Michael Avenatti ALLEGEDLY Stole Millions From Paraplegic Man So He Could Invest In His Race Cars VROOM!

Michael Avenatti has been a VERY BAD BOY. Allegedly. We should state at the outset that in a court of law all accused parties are innocent until proven guilty beyond a shadow of a doubt, yadda yadda yadda.

But if Avenatti is found guilty of the charges in the 36-count indictment that just came out of the District Court for the Central District of California, then wow, how the brieflysorta kinda mighty have fallen! If what the document lays out is true, then Avenatti's entire house of cards just came tumbling down, because you see, all these charges sort of seem related to each other. As in, he was stealing millions of dollars from clients and then using those very same funds to commit other crimes, and everybody in the process got screwed, including the paraplegic client he allegedly stole a $4 million settlement from.


Included among the counts are wire fraud, tax fraud, bank fraud, and bankruptcy fraud. But that doesn't even begin to tell the story this indictment tells.

For an example of what Avenatti is accused of, let's look at "Client 1," whom the Los Angeles Timesidentifies as Geoffrey Ernest Johnson, a mentally ill paraplegic man. Johnson won a $4 million settlement from Los Angeles County over treatment at one of its facilities, which was paid out to Avenatti in January of 2015. Instead of passing that money to Johnson and settling up lawyer fees, Avenatti instead allegedly lied to Johnson for years, saying the payment hadn't come. Meanwhile, Avenatti put that money in his race car company bank account and his coffee company bank account, and pissed it away within five months. Oh, Johnson saw some money -- totaling around $124,000 -- in the form of payments the indictment says were meant to "lull" the client into complacency and convince him the money was still coming. Avenatti even paid Johnson's rent at the assisted living a few times! What a mensch, right? Avenatti allegedly called those payments "advances," because remember, the $4 million hadn't arrived yet! Except for how it had!

Avenatti did this to multiple clients, allegedly.

The indictment states that Avenatti told Johnson that Los Angeles County couldn't pay up a lump sum of cash, and that it had to be set up in a specific Special Needs Trust. All of this was bullshit. Meanwhile, Avenatti was embezzling Johnson's money and stuffing it in different places, so he could use it for other shady crime-y stuff.

In 2017, Johnson reportedly wanted to buy a house. Cool, Mr. Johnson, you can use your settlement money that "hasn't arrived" to do that! We will make it work! Except once the house was in escrow, Avenatti allegedly told Johnson that he's very sorry, but the special needs trust -- the one he had been lying and saying must be established for Johnson to receive the payment -- wasn't established, so WOMP WOMP, the house purchase fell through.

In late 2018, Johnson needed Avenatti to help verify some things with the Social Security Administration, so that Johnson could keep getting his disability payments. But Avenatti didn't do it -- because that could have exposed all his crimes! allegedly! -- so Johnson lost his benefits in February of this year. The indictment states that thereafter, Avenatti pulled a bunch of "oh shit!" moves with Johnson to reassure him that the money was finally coming through, but, you know, Avenatti allegedly spent it four years ago, so whatcha gonna fuckin' do!

This is just one example. There's also a Client 2, a Client 3, a Client 4, and a Client 5.

In Client 2's case, $2.5 million out of a $2.75 million settlement negotiated in early 2017 -- the terms of which were misrepresented to Client 2 -- mysteriously made its way from account to account until it bought an ownership stake in a private jet for one of Avenatti's companies. (That jet, a Honda HA-420, was seized by the feds Wednesday in Santa Barbara.) Don't worry, Avenatti allegedly stole the remaining $250K from that settlement too.

In that case, Avenatti "lulled" the client by making monthly payments to them, which were allegedly how the terms of the settlement were supposed to go anyway, at least based on the lies Avenatti told his client about how the settlement was supposed to go. After a while, he stopped paying though and then told the client it was the fault of the person who owed the $2.75 million settlement, as opposed to the lawyer in the middle stealing the settlement riches.

And on and on and on, to the tune of millions of dollars.

Oh but wait, there's more! That's just the "stealing from clients" part! Sometimes Avenatti was allegedly keeping the clients' money for himself, and sometimes he was funneling it into Global Baristas US LLC (GBUS), which operated Tully's, Avenatti's coffee stores company, in order to pay expenses over there. (And other places too!) Oh, and did you know that Avenatti was allegedly stealing money he was withholding from his own coffee store employees as Social Security payments, by failing to actually remit that money to the IRS? Hell, it sounds like he wasn't paying his employees' payroll taxes at all. And all this time, it seems he wasn't filing returns for himself either, because that might expose all the crimes he was committing! Allegedly!

And when the IRS starting figuring out what GBUS was up to -- to the point that it garnished bank accounts -- Avenatti just said let's start having everybody put my COFFEE COMPANY money into the bank accounts for my RACE CAR COMPANY, because that's kosher. This paragraph from the press release on the indictments is quite a wonder:

The indictment alleges that he lied to an IRS revenue officer, opened a new bank account to receive funds related to credit card transactions at Tully's coffee shops, and directed Tully's employees to deposit cash receipts into a bank account belonging to a car racing outfit that Avenatti also owned. Some of the money that should have been used to pay GBUS' tax debt was transferred to bank accounts associated with Avenatti's law firms, and some of that money was used to make lulling payments to Clients 1 and 2.

Just ... wow!

And all of this is on top of what we learned a few weeks ago about Avenatti trying to extort Nike, like right to their faces, charges he's facing on the East Coast, and the bank fraud charges from the nice bank in Biloxi, Mississippi, incorporated in this indictment, where he used completely fake tax returns he never filed to try to secure $4.1 million in loans.

Also there is some bankruptcy fraud stuff. You know, just a li'l bit.

Long story short, these are all the charges:

The indictment specifically charges Avenatti with 10 counts of wire fraud related to the theft of money that should have been paid to clients, eight counts of willful failure to collect and pay over taxes withheld from GBUS employee[s], one count of endeavoring to obstruct the administration of the Internal Revenue Code, four misdemeanor counts of willful failure to file his personal tax returns for the years 2014 through 2017, three misdemeanor counts of willful failure to file Eagan Avenatti's tax returns for the years 2015 through 2017, three misdemeanor counts of willful failure to file tax returns for Avenatti & Associates for the years 2015 through 2017, two counts of bank fraud related to the loans received from The People's Bank, one count of aggravated identity theft for misusing the name of a tax preparer in relation to the bank fraud scheme, three counts of making false declarations in relation to a bankruptcy, and one count of giving false testimony under oath in Bankruptcy Court.

Just ... WOW AGAIN!

The indictment notes that, if convicted, the statutory maximum sentence is 333 years, plus two more years for that wee spot of aggravated identity theft mentioned just above.

Let's check in with the accused on Twitter:

Mr. Johnson? The mentally ill paraplegic guy? OK.

We'll always be grateful to Michael Avenatti for handing us the campaign finance crimes of "Individual-1" and Michael Cohen on a platter, when he represented Stormy Daniels, who has also cut off her relationship with Avenatti, because he's fucking creepy and maybe crime-y. But, um ...

Remember this man was going to run for president? Did he think none of this would come up? IS HE IN FACT DONALD J. TRUMP?


[Indictment / press release]

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Evan Hurst

Evan Hurst is the managing editor of Wonkette, which means he is the boss of you, unless you are Rebecca, who is boss of him. His dog Lula is judging you right now.

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