![\"GP:](\"https:\/\/image.cnbcfm.com\/api\/v1\/image\/105841313-1554823669858gettyimages-1134337801.jpeg?v=1554823728&w=740&h=508\")
<\/div>\n<\/div>\n<\/div>\nMichael Avenatti gestures while addressing the media outside the Ronald Reagan Federal Courthouse in Santa Ana, California on April 1, 2019, following his appearance at a US District Court on a criminal complaint charging him with bank and wire fraud.<\/h5>\nFrederic J. Brown | AFP | Getty Images<\/h5>\n<\/div>\n<\/div>\n<\/div>\n\nCelebrity lawyer Michael Avenatti was slammed Thursday with\u00a0a 36-count indictment by a federal grand jury in California that accuses him of ripping off clients\u2014 including a mentally ill paraplegic \u2014 for millions of dollars, shorting the IRS of millions more, swiping millions\u00a0of\u00a0dollars in employment taxes from his coffee company<\/a>,\u00a0and perjury.<\/p>\nThe indictment, scheduled to be discussed by the U.S. Attorney Nick Hanna and IRS officials in Los Angeles at 9 a.m. PT, comes more than two weeks after\u00a0federal prosecutors in Los Angeles and New York hit Avenatti with separate criminal complaints.<\/a><\/p>\n\n<\/div>\n<\/div>\nHanna, in a statement, said that Avenatti\u2019s allegedly criminal conduct spanned four distinct areas, which \u201care all linked to one another because money generated from one set of crimes appears in other sets \u2013 typically in the form of payments to lull victims and to prevent Mr. Avenatti\u2019s financial house of cards from collapsing.\u201d<\/p>\n
In the case in New York, the 48-year-old Avenatti is accused of trying to extort up to $25 million from athletic shoe giant\u00a0Nike<\/a>\u00a0by threatening to expose alleged bribery of amateur basketball players and their families unless the company coughed up cash to Avenatti and a client.<\/p>\nReached for comment, Avenatti told CNBC in a text message, \u201cFor 20 years I have represented Davids vs. Goliaths and relied on due process and our system of justice.\u201d<\/p>\n
\u201cAlong the way, I have made many powerful enemies. I am entitled to a FULL presumption of innocence and am confident that justice will be done once ALL of the facts are known,\u201d Avenatti added.<\/p>\n
In a subsequent tweet, Avenatti said, \u201cI intend to fully fight all charges and plead NOT GUILTY. I look forward to the entire truth being known as opposed to a one-sided version meant to sideline me.\u201d<\/p>\n
The\u00a0new,\u00a061-page indictment\u00a0unsealed\u00a0in\u00a0U.S.\u00a0District\u00a0Court\u00a0for\u00a0the\u00a0Central\u00a0District\u00a0of\u00a0California\u00a0in\u00a0Santa\u00a0Ana alleges\u00a0that Avenatti\u00a0for\u00a0years hid and\u00a0then\u00a0completely\u00a0spent\u00a0a $4 million legal settlement\u00a0obtained\u00a0in January 2015 in favor of a mentally ill paraplegic client<\/a>, and hid a $2.75 million settlement for another client that Aventatti allegedly used to help pay for the purchase of a private jet.<\/p>\nMost of the money for the paraplegic client allegedly was funnelled to a company that managed Avenatti\u2019s race-car team, and to his coffee company, Global Baristas, which operated the Tully\u2019s chain.<\/p>\n
The indictment says that because Avenatti failed to respond to the U.S. Social Security Adminstration\u2019s request for information about the paraplegic, that client had his Supplemental Security Income benefits discontinued in February.<\/p>\n
In all, five clients were allegedly ripped off for millions of dollars by Avenatti, who also is accused of using shell companies and other means to hide the purported thefts.<\/p>\n
The grand jury said Avenatti \u201cwould misrepresent, conceal, and falsely describe to the clients the true terms of\u201d the more than $12 million in settlements that he had obtained for them in their civil cases. And he would also allegedly lie to the clients by saying the settlements had not yet been paid, or that they were delayed for legitimate reasons.<\/p>\n
The indictment said that in some cases, such as with the paraplegic, Avenatti would give a client funds which he claimed were \u201cadvances\u201d on the \u201cthe purportedly yet-to-be received settlement proceeds.\u201d<\/p>\n
Avenatti also is accused in the indictment of taking almost $2.4 million in taxes withheld from the paychecks of workers at Global Baristas,<\/p>\n
And the indictment says that the last time he filed his federal income tax return was in 2011 for the 2010 filing year.<\/p>\n
Prosecutors said Avenatti failed to pay millions of dollars of taxes due the IRS.<\/p>\n
In all, Avenatti is charged with 10 counts of wire fraud, 19 tax-related offenses, two counts of bank fraud, and four counts of bankruptcy fraud. The bankruptcy counts relate to allegedly false statements that Avenatti filed in connection with the bankruptcy of his law firm Eagan Avenatti.<\/p>\n
Federal prosecutors in L.A. accused him in their prior complaint of defrauding a legal client by looting a $1.6 million civil settlement for that man to pay for Avenatti\u2019s personal and business expenses.<\/p>\n
He was also accused in that case of defrauding a Mississippi bank by using bogus federal income tax returns to apply for and receive $4 million in loans.<\/p>\n
The allegations in that complaint are restated in the indictment unsealed Thursday.<\/p>\n<\/div>\n
\n![](\"https:\/\/image.cnbcfm.com\/api\/v1\/image\/105839684-190408cbavenatti.jpg?v=1554755844&w=750&h=422\")
<\/p>\n\n\nMichael Avenatti<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\nAvenatti is free on $300,000 bail.<\/p>\n
He is scheduled to be arraigned on the indictment on April 29 in federal court in Santa Ana.<\/p>\n
As with the California case, Avenatti is expected to be indicted by a grand jury in the New York case. Unless defendants in federal criminal cases agree to plead guilty, prosecutors have to obtain a grand jury indictment to push a case toward trial after filing a complaint.<\/p>\n
Avenatti told CNBC\u2019s \u201cClosing Bell<\/a>\u00a0\u201d on Monday that\u00a0Nike \u201cpulled a stunt\u201d by having him arrested in New York before he could go public with his claims that the company was bribing high school hoop players to coax them into attending Nike-sponsored colleges.<\/a><\/p>\nAvenatti told CNBC that Nike \u201chas been covering up this scandal for over five years.\u201d<\/p>\n
\u201cThey knew they could not control me. … They effectively had to shoot the messenger.\u201d<\/p>\n
Avenatti gained notoriety in 2018 for his representation of porn star Stormy Daniels in her legal cases against President\u00a0Donald Trump<\/a>\u00a0and his former personal lawyer and fixer,\u00a0Michael Cohen<\/a>.<\/p>\nDaniels was paid $130,000 by Cohen on the eve of the 2016 presidential election in exchange for her agreement to keep quiet about what she has said was a one-time sexual tryst with Trump a decade before. Trump denies having sex with her.<\/p>\n
Cohen last year pleaded guilty to multiple federal crimes, including campaign finance violations related to his facilitating the payment to Daniels, and to a hush money deal paid by The National Enquirer to another self-admitted Trump paramour, Playboy model Karen McDougal. Trump likewise denies McDougal\u2019s claim of an affair.<\/p>\n
Cohen is set to begin serving a three-year prison term next month.<\/p>\n
Daniels replaced Avenatti with a new lawyer last month.<\/p>\n
When he was arrested on March 25, Daniels released a statement saying, \u201cKnowing what I know now about Michael, I\u2019m saddened but not shocked regarding his arrest.\u201d<\/p>\n
\u201cI made the decision weeks ago to terminate Michael\u2019s services after discovering that he had dealt with me extremely dishonestly, and I will have my own announcement coming soon.\u201d<\/p>\n
Read the indictment against Michael Avenatti:<\/strong><\/p>\n<\/div>\n\n
Celebrity lawyer Michael Avenatti was slammed Thursday with\u00a0a 36-count indictment by a federal grand jury in California that accuses him of ripping off clients\u2014 including a mentally ill paraplegic \u2014 for millions of dollars, shorting the IRS of millions more, swiping millions\u00a0of\u00a0dollars in employment taxes from his coffee company<\/a>,\u00a0and perjury.<\/p>\n The indictment, scheduled to be discussed by the U.S. Attorney Nick Hanna and IRS officials in Los Angeles at 9 a.m. PT, comes more than two weeks after\u00a0federal prosecutors in Los Angeles and New York hit Avenatti with separate criminal complaints.<\/a><\/p>\n Hanna, in a statement, said that Avenatti\u2019s allegedly criminal conduct spanned four distinct areas, which \u201care all linked to one another because money generated from one set of crimes appears in other sets \u2013 typically in the form of payments to lull victims and to prevent Mr. Avenatti\u2019s financial house of cards from collapsing.\u201d<\/p>\n In the case in New York, the 48-year-old Avenatti is accused of trying to extort up to $25 million from athletic shoe giant\u00a0Nike<\/a>\u00a0by threatening to expose alleged bribery of amateur basketball players and their families unless the company coughed up cash to Avenatti and a client.<\/p>\n Reached for comment, Avenatti told CNBC in a text message, \u201cFor 20 years I have represented Davids vs. Goliaths and relied on due process and our system of justice.\u201d<\/p>\n \u201cAlong the way, I have made many powerful enemies. I am entitled to a FULL presumption of innocence and am confident that justice will be done once ALL of the facts are known,\u201d Avenatti added.<\/p>\n In a subsequent tweet, Avenatti said, \u201cI intend to fully fight all charges and plead NOT GUILTY. I look forward to the entire truth being known as opposed to a one-sided version meant to sideline me.\u201d<\/p>\n The\u00a0new,\u00a061-page indictment\u00a0unsealed\u00a0in\u00a0U.S.\u00a0District\u00a0Court\u00a0for\u00a0the\u00a0Central\u00a0District\u00a0of\u00a0California\u00a0in\u00a0Santa\u00a0Ana alleges\u00a0that Avenatti\u00a0for\u00a0years hid and\u00a0then\u00a0completely\u00a0spent\u00a0a $4 million legal settlement\u00a0obtained\u00a0in January 2015 in favor of a mentally ill paraplegic client<\/a>, and hid a $2.75 million settlement for another client that Aventatti allegedly used to help pay for the purchase of a private jet.<\/p>\n Most of the money for the paraplegic client allegedly was funnelled to a company that managed Avenatti\u2019s race-car team, and to his coffee company, Global Baristas, which operated the Tully\u2019s chain.<\/p>\n The indictment says that because Avenatti failed to respond to the U.S. Social Security Adminstration\u2019s request for information about the paraplegic, that client had his Supplemental Security Income benefits discontinued in February.<\/p>\n In all, five clients were allegedly ripped off for millions of dollars by Avenatti, who also is accused of using shell companies and other means to hide the purported thefts.<\/p>\n The grand jury said Avenatti \u201cwould misrepresent, conceal, and falsely describe to the clients the true terms of\u201d the more than $12 million in settlements that he had obtained for them in their civil cases. And he would also allegedly lie to the clients by saying the settlements had not yet been paid, or that they were delayed for legitimate reasons.<\/p>\n The indictment said that in some cases, such as with the paraplegic, Avenatti would give a client funds which he claimed were \u201cadvances\u201d on the \u201cthe purportedly yet-to-be received settlement proceeds.\u201d<\/p>\n Avenatti also is accused in the indictment of taking almost $2.4 million in taxes withheld from the paychecks of workers at Global Baristas,<\/p>\n And the indictment says that the last time he filed his federal income tax return was in 2011 for the 2010 filing year.<\/p>\n Prosecutors said Avenatti failed to pay millions of dollars of taxes due the IRS.<\/p>\n In all, Avenatti is charged with 10 counts of wire fraud, 19 tax-related offenses, two counts of bank fraud, and four counts of bankruptcy fraud. The bankruptcy counts relate to allegedly false statements that Avenatti filed in connection with the bankruptcy of his law firm Eagan Avenatti.<\/p>\n Federal prosecutors in L.A. accused him in their prior complaint of defrauding a legal client by looting a $1.6 million civil settlement for that man to pay for Avenatti\u2019s personal and business expenses.<\/p>\n He was also accused in that case of defrauding a Mississippi bank by using bogus federal income tax returns to apply for and receive $4 million in loans.<\/p>\n The allegations in that complaint are restated in the indictment unsealed Thursday.<\/p>\n<\/div>\n Avenatti is free on $300,000 bail.<\/p>\n He is scheduled to be arraigned on the indictment on April 29 in federal court in Santa Ana.<\/p>\n As with the California case, Avenatti is expected to be indicted by a grand jury in the New York case. Unless defendants in federal criminal cases agree to plead guilty, prosecutors have to obtain a grand jury indictment to push a case toward trial after filing a complaint.<\/p>\n Avenatti told CNBC\u2019s \u201cClosing Bell<\/a>\u00a0\u201d on Monday that\u00a0Nike \u201cpulled a stunt\u201d by having him arrested in New York before he could go public with his claims that the company was bribing high school hoop players to coax them into attending Nike-sponsored colleges.<\/a><\/p>\n Avenatti told CNBC that Nike \u201chas been covering up this scandal for over five years.\u201d<\/p>\n \u201cThey knew they could not control me. … They effectively had to shoot the messenger.\u201d<\/p>\n Avenatti gained notoriety in 2018 for his representation of porn star Stormy Daniels in her legal cases against President\u00a0Donald Trump<\/a>\u00a0and his former personal lawyer and fixer,\u00a0Michael Cohen<\/a>.<\/p>\n Daniels was paid $130,000 by Cohen on the eve of the 2016 presidential election in exchange for her agreement to keep quiet about what she has said was a one-time sexual tryst with Trump a decade before. Trump denies having sex with her.<\/p>\n Cohen last year pleaded guilty to multiple federal crimes, including campaign finance violations related to his facilitating the payment to Daniels, and to a hush money deal paid by The National Enquirer to another self-admitted Trump paramour, Playboy model Karen McDougal. Trump likewise denies McDougal\u2019s claim of an affair.<\/p>\n Cohen is set to begin serving a three-year prison term next month.<\/p>\n Daniels replaced Avenatti with a new lawyer last month.<\/p>\n When he was arrested on March 25, Daniels released a statement saying, \u201cKnowing what I know now about Michael, I\u2019m saddened but not shocked regarding his arrest.\u201d<\/p>\n \u201cI made the decision weeks ago to terminate Michael\u2019s services after discovering that he had dealt with me extremely dishonestly, and I will have my own announcement coming soon.\u201d<\/p>\n Read the indictment against Michael Avenatti:<\/strong><\/p>\n<\/div>\n<\/p>\n