SANTA ANA, California – Suspended plaintiffs’ lawyer Michael John Avenatti was sentenced today to 168 months in federal prison for stealing millions of dollars from his clients and for obstructing the IRS’s efforts to collect more than $3 million in payroll taxes from an Avenatti-owned coffee business.
Avenatti, 51, a former Newport Beach resident now in federal custody, was sentenced by United States District Judge James V. Selna, who said Avenatti ‘has done great evil for which he must answer.’
In imposing the 14-year sentence, Judge Selna ordered that this term of imprisonment run consecutive to sentences totaling five years previously imposed in two federal cases in the Southern District of New York.
Avenatti also faces paying $10,810,709 in restitution to four clients and to the IRS.
The sentencing follows Avenatti’s entry of guilty pleas on June 16 to four counts of wire fraud and one count of endeavoring to obstruct the administration of the Internal Revenue Code. He has been a federal prisoner since on February 7, soon after he was ordered to begin serving a sentence in one of the New York cases.
Prosecutors say Avenatti received money on behalf of clients into client trust accounts, misappropriated the money, and then lied to the clients about receiving the money or, in one case, claimed that the money had already been sent to the client.
According to a sentencing memorandum filed by prosecutors, Avenatti would lie about the true terms of the settlement agreement he had negotiated for the client, conceal the settlement payments that the counterparty had made, secretly take and spend the settlement proceeds that belonged to the client, and lull the client into not complaining or investigating further by providing small ‘advances’ on the supposedly yet-to-be paid funds.
Geoffrey Johnson, one of Avenatti’s clients, was a paraplegic with mental health issues. Avenatti represented Johnson in a lawsuit against the County of Los Angeles that alleged Johnson became a paraplegic as a result of the county violating his constitutional rights. The county paid a $4 million settlement in January 2015, but within months Avenatti had drained the entire settlement payment from his law firm’s trust account and used portions of the settlement to finance his coffee business and pay personal expenses.
United States Attorney Martin Estrada stated, ‘Michael Avenatti was a corrupt lawyer who claimed he was fighting for the little guy. In fact, he only cared about his own selfish interests.’
Avenatti’s victims suffered actual losses totaling approximately $7.6 million.
Avenatti’s 14-year sentence is to run consecutive to sentences totaling five years previously imposed in two federal cases in the Southern District of New York.
Avenatti is also ordered to pay $10,810,709 in restitution to four clients and to the IRS.
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Key Facts
- State: California
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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