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State Bar Moves to Suspend Avenatti

By William Vogeler, Esq. on June 05, 2019

The California State Bar is moving to disbar Michael Avenatti, who is probably thinking now about where he went wrong -- if not that, then how to defend himself. Not so long ago, he was the media darling who took on the President of the United States. He even flirted with a run at the presidency. Then everything started to fall apart.

His mistake was not that he represented a porn star in a case against the president. His mistake,  was that he allegedly stole $300,000 from her and millions more from other clients.

Biggest Mistake?

The State Bar issued a consumer alert about Avenatti, notifying everybody that it was moving to place him on involuntary inactive status because he allegedly "poses a substantial threat of harm to clients of the public." Unless Avenatti can overcome the mounting evidence against him, he will most likely lose his license practice law.

The disciplinary action came after Avenatti was indicted for stealing nearly $300,000 from Stormy Daniels, the former porn star who says she had an affair with President Trump. The president denies the allegation, but his former attorney Michael Cohen said he paid Daniels $130,000 to cover-up the affair. But there's more to the Avenatti story. He has also been indicted in California on 36 counts of embezzlement, wire fraud, tax evasion, bankruptcy and bank fraud. He allegedly stole millions of dollars from five clients, including a paraplegic.

In the 573-page petition filed by the State Bar, the allegations focus largely on Avenatti's conduct toward former client Gregory Barela. He alleges Avenatti illegally withheld more than $700,000 of his funds in a "Ponzi-like" scheme and repeatedly lied about it. The petition says the evidence is "clear and convincing."

Adding Up

And then there was the Nike extortion thing. According to reports, he was arrested on federal charges in New York and then released on $300,000. (Wait, was that Stormy's money?) In that case, he allegedly tried to extract more than $20 million from Nike by threatening to "use his ability to attract public attention." He claimed the shoe company paid high school athletes to lure them to play basketball at Nike-sponsored events.

After he was arrested, Avenatti said Nike "pulled a stunt" by having arrested before he could go public with the story. "They knew they could not control me," he said. "They effectively had to shoot the messenger."

So that was the mistake. Nobody could control him.

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