An Orange County judge declared a mistrial Tuesday in the embezzlement case of attorney and political figure Michael Avenatti, City New Service has reported. Avenatti was accused of misappropriating settlement money intended for clients to pay off creditors and fund an extravagant personal lifestyle.
The Los Angeles Times reported in 2019 that Avenatti flew in private jets, lived in an opulent oceanfront mansion and “rang up six-figure receipts at Neiman Marcus and other sumptuous retailers.”
Prosecutors said the attorney diverted nearly $10 million in settlement funds from clients between 2015 and 2019. He has been charged in a 36-count indictment with ten counts each of wire fraud and failing to file tax returns, eight counts of willful failure to collect and pay over-withheld taxes, two counts of bank fraud, three counts of a false declaration in bankruptcy and one count each of aggravated identity theft and perjury in a bankruptcy proceeding.
In an unrelated case, Avenatti was sentenced in New York to over two years in prison for attempting to extort $25 million from Nike executives.
The headline-grabbing lawyer made his living as a pugnacious class-action litigator, but rose to national notoriety when he agreed to represent the adult film actress Stormy Daniels in a dispute with former President Donald Trump over a nondisclosure agreement.
He also publicly floated a possible run for the Democratic presidential nomination in 2020.
Avenatti’s legal troubles appear to have been merely one chapter in a saga of financial tumult. His firm, Eagan Avenatti, LLP, which had offices in Newport Beach and other California cities, was abruptly forced into bankruptcy in 2017 when vendors claimed Avenatti failed to pay tens of thousands of dollars in bills.
The mistrial granted on Tuesday concerned the ten counts of wire fraud alleged against Avenatti. The remainder of the counts will be tried at a later date.
U.S. District Judge James V. Selna granted mistrial on a technicality. He ruled that federal prosecutors failed to disclose relevant financial data to the defense team. Selna said he did not find reason to believe prosecutors acted purposefully to withhold evidence. The move was reportedly an oversight.
Avenatti has maintained that the government did not adequately account his expenses in building their embezzlement case against him. He insists he has done nothing improper.
The troubled attorney cheered Selna’s decision. “Today is a great day for the rule of law in the United States of America,” Avenatti told press assembled at the federal courthouse in Santa Ana.
The court has scheduled a tentative new trial date for Oct. 12.