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Opening of the trial for embezzlement of Michael Avenatti

Alexis Gardner was living in his car in West Hollywood when she hired Los Angeles attorney Michael Avenatti in 2016 to strike a deal with her ex-boyfriend, professional basketball player Hassan Whiteside.

Avenatti quickly struck a deal, but prosecutors said he stole the upfront payment of $ 2.75 million from Whiteside to Gardner and spent most of it on a private jet.

Avenatti covered the theft, they say, by telling his client that Whiteside, then with the Miami Heat in the NBA, would send him monthly payments of $ 16,000 for eight years.

Gardner texted Avenatti more than a year later that Whiteside was behind on payments.

“????” Avenatti responded. “I’ll find out what’s going on.”

The alleged deception was exposed on Wednesday by the assistant to the US attorney. Brett Sagel during the opening arguments of Avenatti’s fraud trial in Santa Ana. Prosecutors say he embezzled nearly $ 10 million in settlement funds from Gardner and four other clients.

The criminal trial is the second of Avenatti’s four, a testament to the remoteness of his days as a famous lawyer for porn actress Stormy Daniels in his lawsuit against former President Trump.

Avenatti, 50, was sentenced in New York two weeks ago to 30 months in federal prison for attempting to extort up to $ 25 million from Nike, Inc., and for defrauding another client, Gary Franklin, former coach of a youngster from Los Angeles. basketball program.

In the third trial, also in Santa Ana, Avenatti will face federal charges of bank fraud, failure to file tax returns, bankruptcy fraud, perjury and related crimes.

In the fourth, in a federal court in New York, he is accused of robbing Daniels by skimming the money from his contract to write a memoir detailing his alleged sexual date with Trump.

The criminal charges cost Avenatti his California law license, but US District Judge James V. Selna nonetheless allowed him to represent himself at the fraud trial.

“Be clear: no crime was committed by me, and I never intended to steal or defraud a customer of money at all,” Avenatti told the jury on Wednesday. “Not last week, not last month, not last year. Never.”

The trial opened when Sagel told jurors that Avenatti stole the $ 2.75 million Whiteside, now a Sacramento Kings player, sent to his company as part of the $ 3 million settlement.

Sagel did not explain why Gardner sought the settlement, but she and Whiteside said in a joint statement in 2019 that it “reflected Alexis’ investment of time and support over several years as Hassan pursued a career in the NBA “.

As soon as Avenatti got the money, Sagel said, he invested $ 2.5 million to purchase a Honda HA-420 jet. Federal authorities seized the plane at Santa Barbara airport in 2019.

The prosecutor showed the jury some of the text messages showing Avenatti cheating on Gardner about the Whiteside payments, claiming he lied the same way he lied to other clients whose money he stole.

“You will see and hear throughout this trial the false statements the accused has made to his clients,” Sagel said.

One of Avenatti’s other clients, Geoffrey Ernest Johnson, was a paraplegic with a mental disability. He won a $ 4 million LA County settlement in 2015 after continuing his treatment at the Twin Towers Correctional Facility.

Johnson twice jumped from an upper floor of the prison in suicide attempts, injuring himself so badly the second time around that he will never be able to walk again.

Sagel told the jury that Johnson hoped to use the settlement money to buy a disabled-accessible house and van to “make life in a wheelchair easier.”

The prosecutor said Avenatti got the check for $ 4 million, withheld the payment from Johnson and spent “the entire amount” on himself and his businesses. Avenatti then took issue with this remark when Patrick McNicholas, a fellow lawyer in the case, testified that his firm had received more than $ 350,000 in fees from the settlement.

In his opening remarks, Avenatti described himself as a fighter for “the little guys”.

He remembers meeting Gardner at a Starbucks in West Hollywood and hearing his story of sleeping in his car in the parking lot of a supermarket and “hoping that the security guards wouldn’t knock on his window in the morning. middle of the night and tell him to go ”.

“I was horrified,” he said. He and his company “immediately made sure she had a place to rest at night,” Avenatti said.

As for Johnson, he said he and his company, Eagan Avenatti, now defunct, paid for his “extremely expensive” accommodation and medical care.

Avenatti also accused the government of failing to take into account all personal expenses that he said were rightly deducted from his clients’ settlements, such as travel expenses and the cost of purchasing transcripts of testimony. .

The investigation and prosecution “were marred by negligence,” he said. “We’re going to show it’s smoke and mirrors.”

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