Lawyer Michael Avenatti, who was arrested on Tuesday, is being accused of orchestrating various schemes to hide his assets from lenders and continue to live a luxurious lifestyle – including living in a $ 11,000 a month apartment, driving a Mercedes and stay in luxury resorts – even though debts exceed $ 10 million.
Avenatti was arrested by IRS agents on suspicion of breaching his bail in a California case for committing a series of state and federal crimes while awaiting trial there and in New York, US prosecutors said in court documents on Wednesday. .
He was arrested in Los Angeles during a break at a disciplinary hearing at the California Bar for allegations that the high-profile lawyer misled a client by $ 840,000.
"The defendant's extensive pattern of criminal conduct and the overwhelming evidence supporting these accusations demonstrate that the defendant is a substantial danger to the community," prosecutors wrote, who want Avenatti's bail revoked. "If allowed to remain in bond, the defendant will almost certainly continue to engage in additional fraudulent and obstructive conduct."
Unsealed documents in California said on Wednesday there is a probable cause to believe that Avenatti – while on probation – committed federal crimes, such as postal and electronic fraud, and state crimes, including money laundering and fraudulent removal. properties.
The documents say that in May, Avenatti "arranged for his ex-wife … to buy a $ 50,000 Mercedes Benz on his behalf that the accused and the accused's personal driver, J.C., used to transport the accused."
"Also, between June 2019 and September 2019, the defendant & # 39; drew & # 39; bank checks to himself in order to limit the amount of funds available in his US bank account on at least eight occasions. separate, "he adds. "In doing so, the defendant was clearly trying to limit his creditors' ability to collect their bills and recover the debts the defendant owed to his creditors."
Avenatti was expected to appear in the federal court of Santa Ana, California, on Wednesday morning.
"Completely innocent," Avenatti said as he was taken out of court after his arrest on Tuesday night, according to the Daily Beast.
The arrest threatens to disrupt Avenatti's trial, scheduled for next week in Manhattan, on charges that he attempted to extort $ 25 million from Nike, a New York federal judge told a hearing on Wednesday.
"Avenatti's arrest so close to trial brought the trial to chaos," US District Judge Paul G. Gardephe said. Avenatti has been on bail in the California case for a long time. So surely there are doubts in my mind as to why it was necessary to raise allegations of bail violations so close to trial and it has certainly placed defense attorneys in a very difficult position. . ”
Avenatti is tried in California in May on 36 counts that includes allegations that he defrauded millions of dollars, hardened the IRS and committed bank fraud.
He pleaded not guilty to these charges, along with allegations in a federal court case in Manhattan, alleging that he had stolen former porn star Stormy Daniels from the product of a book contract. New York's second trial was also scheduled to begin in May.
Fox News's Louis Casiano and the Associated Press contributed to this report.