LOS ANGELES—Michael Avenatti, the embattled former lawyer for AVN Hall of Famer Stormy Daniels, got some good news and bad news in his ongoing legal struggles Monday. In the good news, a federal judge ruled — at least for now — that Avenatti may remain out of jail for an additional 60 days, following July 24, which was the date he was set to return to Metropolitan Correctional Center in New York City, according to a report by the legal site Law 360.
Avenatti, who was convicted in February of attempted extortion against the Nike Corporation, faces a series of cases accusing him of pilfering money belonging to his clients. Included among those cases, his upcoming trial on charges that he embezzled nearly $300,000 from Daniels by diverting her 2018 book advance into his own bank account.
Avenatti then used Daniels’ money to cover his own personal expenses, according to the allegations.
In April, a judge allowed the disgraced lawyer to leave the Manhattan jail due to concerns that he could contract COVID-19 while incarcerated. Avenatti has been permitted to live under house arrest at the home of a friend, Jay Manheimer, in Venice, California.
But the government claims that Avenatti violated the terms of his release by using Manheimer’s computer to access the internet, which was specifically prohibited by the judge. In a chaotic, conference-call deposition on June 17, Manheimer appeared to acknowledge that Avenatti accessed the computer.
But on Monday, federal Judge James Selna ruled that Avenatti could remain out of jail for 60 days past his original 90-day release period. The judge said that he had not seen a confidential forensic report from prosecutors, which they say shows Avenatti violated his release terms.
Once prosecutors present him with the report, he could change his ruling if indeed the forensics prove that Avenatti used an internet-connected computer, according to the Law 360 report.
In the bad news for Avenatti this week, the California State Bar Association has filed a 573-page document spelling out in painstaking detail the numerous allegations against Avenatti of misusing client funds.
In one case, Avenatti won a $1.6 million settlement for a client in an intellectual property dispute. But when the cash was paid, it went into an account controlled by Avenatti, who never told the client the money had arrived, and never paid himself his agreed-upon fee out of the money, according to the allegations.
Instead, Avenatti made multiple withdrawals from the account and used the money on personal expenses, according to the Bar Association filing.
The Bar Association filing seeks to make Avenatti’s law license inactive, because there is a “reasonable probability” that he will be disbarred at a later hearing, the document says.
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