Michael Avenatti pleads guilty to fraud, obstruction charges

By Jody Godoy

SANTA ANA, Calif. (Reuters) -Michael Avenatti, the brash lawyer known for taking on then-U.S. President Donald Trump, on Thursday pleaded guilty to fraud and obstruction charges, in a bid to end years of defending against criminal charges that destroyed his career and led to two criminal convictions.

Avenatti, 51, admitted to four counts of wire fraud for defrauding clients and one count of obstructing the Internal Revenue Service on a coffee business he once operated.

U.S. District Judge James Selna in Santa Ana, California, accepted the plea, and scheduled Avenatti’s sentencing for Sept. 19.

Avenatti faces up to 83 years in prison, but would likely get far less.

He already faces five years behind bars after being convicted in February of embezzling nearly $300,000 from his most famous client, the porn actress Stormy Daniels, and in 2020 for trying to extort up to $25 million from Nike Inc.

Avenatti has been defending in California against 36 criminal charges, including other wire fraud counts, lying to a bankruptcy court and defrauding a bank.

He pleaded guilty to the five charges without reaching a plea agreement with prosecutors on the others.

Assistant U.S. Attorney Brett Sagel told Selna that prosecutors would discuss internally how to proceed on those 31 charges.

Dressed in a gray sweatshirt and khaki pants, Avenatti told Selna he “misappropriated and misused” settlement funds belonging to four clients and “acted corruptly” in trying to obstruct the IRS.

In offering a plea, Avenatti had said in a court filing he wanted “to be accountable; accept responsibility; avoid his former clients being further burdened; save the court and the government significant resources; and save his family further embarrassment.”

Avenatti disputed a suggestion by prosecutor Ranee Katzenstein that he pay $9 million in restitution to victims as part of his sentence.

“That will be a fight for another day,” Avenatti said. “My position is it’s drastically less than that.”

His stretched finances have been discussed frequently in earlier court proceedings.

Though he is not a criminal lawyer, Avenatti has represented himself in the California case, and did so in the Daniels case. The Daniels and Nike cases were tried in Manhattan.

Dean Steward, a lawyer advising Avenatti on his defense, declined to comment after Thursday’s hearing.

Avenatti is appealing his conviction and 2-1/2-year sentence in the Nike case, and has filed a notice of appeal of his conviction and four-year sentence in the Daniels case.

The sentences partially overlap, resulting in the five-year term, which he has begun serving at a minimum-security federal prison in San Pedro, California.

(Reporting by Jody Godoy in Santa Ana, Califorina and Luc Cohen in New York; Editing by Sandra Maler and Jonathan Oatis)