Michael Avenatti's Former Business Partner Alleges He Committed Bankruptcy Fraud

Photo: Drew Angerer/Getty

It turns out that lawyer Michael Avenatti is not a particularly good dude. We already knew that he was arrested for domestic violence in November (the police declined to file charges), but now it turns out that he also seemingly hid millions of dollars from bankruptcy court when his firm went under in 2017.

The firm, Eagan Avenatti, was required to file monthly reports on its finances throughout 2017. Avenatti signed those reports, swearing that they were accurate.

Advertisement

But the reports didn’t disclose that Avenatti had opened six bank accounts where he put millions of dollars of legal fees during the bankruptcy proceedings. That’s what his former legal partner Jason Frank is now claiming in court documents, according to the Los Angeles Times.

From the Times:

The reports also divulged nothing about the personal compensation to Avenatti, which would have required permission from the bankruptcy trustee, the court papers allege.

He used some of the money for personal expenses such as $13,000 in rent for his Century City apartment; a $3,640 payment on his Ferrari; $21,000 for Passport 420, an Avenatti company that owns a Honda jet; $150,000 for his troubled coffee company, Global Baristas; $53,600 for his ex-wife, Christine Carlin; and $232,875 for HTP Motorsport, his auto racing team, the records show.

Advertisement

If these claims are true, Avenatti could face perjury charges.

“This includes brazen acts of bankruptcy fraud,” Scott H. Sims, Frank’s lawyer, wrote in the court documents.

Advertisement

Avenatti denies the allegations.

“Every dollar has been properly accounted for and reported as required and as previously set forth in numerous accountings,” he told the Times. “This is much to-do about nothing.”

Advertisement

“There has never been any misdeeds or fraud—any claim to the contrary is politically motivated, completely bogus and driven by Jason’s own personal demons and vendetta,” he continued.

Frank and his team obtained evidence through subpoenas of banks showing that Avenatti was hiding money from bankruptcy court. It includes documents showing that one client, a Texas lawyer involved in a case with the NFL, sent nearly a million dollars to one of Avenatti’s undisclosed accounts.

Advertisement

From the Times:

Over the next two months, Avenatti moved nearly all of the $953,000 in seven transactions to another undisclosed account, according to the bank records that Frank filed in court. He then shifted it all again in seven transactions of almost identical amounts to Avenatti & Associates, his personal corporation.

Avenatti & Associates used much of the money to pay his personal expenses during those two months, the documents show.

Advertisement

Frank won a case against Avenatti last year that entitled him to $10 million from the firm. He says that he still hasn’t been paid. Avenatti will appear in court this Thursday to answer questions from Frank’s lawyers about the money.

It sounds like Avenatti, who led the charge against Donald Trump for paying $130,000 in hush money to porn actress Stormy Daniels, is just as much of a fraudster and criminal as many Trump associates. Oops!

Advertisement

Shortly after his domestic violence arrest, actress Mareli Miniutti filed a restraining order against Avenatti. Shortly thereafter, Avenatti announced he would not in fact be running for president. It seems that’s probably for the best.

Share This Story