Michael Avenatti to Get New Sentence in LA Client Fraud Case (1)

Disgraced celebrity attorney Michael Avenatti‘s 14-year criminal sentence for embezzling settlements funds from his clients must be recalculated, a federal appeals court said Wednesday.

The Los Angeles trial court that handed down the sentence in 2022 made a number of legal errors in reaching that conclusion, including applying an unwarranted obstruction of justice enhancement, a three-judge panel for the US Court of Appeals for the Ninth Circuit said.

The lower court also failed to account for the value of the legal services and money he did pay his clients when calculating the amount the victims lost, the opinion said.

Avenatti, who rose to fame with his clashes with former President Donald Trump and representation of adult film actress Stormy Daniels, pleaded guilty to wire fraud and embezzling settlement funds from four of his clients.

Avenatti’s attorney Margaret Farrand of the Federal Public Defender’s Office said in a statement: “I am glad that the Ninth Circuit recognized the errors that wrongly increased Mr. Avenatti’s sentence.” The US Attorney’s Office in Los Angeles declined to comment.

He’d already been found guilty in two New York federal criminal trials for stealing advance payments for Daniels’ memoir and attempting to extort $25 million from Nike Inc. during settlement talks on behalf of another client. He was sentenced there to consecutive 24-month terms.

The Ninth Circuit opinion said the Los Angeles trial court should have recognized that Avenatti’s conviction for embezzling Daniels’ advance “was similar enough” to the other embezzlement cases in determining whether the sentences should run concurrently. The lower court had rejected Avenatti’s arguments that they the sentences should run concurrently.

The US Supreme Court last week declined to take his challenge to his conviction for the Daniels case.

The panel consisted of Circuit Judges Michelle T. Friedland and Roopali H. Desai and South Dakota US District Judge Karen E. Schreier, who sat by designation.

Avenatti is represented by the Federal Public Defender’s Office.

The case is USA v. Avenatti, 9th Cir., No. 22-50301, 10/23/24.