During a break in a bar association disciplinary hearing Tuesday in California, celebrity attorney Michael Avenatti was arrested by federal agents on suspicion of violating conditions of his bail in a separate, criminal case.
Avenatti, who formerly represented such high-profiles clients as adult-film Stormy Daniels (real name Stephanie Clifford), was in Los Angeles to appear at a State Bar of California hearing regarding allegations that he scammed a client out of $840,000.
During a break in the hearing, he was arrested by Internal Revenue Service agents on suspicion that he had violated his bail in a separate trial in the state of California, according to Fox News.
Just moments ago ex-Stormy Daniels attorney Michael Avenatti was taken out of the California State Bar Court in LA the custody of federal agents. pic.twitter.com/cU8sM4DUw1
— Jason McGahan (@JasonMcGahan) January 15, 2020
“Defendant’s extensive pattern of criminal conduct and the overwhelming evidence supporting those charges demonstrate that defendant is a substantial danger to the community,” federal prosecutors wrote in a court document after his arrest.
Prosecutors argued he shouldn’t be allowed to remain free on bond, The Associated Press reported.
They claimed Avenatti would “almost certainly continue to engage in further fraudulent and obstructive conduct” if allowed to do so.
Court documents claimed there was probable cause that while the lawyer was on pre-trial release, he committed mail and wire fraud, both federal offenses, and money laundering, which is a state offense.
Prosecutors said that in May, Avenatti “arranged for his ex-wife … to purchase a $50,000 Mercedes Benz in her name” that was primarily used by him and his personal driver.
“Additionally, between June 2019 and September 2019, defendant ‘flipped’ cashier’s checks to himself in order to limit the amount of funds available in his U.S. Bank account on at least eight separate occasions,” the documents continued.
“By doing so, defendant was clearly attempting to limit his creditors’ ability to levy his accounts and recover the debts defendant owed to his creditors.”
Avenatti is facing 36 federal criminal charges in California, with prosecutors claiming he defrauded clients, committed bank fraud and refused to pay the IRS what he owed.
The celebrity lawyer was released on $300,000 bond on the condition that he not commit any crimes while awaiting trial, which prosecutors now say he did anyway, The Wall Street Journal reported.
Meanwhile, Avenatti was expected to appear in federal court in Manhattan next week and face trial for allegedly attempting to extort $25 million from Nike.
Judge Paul G. Gardephe of the U.S. District Court for the Southern District of New York initially expressed his concern that Avenatti’s recent arrest would affect the New York trial.
“The arrest of Mr. Avenatti this close to the trial has essentially thrown the trial into chaos,” Gardephe said.
“Mr. Avenatti has been on bail in the California case for a long time, so there are certainly questions in my mind about why it was necessary to raise allegations about bail violations so close to the trial and it certainly has put defense counsel in a very difficult position.”
On Wednesday afternoon, however, Judge James V. Selna of the U.S. District Court for the Central District of California ordered that Avenatti be held in federal custody without bond and that he be transported to New York so that he can still attend his trial there, according to The Daily Beast.
A spokesman for the U.S. Attorney’s Office for the Central District of California told The Daily Beast that Avenatti will be held in custody “for the foreseeable future.”
Avenatti has pleaded not guilty to the criminal charges against him in New York and California.
“Completely innocent,” Avenatti told The Daily Beast on Tuesday as he was being led out of the courthouse following his arrest.
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