Michael Avenatti, the high-octane trial attorney who represented adult film star Stormy Daniels in his infamous ‘hush money’ lawsuit against then-President Donald Trump, was in debt and ‘desperate’ to money when he stole part of the actress’ book advance, federal prosecutors said during her fraud trial on Monday.
In opening statements, Manhattan prosecutors said the publisher of Daniels’ memoir agreed to pay him $800,000, but Avenatti siphoned off $300,000 by forging his signature on a letter home from editing.
Avenatti was “desperate for the money” and his Newport Beach law firm was in debt when he took covert steps to recover the money, Assistant U.S. Attorney Andrew Rohrbach told jurors.
But Avenatti’s lawyers, in their own opening, claimed Daniels was the one who owed him. They said Avenatti helped her secure a book deal, which was her longtime dream. They also attempted to attack Daniels’ credibility by performing on her new project as a paranormal investigator who could communicate with haunted dolls and claimed she was an ‘unpredictable’ and ‘uncontrollable’ customer who failed to respect deadlines for his book.
Rohrbach said the 50-year-old lawyer – who rose to fame for her ubiquitous cable TV appearances and fights with Trump – used the fake letter to get Daniels’ publisher to send a payout of her money to a trust account controlled by Avenatti.
The prosecutor said Avenatti promised “he wasn’t going to take a dime” from Daniels’ book deal, but instead spent it on air travel, food and personal expenses, while telling Daniels that his publisher was blocking his payments.
Avenatti was in such dire financial straits, Rohrbach continued, that he borrowed money from friends and used that loan to pay Daniels what he was owed, saying the publisher eventually paid.
The jury will see Avenatti’s “lies in her own words,” Rohrbach said, adding that Daniels will take the stand and present dozens of text messages between her and the celebrity lawyer where he laid blame on the publisher. “The posts tell the whole story,” he said. Jurors can also expect to see bank and wire transfer statements, as well as the allegedly forged letter he sent on Daniels’ behalf.
Next, Rohrbach previewed part of Avenatti’s defense: that he will attack Daniels’ credibility because she is a porn actress and director turned TV paranormal investigator.
Daniels takes on many roles as an artist, Rohrbach said. “She’s been in adult movies, she’s on a show about paranormal activity, but adult actresses and paranormal investigators can be victims of fraud,” he explained.
This is Avenatti’s third criminal trial since federal prosecutors on both coasts charged him with a series of offenses including bank fraud, wire fraud and extortion in 2019, about a year after that his portrayal of Daniels catapulted him to stardom as the archenemy of the then President. Trump and almost drove him to run for president.
Avenatti has also made an enemy of loyal Trump fixer and personal attorney Michael Cohen, who was convicted of breaking campaign finance law after paying several women, including Daniels, to keep quiet about their banter with Trump.
On Monday, Cohen showed up in court to taunt Avenatti and made a show of his appearance on Twitter.
Behind the scenes of his incessant TV appearances and viral Twitter account, creditors were battling Avenatti over a series of debts, his ex-wife was battling him over child support, and his former clients were demanding answers about the amounts owed to them.
In New York, Avenatti was sentenced to 2.5 years behind bars last July for trying to extort footwear giant Nike for more than $20 million while representing a young basketball coach . The disgraced lawyer wept during his sentencing hearing, telling the court: “I learned that all the fame and notoriety in the world is meaningless. TV and Twitter mean nothing.
A month later, Avenatti faced a California jury for allegedly embezzling millions of settlement money from his clients, but a judge declared a mistrial after finding prosecutors failed to provide evidence. evidence, including data from his former law firm’s accounting software.
Avenatti returned to Manhattan federal court this week for stealing part of Daniels’ memoir advance Full disclosure. He faces one count of wire fraud, which could see him up to 20 years behind bars, and one count of aggravated identity theft, which carries a possible two years in prison.
Avenatti’s defense attorney, Andrew Dalack, argued the beleaguered attorney did not rob Daniels, whose birth name is Stephanie Clifford. Rather, it was Daniels who owed Avenatti his zealous representation, Dalack said.
Dalack told jurors that, pursuant to his fee agreement with Daniels, Avenatti owed a “reasonable percentage” of the proceeds of his book; but instead of keeping his end of the bargain, Daniels decided to lie and “hire federal prosecutors to prosecute Avenatti”.
“Michael Avenatti turned a rather obscure adult entertainer into a household name,” Dalack said, adding that Avenatti did so through “enormous sacrifice” and “unparalleled commitment” to her.
“When Mrs. Daniels doesn’t get what she wants… she turns against the people closest to her. She is making false accusations against people she has known for years,” Dalack told the jury.
Daniels needed $300,000 from Avenatti, Dalack said, because she owed that much in attorney fees after losing a defamation lawsuit against Trump. Dalack claimed that Daniels asked Avenatti to help her hide funds from her ex-husband, so she closed her bank account, causing Avenatti to tell her publisher to send payments to an account in client trust that he controlled.
Dalack then took aim at Daniels’ latest ghost hunting project scary girls. “She started claiming she could talk to the dead” and “interact with a haunted doll named Susan who walks, talks and plays the piano.”
Talking to dolls isn’t always unusual, says Dalack, and kids do it all the time.
“But when the dolls respond to you, that’s a problem,” joked Dalack.
Daniels was Avenatti’s star client in early 2018, when she sued Trump to invalidate a nondisclosure agreement she signed with his camp ahead of the 2016 presidential election. Daniels, who claims to have had sex with a married Trump at a golf tournament in Lake Tahoe in 2006, was awarded $130,000 to keep quiet about an alleged affair. Cohen helped arrange the “silence money” deal, and she later sued him for defamation.
Prosecutors say Avenatti used money from Daniels’ book to fund his lavish lifestyle – including a monthly payment for a car on a Ferrari – and pay employees of his law firm and the company of moribund Global Baristas coffee. According to the indictment, “when [Daniels] inquired about the condition of [her] advance fee, Avenatti lied several times [her], including stating that he was trying to obtain fees from [her] editor, when in truth and in fact, Avenatti had already collected the fees and had spent them on his personal and professional expenses.
A rift between Avenatti and Daniels was forming months before the high-flying trial attorney was charged.
In November 2018, Daniels told The Daily Beast that Avenatti launched a fundraising website for his legal battle with Trump without telling him and sued the president for defamation against his wishes. “For months I have asked Michael Avenatti to give me accounting information about the fund that my supporters have so generously donated for my security and legal defense,” Daniels said in a statement. “He repeatedly ignored those requests.”
Avenatti responded to his claims with a personal statement: “I am and always have been Stormy’s greatest champion. I personally sacrificed a lot of money, time and energy to help her because I believe in her. I’ve always been an open book with Stormy about all aspects of her cases and she knows it.