attorney for the Southern District, Geoffrey S. Berman, informed the judge in the New York case of Avenatti’s arrest in a letter. It said federal prosecutors in the Central District of California had secured the arrest warrant “with respect to potential violations of the conditions of pretrial release” in connection with the case pending in the Los Angeles area.

Avenatti pleaded not guilty to the charges in April. In New York on a separate case he faces charges that he allegedly demanded millions to stay quiet about claims about Nike paying high school basketball players in an effort to steer them to Nike-sponsored college basketball programs.

A court filing by the government, which the Santa Ana court unsealed on Wednesday after the arrest, alleges that Avenatti committed a slew of state and federal offenses during the 10 months since he was granted pretrial release in California—including mail fraud, wire fraud, and money laundering. By Judge Selna’s estimate, Avenatti engaged in more than 20 cash transactions in excess of $5,000 since he was arraigned in March.

In remanding Avenatti into custody, Judge Selna declared that the former media darling’s release on pretrial bond posed an “economic danger to the community.”

He ruled in favor of federal prosecutors who argued that Avenatti lied to investigators and directed money he was obligated under judicial order to pay to creditors, using it instead to fund a lavish lifestyle that included an $11,000-a-month apartment, expensive artwork and vacations, membership in an exclusive private club, and a luxury car.

Other allegations of fraudulent activity from the court filing include arranging for his first ex-wife, Christine Avenatti Carlin, to use a portion of a $717,000 payment to purchase a $50,000 Mercedes Benz in her name that he and his personal driver repeatedly used to transport him. Avenatti, the document says, completed the paperwork to purchase the Mercedes in his own name on May 6, 2019, but returned days later with Carlin to purchase the car in her name.

Prosecutors also allege that Avenatti used nearly half the proceeds from a $33,000 cashiers check to buy back a piece of art work at auction, despite standing judicial orders to use such money to pay back his numerous creditors.

According to court filing, Avenatti owes roughly $5 million to a former law partner pursuant to a judgment issued in the LA Superior Court; roughly $2.2 million to a former client pursuant to a judgment issued in Santa Barbara Superior Court; roughly $2.5 million to his second wife, Lisa Storie Avenatti, pursuant to spousal and child support orders issued in Orange County Superior Court; and approximately $1.5 million to the Washington State Department of Revenue pursuant to a tax warrant.

Avenatti received the judge’s arrest ruling with a stony expression and was quietly escorted from court in the custody of a federal marshal. He is currently being held in a jail in Santa Ana, which has a contract with the federal government to house prisoners.

Prior to his arrest, Avenatti had been making plans to board a flight to New York in preparation for his trial scheduled to begin on Tuesday. With today’s ruling, he will be transported by authorities and remain in custody while he awaits to the start of his trial.

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