Michael Avenatti pleaded guilty Thursday to five federal felonies, admitting a criminal scheme to defraud clients of their settlement money as well as to trying to obstruct an Internal Revenue Service investigation into his failed coffee shop venture.

Avenatti entered the pleas without an agreement with the U.S. Attorney's Office after failed attempts to strike a deal, leaving 31 remaining charges that prosecutors haven't decided if they'll keep pursuing. 

He said plans to seek the dismissal of his remaining tax and bankruptcy charges for violation of the Speedy Trial Act, but six wire fraud counts remain, and Senior U.S. District James Selna said he's "not inclined to engage in two sentencings." The judge scheduled a "placeholder" sentencing date of Sept. 19, with the understanding that it will be vacated if prosecutors pursue the remaining charges.

Avenatti told Selna he disagrees with prosecutors' assertion that the total amount of money associated with his fraud scheme is $9 million, with another $5 million linked to his tax crime.

"That will be a fight for another day," Avenatti said. "But again, my position is that it will be drastically less than that."

Dressed in a baggy gray jail sweatshirt and tan pants, Avenatti replied, "I'm obviously nervous, your honor. But health wise. I'm fine," when Selna asked how he was feeling. He then answered a series of questions from the judge to establish he was clearheaded, acting of his free will and understood his rights. That includes what he was giving up – his right to remain silent – and what he getting into – an unknown sentence that could be up to the consecutive, statutory maximum of 83 years in prison.

Avenatti also read a statement about his wire fraud crimes to establish the court-required factual basis for his guilty pleas, telling Selna he was licensed in California from June 2000 through 2020 and represented "thousands of clients during that time" including the four clients who are the victims in the four wire fraud counts. "I misappropriated and misused certain of their settlement funds to effectuate a plan and I effectuated wire transfers in pursuit of that plan," Avenatti said before describing each of the wire transfers, which ranged from $1,900 to $200,000.

 "Did you understand that in making those transfers you were carrying out a scheme to defraud each of your clients?" Selna asked.

"Yes," Avenatti answered.

"And did you understand that you were not authorized to make those transfers by your clients?" Selna asked.

"Yes," Avenatti answered.

"Did you make those transfers voluntarily?" Selna asked.

"Yes," Avenatti answered.

Avenatti also described his tax crime, saying he'd previously served as CEO of Global Baristas LLC – it owned the Tully Coffee's chain – and obstructed the IRS's tax collection efforts by instructing employees "to undertake various efforts."

Assistant U.S. Attorney Ranee Katzenstein said she wasn't "entirely" satisfied with Avenatti's stated factual basis because he needed to admit he "acted corruptly," so Avenatti on the spot admitted he'd done so. Selna asked him a couple more questions, and Avenatti admitted he should have told the clients about the wire transfers. Katzenstein then said there "are sufficient facts" to support the pleas but "obviously we will be supplementing the record extensively prior to sentencing."

That sets the stage for what Assistant U.S. Attorney Brett Sagel said "might be a somewhat substantial sentencing hearing," with he and Katzenstein apparently planning to detail Avenatti's crimes in much greater detail. 

After court, Sagel told reporters Avenatti admitted what prosecutors and the IRS "have been saying for several years now: That he committed unlawful and audacious acts to steal money from his clients to line his own pockets."

"In addition to defrauding his legal clients, he also didn't pay his taxes," Sagel said. "Today is step 1 before the government decides what to do on the remaining counts. But he will now be sentenced on his conducts of violating his duties to his clients and his duties as a taxpayer to the IRS."