Michael Avenatti Indicted on 36 Federal Charges Including Tax Fraud and Theft

Last month, Michael Avenatti was arrested on several charges that included bank and mail fraud as well as allegedly trying to extort Nike for over $20 million, and now the celebrity attorney has just been hit with a new 36 count indictment for separate criminal complaints. 

The charges came down earlier this morning by a federal grand jury in California, which accuse him of stealing millions of dollars from his clients, one of whom is a mentally ill paraplegic. Additionally, he's also been accused of shorting the IRS of millions as well, through a method that's been described as “a tangled financial web of lies” that was “used to fund a lavish lifestyle which had no limits.”

The IRS reportedly began investigating Avenatti more than a year ago, though it's also been noted that that attorney “began to run afoul of the IRS almost a decade ago” by failing to file income tax returns. 

Meanwhile, within the 61-page indictment it's alleged that for years Avenatti hid and then completely spent $4.1 million that was reached in a 2015 settlement for the mentally ill paraplegic patient, while also using $2.75 million from another client's settlement to help pay for his share of a private jet valued up to $5 million.

As the private jet was seized by federal authorities on Wednesday (April 10), it's been alleged that most of the money for the paraplegic client was funneled to a company that managed Avenatti’s race-car team, as well as to his coffee company, Global Baristas. 

The indictment also indicates that because Avenatti failed to respond to the U.S. Social Security Administration’s request for information about the paraplegic, the client then had his Supplemental Security Income benefits discontinued in February.

In all, Avenatti has been charged with 10 counts of wire fraud, 19 tax-related offenses, two counts of bank fraud, and four counts of bankruptcy fraud, while he remains free on the $300,000 bond he posted last month. As for the latest indictment, he is scheduled to be arraigned on April 29 in federal court in Santa Ana.

Source: CNBC