Michael Avenatti is being accused of secretly keeping money from one of his clients after getting the client a settlement, spending the money on himself, then telling the client that the funds from the settlement had not been received yet. The client, Gregory Barela, said Avenatti “was operating his law firm in a Ponzi scheme like manner.”
According to The Daily Beast, Barela filed a statement of claims with Judicial Arbitration and Mediation Services (JAMS), a private arbitration organization, arguing that after Avenatti pocketed the money from the settlement, he turned around and offered to lend some of the funds back to Barela with 10% interest.
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