Avenatti's Extortion Trial Delayed Following Arrest in California
Avenatti's defense lawyers said Wednesday that the problems created by their client's arrest extended "far beyond" the trial's start date, and hinted he may have to file papers with the court as an indigent person.
January 15, 2020 at 07:00 PM
5 minute read
A Manhattan federal judge on Wednesday postponed the start of Michael Avenatti's extortion trial next week, after a judge in California ordered that he be held without bond amid new allegations of fraud and money laundering.
According to court papers, the U.S. Marshals Service was expected to transport Avenatti to New York later this week. However, his arrest and jailing in Los Angeles injected his extortion case with a fresh sense of confusion on the eve of a planned Jan. 21 trial, and kicked off a flurry of filings throughout the day as prosecutors scrambled to assess the impact.
U.S. District Judge Paul G. Gardephe of the Southern District of New York said earlier in the day that the developments had thrown the case into a state of "chaos" and threatened Avenatti's ability to communicate with counsel on a number of outstanding issues.
"It's clear that the trial date for Tuesday needs to be adjourned," he said on a conference call late Wednesday afternoon.
Gardephe said he wanted the trial to begin no later than Jan. 27, and ordered attorneys to meet again Friday morning in Manhattan.
Avenatti maintains that he is innocent and has pleaded not guilty in both cases.
Prosecutors from the U.S. Attorney's Office for the Central District of California detailed a series of financial crimes they said he committed while awaiting a May trial on accusations that he embezzled hundreds of thousands of dollars from his clients.
In court documents unsealed Wednesday, prosecutors there alleged that he had defrauded his creditors and took elaborate steps to hide $1 million he had received following his arrest last year by moving funds through various bank accounts and using cashier's checks to spend it. In total, Avenatti owed more than $10 million at the time, a tally that included several outstanding court judgments, prosecutors said.
He was arrested Tuesday night while attending a disciplinary proceeding at a Los Angeles courthouse.
"Since at least May 2019, defendant has brazenly attempted to defraud and conceal his assets from these creditors," prosecutors wrote in the filings.
Assistant U.S. Attorney Matthew Podolsky said Wednesday that the Manhattan U.S. Attorney's Office was not told about the arrest warrant ahead of time, but prosecutors were working with the Marshals Service to move Avenatti to New York as quickly as possible.
"This office had no role in investigating these allegations," Podolsky said Wednesday morning. "We frankly weren't aware … until after an arrest was made."
Avenatti's defense lawyers said Wednesday that the problems created by their client's arrest extended "far beyond" the trial's start date. It was not clear based on the allegations in California, defense attorney Jose Quinon said, whether Avenatti had any money to pay their expert and to fund technical assistance and witness travel.
Quinon said he needed time to discuss resources with Avenatti, but raised the possibility of indigency proceedings in New York, if no funds were available.
"The rug has been pulled from under us because this was absolutely, totally unexpected," Quinon said.
"On the eve of trial, we're just left naked out in the street," he said.
Avenatti is accused in New York of extortion, conspiracy and honest services wire fraud related to his representation of Gary Franklin, a California-based youth basketball coach who claimed to have damaging information about alleged payments Nike made to the families of college basketball recruits.
Nike has not been charged with any crimes and denies any wrongdoing.
According to prosecutors, Avenatti told Nike he would keep the alleged recruiting violations quiet, so long as the company agreed to settle his client's claims and pay Avenatti between $15 million and $25 million to head an internal investigation. Crucially, prosecutors said that Avenatti never told Franklin about Nike's offers to resolve the dispute without paying Avenatti or retaining him for an internal probe.
Avenatti rose to national prominence for his representation of Stormy Daniels, an adult film star who said she had an extramarital affair with President Donald Trump. Trump has denied those allegations.
An outspoken critic of Trump, he briefly flirted with a presidential run before becoming mired in a series of high-profile prosecutions.
In addition to the two cases in California and New York, Avenatti is also accused in Manhattan of skimming money on a book deal that was being paid to Daniels. Trial in that case is scheduled to begin in April.
Gardephe on multiple occasions Wednesday expressed frustration with the decision to arrest Avenatti so close to trial, and implored attorneys on both sides to work out their issues ahead of Friday's scheduled conference.
"It remains entirely unclear to me why it was decided to arrest Mr. Avenatti a week before the trial, based primarily on allegations that go back to last summer," the judge said during the afternoon call.
"That's created enormous disruption, so unless the parties cooperate constructively, I have no idea when this case gets tried," he said.
Gardephe is still expected to rule on a number of substantive pretrial motions, but he said those decisions must wait until Avenatti is moved to New York and has a chance to meet with counsel.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrump Picks Personal Criminal Defense Lawyers for Solicitor General, Deputy Attorney General
SEC Under Trump 2.0 Likely to Take More 'Measured' Enforcement Approach, Observers Say
Decision of the Day: Attorney in Social Security Case Awarded Fees, But Must Pay Client Refund Under Equal Access to Justice Act
Trending Stories
- 1Decision of the Day: School District's Probe Was a 'Sham'; Title IX Administrator Showed Sex-Based Bias
- 2US Magistrate Judge Embry Kidd Confirmed to 11th Circuit
- 3Shaq Signs $11 Million Settlement to Resolve Astrals Investor Claims
- 4McCormick Consolidates Two Tesla Chancery Cases
- 5Amazon, SpaceX Press Constitutional Challenges to NLRB at 5th Circuit
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250