NEW YORK — A federal grand jury in Manhattan indicted celebrity attorney Michael Avenatti on Wednesday in two alleged schemes, charging him with fraud and aggravated identity theft involving his former client, Stormy Daniels, and with attempting to extort more than $20 million from sportswear giant Nike.
Avenatti was charged with having stolen “a significant portion” of Daniels’ advance for her book contract, according to court papers, and used that money to pay employees of his law firm and a coffee business he owned. Daniels isn’t named in the indictment, but she is the individual referred to as “Victim-1,” according to a person familiar with the matter.
In all, Avenatti stole “approximately $300,000” from Daniels, the indictment states, and has failed to repay her half of that sum.
Avenatti rose to fame during his representation of Daniels, the adult-film actress who was a central figure in the hush-money scandal that resulted in Manhattan federal prosecutors charging Michael Cohen — President Donald Trump’s former personal attorney — with campaign-finance violations for money he paid to silence women, including Daniels, who claimed affairs with Trump.
Cohen, who pleaded guilty to those and other crimes, is serving a three-year prison sentence. Trump has denied the alleged affairs.
Daniels, whose legal name is Stephanie Clifford, has since ended her professional relationship with Avenatti, saying that he “had dealt with me extremely dishonestly.”
Avenatti told CNN he will be “fully exonerated.”
“I look forward to a jury hearing all of the evidence and passing judgment on my conduct. At no time was any money misappropriated or mishandled. I will be fully exonerated once the relevant emails, contracts, text messages, and documents are presented,” he said.
Before the indictment was made public, Avenatti tweeted: “No monies relating to Ms. Daniels were ever misappropriated or mishandled. She received millions of dollars worth of legal services and we spent huge sums in expenses. She directly paid only $100.00 for all that she received. I look forward to a jury hearing the evidence.”
The indictment of the high-profile lawyer was expected, although not the specific charges concerning his dealings with Daniels. Earlier this year, prosecutors unsealed a complaint charging Avenatti with the attempted extortion scheme, and he was arrested outside the Manhattan offices of the law firm representing Nike, Boies Schiller Flexner LLP. At the time, he was released on a $300,000 bond.
That day, he was also charged by federal prosecutors in Los Angeles with wire and bank fraud, and he has since been indicted on 36 counts in that case, including embezzlement, wire fraud, tax evasion, bankruptcy fraud and bank fraud connected to his alleged theft of tens of millions of dollars from five clients, one a paraplegic.
This story is breaking and will be updated.