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Michael Avenatti Pleads Not Guilty To Embezzling Millions From Clients

SANTA ANA (CBSLA) – Attorney Michael Avenatti was arraigned in federal court Monday in Santa Ana on allegations that he embezzled millions of dollars from his clients, including a paraplegic man and the ex-girlfriend of an NBA player.

Lawyer Michael Avenatti Makes First Court Appearance In California For Bank And Wire Fraud Charges
Celebrity lawyer Michael Avenatti arrives for his first hearing in Santa Ana federal court on bank and wire fraud charges on April 1, 2019 in Santa Ana, California. The celebrity lawyer is accused of misappropriating funds due to a client and is also charged by New York federal prosecutors of attempting to extort more than $20 million from Nike. Avenatti gained international attention for representing porn star Stormy Daniels in her lawsuits against President Donald Trump and his former lawyer Michael Cohen. (Photo by David McNew/Getty Images)

With a public defender at his side, the 48-year-old Avenatti pleaded not guilty to all charges in the 36-count indictment which alleges that he stole more than $12 million in settlement money from five of his clients, failed to file income tax returns, failed to pay millions in taxes, submitted fraudulent loan applications and concealing assets from bankruptcy court.

A trial date was set for June 25. Avenatti said he was still working out arrangements for private counsel.

He stole $4 million from a paraplegic man, which he used to finance a coffee business, prosecutors say. They also allege Avenatti also stole another $2.5 million from the ex-girlfriend of Miami Heat player Hassan Whiteside which Whiteside had paid to her as part of a settlement, according to the Los Angeles Times. Avenatti used that $2.5 million to purchase his portion of a private jet, the indictment reads.

In a related action, federal authorities on April 10 seized a Honda jet, according to the U.S. Attorney's Office.

Avenatti is accused of failing to file personal income tax returns since 2010. The indictment also alleges Avenatti gave a bank in Mississippi bogus financial data and fake personal income tax returns in order to obtain $4.1 million in loans.

In a separate federal case out of New York for which Avenatti was also charged last month, he is accused of attempting to extort more than $20 million from Nike over claims he had evidence that Nike employees funneled illegal payments to top high school basketball prospects and their families.

Avenatti has denied any wrongdoing in either case. He remains free on $300,000 bond.

"I intend to fully fight all charges and plead NOT GUILTY," he said in a tweet the day the indictment was announced. "I look forward to the entire truth being known as opposed to a one-sided version meant to sideline me."

Avenatti came to fame by representing adult film star Stormy Daniels in her lawsuit against President Donald Trump.

(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)

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