Wednesday, February 21

Michael Avenatti is found guilty of stealing from Stormy Daniels

Four years ago, Stormy Daniels and Michael Avenatti presented a united front against President Donald J. Trump.

Ms. Daniels, a porn film actress, said she had been paid $130,000 just before the 2016 presidential election to keep quiet about a sexual encounter she said she had with Trump years earlier. Her attorney, Mr. Avenatti, filed a lawsuit in 2018 saying that a confidentiality agreement that accompanied the payment was void because Trump had not signed it.

But even as he condemned “thug behavior” directed at Ms. Daniels by “people in power,” Mr. Avenatti was stealing from her, a Manhattan jury found Friday.

After deliberations that stretched over three days and at one point seemed to be headed for a dead end, jurors convicted Mr. Avenatti of wire fraud and aggravated identity theft, concurring with allegations that he used a forged letter to trick Ms. Daniels’s literary agent into sending nearly $300,000 in publisher’s fees intended for her.

“I am very disappointed in the jury’s verdict,” Mr. Avenatti said as he left court. “I look forward to a full adjudication of all matters on appeal.”

Mr. Avenatti, who is scheduled to be sentenced on May 24, faces a maximum prison term of 20 years on the wire fraud charge and a mandatory two years on the aggravated identity theft charge.

Jurors indicated twice during their deliberations that they were struggling to reach an agreement. Early Thursday, just about four hours after they began deliberating, they sent a note to the judge, Jesse M. Furman, saying they couldn’t reach a consensus on the wire fraud charge. He encouraged them to keep trying.

On Friday morning, the jury said in a note that one panel member was refusing to “see” the evidence and was “acting on sentiment.” Judge Furman again told jurors to continue deliberating, instructing them to “not get carried away with sympathy or emotion.” His verdict came soon after.

The conviction, in Federal District Court, is the latest blow to Avenatti, a brash California lawyer who rose to prominence while representing Daniels, appearing regularly on television and taunting Trump on Twitter.

For a time, Ms. Daniels and Mr. Avenatti were stars in what was sometimes called “the resistance” to the Trump presidency and policies. Some people believed the two could bring down Trump, who has denied Daniels’ accusations.

Capitalizing on her growing popularity, Ms. Daniels, whose legal name is Stephanie Clifford, signed an $800,000 contract to write a book, “Full Disclosure,” for St. Martin’s Press. Mr. Avenatti briefly flirted with the idea of ​​running for president. But their alliance dissolved amid bitterness in early 2019 after Daniels accused Avenatti of stealing.

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Since then, Mr. Avenatti has been criminally charged in several cases. He was convicted in 2020 of trying to extort millions of dollars from Nike. An attorney representing him in that case subsequently filed a notice of appeal.

In a separate case, Mr. Avenatti was accused of stealing millions of dollars from five clients, including a paraplegic man who won a $4 million settlement from Los Angeles County, and lying about his business and income. That case resulted in a mistrial last year after a judge ruled that prosecutors had withheld financial data from the defense.

If that result led Avenatti to believe he could save his reputation as a populist lawyer who helped the underdog, his conviction in the case involving Daniels would seem to all but extinguish that prospect.

“The defendant was a lawyer who stole from his own client,” the prosecutor, Robert Sobelman, told the jury during closing arguments on Wednesday. “She thought he was her advocate, but he betrayed her and told lies to try to cover it all up.”

During his own closing argument, Mr. Avenatti, who represented himself at trial, told the jury that there was insufficient evidence to show that he had intended to “defraud” or “harm” Ms. Daniels. .

“It is the burden of the government, it is their obligation, to show them that I had fraudulent intentions and lacked good faith,” Avenatti said, adding: “They have not done that.”

He concluded with an unusual statement: “Ladies and gentlemen, the case that the government is trying to feed you has a giant cockroach in the middle of the plate. Would you eat that dish or would you send it back?

During trial, prosecutors presented evidence that Mr. Avenatti had emailed a letter with what was purported to be Ms. Daniels’ signature to his literary agency, Janklow & Nesbit Associates, ordering that payments from St. Martin will be sent to a bank account controlled by Mr. Avenatti.

Prosecutors said Avenatti spent the money on his law firm’s payroll, plane tickets, restaurants and a monthly lease payment of about $3,900 for a Ferrari. Although he ultimately sent Ms. Daniels about half of the money she received, prosecutors added, she never received the rest.

Mrs. Daniels testified that she had not given Mr. Avenatti permission to take any of her payments from St. Martin’s. And she said he had repeatedly lied to her when she asked for his help in getting what she believed was money the publisher owed her.

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Dozens of text messages between the two were shown on a courtroom screen. They showed Mr. Avenatti promising to help Ms. Daniels and at one point saying that he was “threatening litigation” against St. Martin’s.

Her scheme came to light in February 2019, after Ms. Daniels spoke to people at her literary and publishing agency. Three months later, Mr. Avenatti was charged.

The trial took several unusual turns. On the second day of testimony, Judge Furman granted Mr. Avenatti’s request that she be allowed to act as his own attorney. That allowed him to cross-examine witnesses, including Ms. Daniels.

Questioning his former client and comrade, Mr. Avenatti turned his interest to supernatural matters, asking if a “dark entity” had ever entered his New Orleans home through a “portal” and about his claim that he could talk to people who had died. .

Ms. Daniels testified that a medium told her about the dark entity’s visit and she acknowledged saying that she believed she could speak to the dead, although she was unable to explain exactly how. “It just happens sometimes,” she said.

He also explained his involvement in a project called “Spooky Babes,” described on its website as a group of “researchers, occultists, psychics, and healers” that examines paranormal activity, including “poltergeist” phenomena, “shadowy figures,” and attacks. physicists from invisible assailants.

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Other government witnesses included Judy Regnier, former office manager of Mr. Avenatti’s law firm, who testified that the firm had been short of money; Elizabeth Beier, publisher of St. Martin’s, who said that, to her knowledge, Mr. Avenatti had never threatened the publisher with legal action; and Luke Janklow, President and CEO of Janklow & Nesbit.

Janklow compared Avenatti’s stature in 2018 to that of a “popular hero” fighting on behalf of those who did not vote for Trump, saying he had accepted as legitimate the fake letter purporting to be from Daniels. in part “because it came from his lawyer.”

Several times during the trial, Mr. Avenatti mentioned an “attorney-client fee contract” between himself and Ms. Daniels that said he would provide legal services for $100. The contract also said that if she helped Ms. Daniels “finalize” a book deal, she would be entitled to “a reasonable percentage” of the profits; the figure that was “to be agreed between clients and lawyer”. Mrs. Daniels testified that no such agreement had been reached.

Still, Mr. Avenatti told Judge Furman that he was planning a defense based on the premise that he could not be convicted of stealing from Ms. Daniels because he truly believed that his settlement gave him a fair claim to some of the $800,000. of St. Martin’s. .

Although Mr. Avenatti had contemplated presenting as many as half a dozen witnesses in addition to testifying himself, he rested his case without calling any.

During his closing argument, he raised the idea that he deserved money from Ms. Daniels.

He pointed to the thousands of hours of legal work he said he had done on his behalf and what he described as hundreds of thousands of dollars in costs his firm “advanced” to him, including payments to arrange for his 24-hour security.

Mr. Avenatti also told the jury that he had been “instrumental” in helping to secure the book deal, suggesting that Ms. Daniels’ story had been of interest to St. Martin’s in part because of her legal fight with Mr. Trump, “the most powerful person on the planet.”

“I agreed to be in that fight for Ms. Daniels,” Avenatti said. “But I didn’t agree to do it for free.”

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