Monday has not been not a good day for attorney Michael Avenatti. The big news is that he’s been charged in New York in an extortion case, but federal prosecutors are also going after him for alleged embezzlement and bank fraud in California.
This is all over a $1.6 million settlement, according to The Department of Justice. Avenatti negotiated the deal, prosecutors said. This money was supposed to be paid out January 10, 2018, but wasn’t. The DOJ said that Avenatti lied and said the deadline was the following March 10. The lawyer is accused of using the settlement money to pay expenses for his coffee business Global Baristas US LLC and his personal expenses. When the false deadline passed, Avenatti hid that settlement money was received, authorities said.
Avenatti is also charged with defrauding a Mississippi bank by using falsified tax returns to get three loans of a total of $4.1 million. The long and short of it is that the lawyer allegedly claimed he filed tax records for three different years (he allegedly didn’t), and claimed he already paid millions in taxes (he allegedly still owed over $850,000).
From the DOJ:
The phony returns stated that he earned $4,562,881 in adjusted gross income in 2011, $5,423,099 in 2012, and $4,082,803 in 2013, according to the affidavit. Avenatti allegedly also claimed he paid $1.6 million in estimated tax payments to the IRS in 2012 and paid $1.25 million in 2013. In reality, Avenatti never filed personal income tax returns for 2011, 2012 and 2013 and did not make any estimated tax payments in 2012 and 2013. Instead of the millions of dollars he claimed to have paid in taxes, Avenatti still owed the IRS $850,438 in unpaid personal income tax plus interest and penalties for the tax years 2009 and 2010, court papers state.
Avenatti is charged with wire fraud and bank fraud by the the U.S. Attorney’s Office for the Central District of California. A request for comment to his email was not returned as of press time.
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