Lawyer Michael Avenatti arrives for fraud trial: Accused of embezzling $300,000 from Stormy Daniels

The attorney who represented porn star Stormy Daniels in her cases against former President Donald Trump faces trial Monday after he embezzled $300,000 in book contract proceeds from his ex-client.

Michael Avenatti, who was seen walking into a Manhattan courthouse Monday morning for his fraud trial, is accused of misappropriating funds intended for Daniels in part by forging her signature in a letter to an agent.

According to his indictment, Avenatti used the embezzled funds to purchase a Ferrari, to pay for airfare and hotel stays, as well as to cover the salaries of employees working at both his law firm and coffee business. 

‘The defendant stole almost $300,000 from the person he was supposed to be looking out for,’ federal prosecutor Andrew Rohrbach said in his opening statement.  ‘This case is not about her jobs, what she does for money. It’s about a fraud that was committed.’  

However, the defense alleges Daniels failed to provide Avenatti with the agreed upon compensation for helping with her 2018 memoir, Full Disclosure.

‘What we have in this case, members of the jury, is a disagreement, a fee dispute, between an attorney and his disgruntled client,’ defense attorney Andrew John Dalack fired back. ‘This case is about Ms. Daniels not wanting to uphold her end of the contract that she signed.’

Avenatti, 50, faces charges of wire fraud and aggravated identity theft and has pleaded not guilty. He faces up to 22 years in prison if convicted. 

Avenatti has vehemently denied the fraud accusations saying, in a statement issued to the Associated Press through a publicist this weekend: ‘I am completely innocent of these charges.’ 

‘The government is spending millions of dollars to prosecute me for a case that should have never been filed. Meanwhile, they continue to allow Trump and his co-conspirators to walk free and suffer no consequences for their criminal conduct. That is not justice.’ 

During opening statements Monday, Rohrbach blasted Avenatti for stealing from Daniels, saying: ‘This is a case about a lawyer who stole from his client.’

‘He was supposed to be her advocate.’

The prosecutor argued that Avenatti stole two book deal payments, totaling about $300,000, from Daniels, despite not having been entitled to any part of the deal, according to pool reporters in the courthouse.

The famed attorney reportedly told Daniels he ‘wouldn’t take a penny’ of the money. He was, however, to be paid a percentage – which was ‘to be agreed upon – for any help with the deal.

The prosecutor, noting that Daniels will testify during the trial, alleged Avenatti lied to the porn star, telling her via text the agency wasn’t paying her, when he had actually pocketed the funds himself.

‘She will take the stand. She will walk you through the text messages between her and the defendant,’ he said, adding: ‘She didn’t know that her lawyer had already stolen her money.’

Rohrbach also accused Avenatti of being ‘desperate for money’ and lying ‘to cover up his scheme’.

He also noted the case should not focus on Daniels’ profession, but instead on the ‘fraud that was committed’.

‘Ms. Daniels has a lot of job, she is an entertainer. She’s been in adult films, she’s on a show about paranormal activity, but adult actresses and paranormal investigators can be victims of fraud and identity theft, just like anyone else,’ he said.  

Dalack blasted the prosecutor’s allegations, arguing that Daniels failed to honor her agreement with his client and ‘wanted all the benefits of zealous, fierce and loyal representation without having to pay.’

The defense argued the government painted a picture that made it appear as though Daniels, whom he referred to as an adult film actress of ‘moderate notoriety,’ already had a book deal ‘in hand’. 

‘Ladies and gentlemen of the jury, that could not be farther from the truth,’ Dalack argued, saying Avenatti helped Daniels achieve her ‘lifelong dream’ of publishing a memoir and without his help, she would have been unsuccessful.

‘Mr. Avenatti accomplished what few attorneys in America could. He transformed a rather obscure adult performer into a household name,’ Dalack said. 

He also slammed the actress and her alleged paranormal beliefs, such as being able to see dead people or talk to dolls. 

‘Members of the jury, I submit talking to dolls might not be unusual. My kids do it all the time, but when the dolls talk back to you, that’s unusual,’ he stated. 

Daniels is not expected to testify until Tuesday, at the earliest. 

Analysts allege her testimony will be pivotal for prosecutors trying to prove Avenatti engaged in wire fraud and aggravated identity theft to keep from giving his client money he had received from her publisher.  

Avenatti, a fierce critic of Trump, gained wide attention and became ubiquitous on cable TV news when he represented Daniels, whose real name is Stephanie Clifford.

Daniels said she had a sexual liaison with the ex-president and received $130,000 before the 2016 presidential election in exchange for not discussing her encounter with Trump, who denies it happened. 

Avenatti represented Daniels in a lawsuit seeking to invalidate the nondisclosure agreement, which Daniels won, and a defamation case against Trump, which she lost. 

His career ended abruptly in 2019 as prosecutors in New York and California brought dozens of criminal charges that could land him in prison for the rest of his life.

His lawyers asked on Saturday for a two-week delay in starting the trial relating to Daniels, saying a court policy that could require some witnesses to wear protective masks to stem the spread of COVID-19 would violate his right under the Sixth Amendment of the U.S. Constitution to confront witnesses face to face.

Avenatti is appealing a February 2020 conviction and 2-1/2-year prison sentence for trying to extort up to $25 million from Nike Inc by threatening to expose its alleged corrupt payments to families of college basketball prospects unless it hired him to conduct a probe. Nike has denied wrongdoing.

The lawyer is separately facing federal wire fraud charges in California from prosecutors who say he embezzled nearly $10million from five clients.

Since his March 2019 arrest in the Nike case, Avenatti has spent most of his time confined at a friend’s California home.