Federal prosecutors in Manhattan unveiled Wednesday new charges against Michael Avenatti. Among the allegations in the new indictment are diverting and stealing money owed to his client, identified in news stories as Stormy Daniels, for a book deal Avenatti helped secure.
Avenatti was indicted by a grand jury on one count of wire fraud for allegedly accepting payments owed to Daniels as part of her book contract by claiming to her agent that Daniels had given Avenatti the authority to accept the payments to his account. Avenatti then allegedly spent that money himself and told Daniels that the payments from her book agent had not gone through, according to the indictment.
He was also indicted on one count of aggravated identity theft for using Daniels’ name and signature on wire instructions.
In a Wednesday afternoon tweet, Avenatti denied that he mishandled any payments to Daniels.
“No monies relating to Ms. Daniels were ever misappropriated or mishandled. She received millions of dollars worth of legal services and we spent huge sums in expenses,” he wrote. “I was entitled to any monies retained per my agreement with the client. My agreement for representation and compensation included a percentage of any book proceeds.”
According to the indictment, as part of Daniels’ book deal, she was to receive four payments with a cut removed for her agent. Avenatti, then still Daniels’ lawyer, helped her negotiate the contract but allegedly promised that he would not bill her any regular retainer fees for work associated with the memoir, per the indictment.
Daniels opened a new bank account to accept payments associated with the book. However, without her knowledge, Avenatti allegedly went to her agent (identified only as Agent-1 in the indictment) and asked the second payment of $175,000 (actually 148,750 minus the agent’s retainer) to be directed into a bank account called “Avenatti & Associates — Attorney Client Trust” instead, per the indictment. Daniels was allegedly unaware of the account’s existence.
The agent responded that he needed permission from Daniels before he could redirect the money, allegedly prompting Avenatti to forge documents with Daniels’ fake signature, according to the indictment. The agent transferred the money.
Avenatti then allegedly spent Daniels’ money on everything from payroll to airfare to online food delivery. Less than three weeks after the money was transferred, Avenatti had spent all but $625 of it, per the indictment.
By that point, Daniels was aware of the money she was missing and asked Avenatti to investigate, per the indictment. Instead, he allegedly pulled $148,750 from another account and transferred it to Daniels.
He reached out to the agent requesting that Daniels’ third payment be made early. The agent agreed, and transferred another $148,750 into Avenatti’s hands, per the indictment. He allegedly used that money for his own expenses, including the lease on his Ferrari and insurance for his law firm.
Daniels then repeatedly asked Aventti about her third payment, allegedly prompting Avenatti to claim that the publisher was withholding the money because her book was not selling well. He later feigned outrage, telling Daniels that he was “threatening litigation,” and that they “need to pay you the money as you did your part and then some,” according to the indictment. Avenatti also allegedly talked Daniels out of sending the publisher a letter and firing her agent.
Daniels eventually asked her manager to reach out to the agent and publisher and ask where her money was. According to the indictment, the agent consequently reached out to Avenatti, who said that he was dealing directly with Daniels and asked the agent not to respond to Daniels’ manager.
It wasn’t until months after her initial request that Daniels learned from the publisher that the payment had already been made, per the indictment. The agent showed her the documents Avenatti allegedly faked to redirect the money into his own account.
Daniels has still never received any part of that third payment.
Avenatti was separately indicted Wednesday on extortion charges related to his alleged attempt to get more than $20 million from Nike in exchange for not publicly smearing the company. He was slammed with four different counts of varying types or extortion within the indictment, together carrying a maximum prison time of 47 years.
Back in March, Avenatti threatened to hold a press conference just before Nike’s quarterly earnings call and the NCAA tournament to uncover alleged misdeeds by the company’s employees unless the athletics giant paid him and a co-conspirator in the range of $15 to $25 million to conduct their internal investigation. He said he would also accept a $22.5 million confidential settlement.
Avenatti was extremely confident in the threat he posed then, frequently repeating as his mantra: “I’m not fucking around with this.”
On the eve of his arrest, he tweeted: “Tmrw at 11 am ET, we will be holding a press conference to disclose a major high school/college basketball scandal perpetrated by Nioke that we have uncovered. This criminal conduct reaches the highest levels of Nike and involves some of the biggest names in college basketball.”
He was arrested less than an hour later.
Read the new indictment below:
