Attorney Michael Avenatti is scheduled to appear at a bail hearing in Santa Ana Wednesday after being taken custody for allegedly violating terms of his pretrial release amid a seemingly incessant fall from grace.
Avenatti was arrested about 6 p.m. Tuesday amid a state bar hearing held to consider whether to place him on an inactive attorney list. He is expected to appear before U.S. District Judge James Selna Wednesday afternoon.
Avenatti was arrested by Internal Revenue Service agents, but further details on the allegations against him were under seal, said Thom Mrozek, director of media relations for the U.S. Attorney’s Office.
Avenatti is expected to soon go on trial in New York next week for allegedly attempting to extort $25 million from Nike with threats to expose alleged payments by the shoe company in the recruitment of college basketball players.
Avenatti was indicted in April for allegedly defrauding clients and failing to pay personal taxes, as well as payroll and other taxes from his ownership of a coffee shop business. Before he was indicted, Avenatti agreed in a bankruptcy proceeding to turn over property from Eagan Avenatti LLP.
Tuesday’s hearing resulted from a request by the California State Bar to prevent Avenatti from practicing law based upon the belief he poses a “threat of substantial harm to the public” if he continues to perform legal work.
Avenatti acquired celebrity status alongside his former client, adult film star Stormy Daniels, who filed multiple lawsuits — unsuccessfully — against President Donald Trump. The lawyer, who flirted with a presidential run, became a fixture on cable news shows.
At Tuesday’s hearing, the state bar’s senior trial counsel, Eli Morgenstern, laid out a case for why Avenatti should be placed in “involuntary inactive status,” which would prohibit him from practicing law, but is separate from disbarment. The state bar has filed a disbarment case as a separate procedure. Proceedings in the matter began last June.
The complaint against Avenatti includes allegations that he stole nearly $840,000 from former client Gregory Barela, who also testified Tuesday. In previous court filings, Avenatti’s attorney denied he misappropriated Barela’s funds. Avenatti is accused of using a doctored document to scam Barela, funneling money from a lawsuit settlement fund to his own personal use.
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