Michael Avenatti Gets 14 Years in Prison for Stealing Millions from Clients
Stormy Daniels’s Former Lawyer Used $2.5M of Stolen Cash Toward Private Jet Hangared in Santa Barbara Airport
Michael Avenatti, the lawyer who represented adult film actress Stormy Daniels in lawsuits against Donald Trump, was sentenced on Monday to 14 years in federal prison for stealing millions of dollars from his clients and for obstructing the IRS’s efforts to collect more than $3 million in payroll taxes from an Avenatti-owned coffee business, according to the California State Attorney General’s Office.
“Michael Avenatti violated the trust placed in him by his clients. Instead of helping his clients receive the compensation that they were owed and needed, he pocketed the money, stealing from people who were already hurting,” stated Tyler Hatcher, the Special Agent in Charge of IRS Criminal Investigation’s Los Angeles Field Office. “The money was used to fuel a lavish lifestyle that had no limits.”
Some of that stolen cash — $2.5 million, to be exact — paid for a portion of Avenatti’s private jet that was hangared at the Santa Barbara Airport (SBA). The funds came out of settlement money awarded to Alexis Gardner, one of Avenatti’s four clients named in the lawsuit. In 2016, Gardner, a full-time theater student, was living out of her car and sought help from Avenatti.
In total, Gardner obtained a $3 million settlement in a matter involving her former boyfriend, pro basketball player Hassan Whiteside of the Miami Heat, which included a payment of $2.75 million in early 2017. Upon receipt of the payment, Avenatti used the bulk of it to purchase his portion of the $4.3 million jet. Avenatti never provided a copy of the settlement agreement to Gardner or told her the true terms of the settlement, according to prosecutors.
In addition, he falsely told Gardner that the settlement called for monthly payments over eight years. Avenatti gave Gardner a small “advance” for rent and made about 12 monthly payments, totaling approximately $227,500. After that, he stopped paying Gardner altogether.
According to prosecutors, although specific details differed between the four clients Avenatti swindled, “the general pattern was the same.” Avenatti would “lie about the true terms of the settlement agreement he had negotiated for the client,” then “conceal the settlement payments,” and “secretly take and spend the settlement proceeds that belonged to the client, and lull the client into not complaining or investigating further by providing small ‘advances’ on the supposedly yet-to-be paid funds.”
Federal agents flew off with Avenatti’s Honda HA-420 jet in an asset seizure back in 2019, leaving the jet’s co-owner, William Parrish, a former client of Avenatti, with two feet on the ground at SBA as he watched the confiscated jet depart — consequently bumped from the flight he had planned on taking that day.
In response, Avenatti apparently tweeted, “I have no interest in the plane and could care less.” Parrish ended up suing both the insurance company and Avenatti over being deprived of the plane’s use, possession, and value, and the case is still ongoing.
“The jet was the main asset [Avenatti] had remaining,” said Thom Mrozek, a U.S. Attorney’s Office spokesperson. Mrozek said that they are “still trying to resolve the issue” with Parrish over the plane.
At the time of the plane’s seizure, Parrish was also involved in another lawsuit against Avenatti, filed in the Santa Barbara County Superior Court. Avenatti was accused of defrauding Parrish and his business partner, Timothy Fitzgibbons, in connection with a prosecution case against infrared camera company FLIR.
FLIR agreed to pay the plaintiffs $39 million to settle that case, including $15.4 million in attorney fees. Parrish and Fitzgibbons claimed that Avenatti, his law firm, and other attorneys mishandled the settlement and misused settlement funds and that Avenatti was to blame for any unpaid attorney fees.
In July 2022, an Orange County civil jury found in favor of Parrish and Fitzgibbons, determining that they were not responsible for any unpaid attorney fees for their former lawyers in the FLIR case, and that if any funds were due, they should be paid by Avenatti, who had engaged in professional misconduct, including “secretly [transferring] $10 million in remaining fees into his law firm’s operating account and began spending it on a luxury home, cars, jewelry, law firm expenses, and concierge services,” according to the law firm representing Parrish and Fitzgibbons.
Avenatti’s sentencing on Monday concludes the series of federal cases made against the 51-year-old in the last two years. U.S. District Judge James V. Selna ordered that his term of imprisonment in Southern California run consecutive to sentences totaling five years for two separate convictions in New York. The other convictions include defrauding Stormy Daniels of $300,000 and trying to extort Nike, the shoemaking company, for up to $25 million.
Judge Selna, who said Avenatti “has done great evil for which he must answer,” also ordered the former attorney to pay a total of $10,810,709 in restitution to the four clients and to the IRS.
Avenatti, who has been in federal custody since February 7, will not be returning to his home in Newport Beach for some time.
“Michael Avenatti was a corrupt lawyer who claimed he was fighting for the little guy. In fact, he only cared about his own selfish interests,” said United States Attorney Martin Estrada. “He stole millions of dollars from his clients — all to finance his extravagant lifestyle that included a private jet and race cars. As a result of his illegal acts, he has lost his right to practice law in California, and now he will serve a richly deserved prison sentence.”
Support the Santa Barbara Independent through a long-term or a single contribution.
