Michael Avenatti convicted of wire fraud and aggravated identity theft for stealing from Stormy Daniels

By Lauren del Valle and Kara Scannell, CNN

Michael Avenatti was convicted Friday of wire fraud and aggravated identity theft for stealing from Stormy Daniels.

Prosecutors alleged that Avenatti — who helped negotiate the $800,000 advance for Daniels’ October 2018 book “Full Disclosure” — defrauded his former client by instructing her literary agent to send two of the installments of the advance totaling nearly $300,000 to an account controlled by him, rather than directly to Daniels, without her knowledge.

Speaking to cameras outside a federal courthouse in lower Manhattan Friday, Avenatti said he is “very disappointed” in the verdict.

“I’m very disappointed in the jury’s verdict. I look forward to a full adjudication of all of the issues on appeal,” Avenatti told CNN.

Avenatti is scheduled to be sentenced on May 24.

The verdict came after an eventful day when the jury asked the judge for help, saying one of the 12 was “acting on a feeling” and not considering evidence.

“We have one juror who is refusing to look at evidence and is acting on a feeling. We need assistance on moving forward. She does not believe she needs to prove her side using evidence and refuses to show us how she has come to her conclusion,” the note said, according to Judge Jesse Furman.

“Please help us move forward not going on any evidence, all emotions and does not understand this job of a jury,” the note added, with the word “please” underlined.

Avenatti moved for a mistrial arguing that the jury is clearly deadlocked, and any further instruction or action would be coercive.

Furman considered the motion but denied it saying, “I don’t think we’re there yet.”

Avenatti opposed some wording in the instruction telling the judge it could “appear to convince a potential hold-out juror for acquittal.” The judge noted Avenatti’s assumption that the jury was leaning to convict him and said they had no way of knowing the jury split.

The jury had been deliberating since Wednesday.

Furman also denied prosecutors’ request to ask the jury foreperson to identify the holdout juror so the court may consider remedies including dismissal of that juror for refusing to deliberate.

Just before noon, the judge brought the jury into the courtroom to instruct jurors of their duties to deliberate based on the evidence and charge them to continue pushing forward. The instruction in part reminded jurors they are not “to be swayed by sympathy or emotion” when considering evidence to reach a verdict.

The jury of seven women and five men had no visible reactions to the judge’s instructions.

Daniels’ CNN interview

After the jury left for lunch, the judge discussed his earlier ruling denying Avenatti’s motion for a mistrial based on Daniels’ Friday interview on CNN’s “New Day,” calling it “beyond frivolous.” Avenatti said the interview was “outrageous.”

In the interview, Daniels said she was “flabbergasted” that the jury was still deliberating and speculated there could be some bias against her for her work in the adult film industry and belief in paranormal activity.

“Who cares what I believe in, who cares what my spirituality is, where I work, what I’ve done,” Daniels told CNN’s Brianna Keilar.

“Theft is theft, forgery is forgery — it really shouldn’t matter, it seemed pretty cut and dry” she said.

If Avenatti is found not guilty, she said, that “sets a precedent that is absolutely terrifying for anybody in the adult film business and anybody that works in the paranormal field or even does paranormal as a hobby.”

“It basically is free license to commit crimes against us and get away with it, and that’s really terrifying,” she said.

The judge said he watched the interview but there was no suggestion any jurors saw it. He advised both parties to rein in comments to the media.

Dramatic testimony from Stormy Daniels

The former lawyer, a pugnacious Trump critic who once considered a presidential run of his own, fell from grace after being hit with three federal indictments in a six-week period in 2019.

The government rested its case against Avenatti Monday morning after calling 10 witnesses across six days of trial testimony. Avenatti, who dismissed his court-appointed attorneys on the second day of trial to represent himself, ultimately declined to testify in his own defense and did not call any witnesses.

Asked after the verdict if he regretted representing himself or not testifying he said, “Not at all. I was true to myself.”

Jurors heard from the literary agent, Luke Janklow, who testified that Avenatti funneled contact about the book deal financials around Daniels to him, at times telling Janklow not to answer Daniels’ messages. Prosecutors also presented emails and text messages mapping the paper trail of Avenatti’s efforts to redirect the payments to the account he controlled.

Daniels testified for about seven hours across two trial days during the government’s case.

Prosecutor Robert Sobelman methodically went through months of text messages between Daniels and Avenatti in which she repeatedly asked him about the status of her third book advance payment for nearly $150,000.

In text messages, Avenatti told Daniels he was “working on it” and suggested to her the publishing company was withholding money from her because she hadn’t met her publicity requirement for the book.

Avenatti said in a statement to CNN ahead of the trial that he is “completely innocent of these charges. The government is spending millions of dollars to prosecute me for a case that should have never been filed.”

At one point during Avenatti’s cross examination of Daniels, when he asked if she had told the government during pretrial interviews that he was typically “nice and respectful,” his former client said, “You lied to me, that’s not respectful.” Daniels eventually conceded that she’d made the statement but added, “I was wrong.”

Avenatti became a cable television fixture during his representation of Daniels, who was a central figure in the hush-money scandal that resulted in Manhattan federal prosecutors charging Michael Cohen — former President Donald Trump’s onetime personal attorney — with campaign finance violations for money he paid to silence women, including Daniels, who claimed affairs with Trump.

Avenatti rehashed the 2016 hush money payments Cohen made to Daniels on behalf of Trump during his cross examination of Daniels, peppering her with questions about her previous denials of the affair with Trump in public statements. (Trump has denied the alleged affair.)

Cohen, who pleaded guilty to those and other crimes, was recently released after serving a prison and home-confinement sentence.

Daniels testified she denied media reports that she’d had a “romantic affair” with Trump at the time, “because it was not romantic.”

“I did not have a relationship with Donald Trump,” Daniels said Friday. Unprompted, she added, “I don’t consider getting cornered coming out of the bathroom to be an affair.”

Avenatti faces prison time for other fraud conviction

Avenatti was released from the now-defunct Metropolitan Correctional Center in Manhattan in April 2020 over Covid-19 concerns amid the rise of the pandemic. He has been in home confinement at a friend’s apartment in California ahead of this trial.

In February 2020, Avenatti was convicted in New York of attempting to extort millions of dollars from Nike, by threatening to publicly claim the athletic apparel giant was illicitly paying amateur basketball players. He was sentenced last July to 30 months in prison for which he’s expected to report to a federal prison work camp in Oregon.

His report date for that sentence has been pushed pending the outstanding litigation.

He recently filed a formal claim for $94 million in damages against the Bureau of Prisons for his treatment at MCC, where Avenatti alleges he was treated poorly in dire conditions at the order of then-Attorney General William Barr, according to the complaint.

A federal judge granted a mistrial in another case in California in which Avenatti was accused of embezzling nearly $10 million in settlement funds from at least five clients for personal use. The judge granted the motion for mistrial last August on technical grounds, ruling that prosecutors failed to turn financial evidence over to Avenatti’s team. Avenatti, who also represented himself in that case, appealed the possibility of a retrial and it is unclear if he will be retried in that case.

Avenatti still faces a second trial in California where he has been charged with tax fraud and bank fraud. He has pleaded not guilty.

This story has been updated with additional details.

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