Judge revokes bail for disgraced lawyer Michael Avenatti

Judge revokes bail for disgraced lawyer Michael Avenatti

A federal judge in California on Wednesday revoked the bail of disgraced attorney Michael Avenatti, a day after he was dramatically arrested for allegedly committing new financial crimes while free and awaiting trial on charges against him in three federal criminal cases.

Avenatti was ordered to be detained in jail without bond pending his upcoming trials after a nearly hour-long hearing in U.S. District Court in Santa Ana, California, before Judge James Selna.

Selna ordered Avenatti to be transported “forthwith,” by no later than Friday, to New York, where he had been scheduled to begin trial next Tuesday on charges of trying to extort more than $20 million from athletic apparel giant Nike

That trial now will be delayed, the New York judge said later Wednesday after hearing from Avenatti’s lawyers they they now might lack funds, or access to funds, to pay for an expert witness and expenses related for other witnesses.

But “I want the trial to begin at least by Jan. 27,” the judge told prosecutors and Avenatti’s lawyers during a conference call.

The U.S. Attorney’s Office in Los Angeles, in a filing in Santa Ana court unsealed Wednesday, said it wanted Avenatti’s bail revoked because there is reason to believe he had violated terms of his release by engaging in “mail fraud,” “wire fraud,” and “structuring financial transactions to evade [currency] reporting requirements,” as well as “money laundering” since he was charged in all three pending federal cases last spring.

Avenatti, an ardentl foe of President Donald Trump, engaged in those alleged crimes to hide money from creditors, who he owes more than $10 million, prosecutors said.

“The fact that [Avenatti] continued to engage in criminal conduct after he had been indicted in this case and while on bond demonstrates that defendant remains a substantial economic danger to the community,” the U.S. attorney’s office wrote.

Avenatti, 49, was arrested Tuesday evening without warning for the alleged bail violation by IRS criminal investigation agents in Los Angeles in the middle of a state bar court hearing.

State bar officials want his law license involuntarily suspended because of claims he ripped off a client for more than $800,000.

On Wednesday, a federal judge in New York City rejected Avenatti’s request to dismiss charges in the Nike extortion case.

But Avenatti’s trial in that case, might be postponed a week or longer because his arrest in California has thrown plans for the Nike trial “into chaos,” the New York judge said.

Avenatti is separately charged in the same Manhattan courthouse with scamming his former client, porn star Stormy Daniels, out of $300,000 in proceeds from a book deal. A trial in that case is set to begin April 21.

Avenatti has pleaded not guilty in all three federal cases.

He has claimed he is the victim of politically motivated prosecutions as a result of “animus” toward him by Trump.

But Daniels in a tweet Wednesday lashed out at a Twitter user who suggested that Avenatti was “unjustifiably arrested” by Trump’s “hired gunman because he helped reveal the @StormyDaniels story.”

“Did they make him forge name, steal my money and lie to me? F— him!” Daniels tweeted.

Court documents filed by prosecutors in California this week allege that Avenatti last May fraudulently transferred most of a $1 million payment to his law firm to hide that payment from creditors who include a former law partner, a client, his second wife and Washington state tax officials.

Prosecutors also said he has “engaged in a number of other fraudulent transactions” to defraud his creditors “and conceal his assets.”

Those transactions included using a portion of the payment to his firm to have his ex-wife buy a $50,000 Mercedes-Benz car in her name that Avenatti and his personal driver “repeatedly used to transport” Avenatti.

Prosecutors in court papers detailed how Avenatti, since his arrest last spring for the federal cases, has repeatedly withdrawn cash and cashed checks in amounts of thousands of dollars, but less than the $10,000 threshold that requires banks to report financial transactions to federal regulators.

In the pending criminal case in California that was the subject of the bail revocation, Avenatti last year was charged in a 36-count indictment accusing him of tax crimes, wire fraud and perjury, with Los Angeles federal prosecutors accusing him of swindling clients out of millions of dollars.

Prosecutors claimed at the time that Avenatti hid and then spent a $4 million legal settlement obtained in January 2015 in favor of a mentally ill paraplegic client, and hid a $2.75 million settlement for another client that Avenatti allegedly used to help pay for his share of the purchase of a private jet valued at up to $5 million.

Avenatti’s trial in California is scheduled to begin in May.

Avenatti’s bail terms for all his pending cases, which included a $300,000 personal recognizance bond, required him to limit his travel to certain parts of California, New York and Florida unless he received permission from pretrial services officials. He also was prohibited from committing crimes as a condition of his release.

On Wednesday, Manhattan federal court Judge Paul Gardephe denied Avenatti’s motion to toss the Nike extortion case, seeming to pave the way for Avenatti’s trial beginning next Tuesday, the same day that Trump’s impeachment trial is expected to begin the Senate.

But Gardephe said later Wednesday that the plan for the trial has been “thrown into chaos” by Avenatti’s arrest in California.

Avenatti’s lawyers told the judge during an emergency conference call that is not clear how the defense team can pay for its witnesses to travel for the trial, or pay for other trial-related expenses.

Gardephe told prosecutors in New York and Avenatti’s lawyers that he would wait for the bail hearing in California to rule on whether his trial in the Nike case should be delayed by a week or more.

Avenatti is accused in the Nike case of trying to shake down the athletic apparel giant by threatening to expose alleged evidence of bribing amateur basketball players and their families unless the company paid up.

Gardephe, in his ruling Wednesday, noted that Avenatti has moved to dismiss all three counts of the indictment on the grounds that “that he was targeted for prosecution in this case for unconstitutionally vindictive and selective reasons.”

Gardephe, in rejecting that motion, said that prosecutors have “broad discretion” to enforce criminal laws.

The judge also wrote that “although Avenatti has proffered ample evidence of the animosity President Trump feels towards him, Avenatti has not offered any evidence suggesting that that animosity played any role in the U.S. Attorney’s decision to prosecute him.”

The judge added: “Avenatti is being prosecuted for activities wholly unrelated to the political arena.”

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