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Michael Avenatti to plead guilty to stealing $5 million from clients

In a court filing, Avenatti said he intends to “change his plea and plead guilty to multiple counts in the indictment and request sentencing on those counts.” He said he has been unable to reach a plea deal with prosecutors despite recent efforts to do so.

Avenatti’s change of plea comes one month before he was set to go on trial in California on embezzlement and fraud charges and two weeks after he was sentenced to four years in prison for stealing nearly $300,000 from his then-client Stormy Daniels.

“Mr. Avenatti wishes to plea in order to be accountable; accept responsibility; avoid his former clients being further burdened; save the court and the government significant resources; and save his family from further embarrassment,” the court filing said.

In 2019, Avenatti was indicted on multiple charges of defrauding his clients. According to the indictment, beginning in 2015, Avenatti executed a scheme to defraud five clients, one of whom was a paraplegic from whom Avenatti allegedly withheld a settlement payment of $4 million.

After Avenatti negotiated settlements for the clients that required payment to go to them, he would lie to the clients about the terms of the settlements, instead depositing the funds into attorney trust accounts he controlled, the indictment says. He would then embezzle and misappropriate those funds, according to the indictment, and to prevent discovery of his scheme, he would tell clients the settlement proceeds hadn’t yet been paid, among other tactics.

Avenatti is currently serving a five-year prison sentence for the Daniels’ theft and for attempting to extort millions of dollars from Nike by threatening to go public with negative information unless he was paid.

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