Avenatti faces new fraud, money laundering allegations

Avenatti faces new fraud, money laundering allegations
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Prosecutors alleged that attorney Michael Avenatti laundered money and committed fraud to conceal $1 million from creditors and one of his ex-wives in newly filed court documents, according to the Los Angeles Times.

Avenatti was hit with federal charges of extortion, fraud, embezzlement and tax evasion in New York and California last March. The new documents filed in Santa Ana federal court also allege he hid the $1 million, which he received in legal fees last April as part of a client’s settlement, from his ex-wife Lisa Storie and his former law partner Jason Frank and tax authorities.

They allege Avenatti received the $1 million cashier’s check April 30, when he owed Storie about $2.5 million in child and spousal support as well as $5 million to Frank and $2.2 million to William Parrish, a former client in Santa Barbara County. For over a year and a half, the filings claim, he “has brazenly attempted to defraud and conceal his assets from these creditors.”

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Avenatti was arrested earlier this week on charges of bail violation, according to the newspaper. His bail was conditional on him not violating federal, state or local laws before his trial, and prosecutors said the alleged concealment of the $1 million payment would be in violation of federal wire and mail fraud laws as well as federal laws against structuring bank withdrawals to conceal transactions from the government.

A New York judge, meanwhile, on Wednesday rejected a bid by Avenatti to dismiss the extortion charges after he attempted to argue they were politically motivated based on his representation of adult-film actress Stormy Daniels.

“Avenatti is being prosecuted for activities wholly unrelated to the political arena," wrote the judge.