Two weeks ago, Michael Avenatti — the celebrity lawyer of porn star Stormy Daniels who once appeared on mainstream news outlets over 140 times in just 10 weeks and teased a potential Democratic presidential run for months — was slapped with a 36-count indictment for a wide range of charges, including fraud, perjury, and embezzlement. This week, some more details about the charges have come to light, and they include some jaw-dropping claims, including that Avenatti allegedly embezzled millions of settlement money that was supposed to go to the ex-wife of an NBA star. Previous reports have also revealed that Avenatti is accused of stealing millions that were supposed to go to a mentally ill paraplegic client.
On Sunday, the Los Angeles Times published a report detailing new information about some of the allegations Avenatti faces, particularly that he embezzled nearly $2 million of the $2.75 million paid by the Miami Heat's Hassan Whiteside as part of a settlement with his ex-wife, Alexis Gardner.
Prosecutors claim that Whiteside wired the full $2.75 million to Avenatti in January 2017 with the agreement that he would pay another $250,000 in November 2020. According to the agreement, Avenatti was supposed to get about $1 million of the $3 million settlement, the rest going to Gardner. Instead, Avenatti allegedly took the entire $2.75 million up front and misled Gardner about what had been paid and when the rest was supposed to be transferred. The indictment alleges that Avenatti never even gave Gardner a copy of the settlement agreement.
The initial payment, the celebrity lawyer claimed, was only enough to cover his roughly $1 million in legal fees. Whiteside would be paying the rest of the $2 million in monthly installments over a period of 8 years, Avenatti allegedly told Gardner.
Prosecutors say that after paying Gardner a few of those supposed monthly installments, Avenatti stopped after less than a year (totaling less than $200,000), claiming Whiteside was skipping his payments.
As for where all the NBA star's money went: prosecutors say Avenatti used most of the $2.75 million to purchase half-ownership in a private jet (a private jet partly owned by Avenatti was seized by the feds after he was charged).
"We entered into a mutually agreed upon settlement more than two years ago following the end of our relationship; a settlement that reflected Alexis’ investment of time and support over a number of years as Hassan pursued a career in the NBA," the former couple told the Times in a joint statement. "It is unfortunate that something that was meant to be kept private between us is now being publicly reported. We have both moved on amicably and wish nothing but the best for each other."
As egregious as this claim is, perhaps the most stunning is the allegation that Avenatti did something similar to a mentally ill paraplegic man, Geoffrey Ernest Johnson. The indictment alleges that Avenatti lied to Johnson several times, telling him that Los Angeles County had not paid a $4 million settlement up front, while using portions of the settlement to pay his personal and business expenses.
As with the scam he allegedly conducted with Gardner, Avenatti paid Johnson periodic installments; he also reportedly paid for his assisted living facility. The attorney representing Johnson condemned Avenatti's actions as an "appalling fraud."
"Mr. Avenatti stole millions of dollars that were meant to compensate Mr. Johnson for a devastating injury, spent it on his own lavish lifestyle, then lied about it to Mr. Johnson for years to cover his tracks," Robbins said in a statement reported by NBC News. "His actions have left Mr. Johnson destitute."
Avenatti has denied all the allegations and declared that he will be fully vindicated.