Michael Avenatti's bail revoked; trial in Nike case delayed

California attorney Michael Avenatti leaves a courthouse in New York following a hearing

A Justice Department official reported that Avenatti was arrested during his appearance before the State Bar Court in Los Angeles, where he was present for a disciplinary hearing over allegations he stole about $840,000 from a former client.

Avenatti was arrested by IRS agents on suspicion of violating his bail in a California case by committing a series of state and federal crimes while awaiting trial there and in NY, U.S. prosecutors revealed in court documents Wednesday.

Avenatti argued that the charges against him were politically motivated because of his history of representing porn star Stormy Daniels- who claimed to have had an affair with President Donald Trump.

Jose Quinon, a lawyer for Avenatti, sought a longer delay, saying that because the new accusations involved money his client controlled, they undermined Avenatti's ability even to pay for witnesses.

The documents say that in May, Avenatti "arranged for his ex-wife... to purchase a $50,000 Mercedes Benz in her name that defendant and defendant's personal driver, J.C., repeatedly used to transport defendant". "By doing so, defendant was clearly attempting to limit his creditors' ability to levy his accounts and recover the debts defendant owed to his creditors". U.S. District Court Judge Paul G. Gardephe told Avenatti's attorneys during a conference call on Wednesday that he wanted the trial to begin by at least January 27.

The US attorney's offices in the Southern District of NY and the Central District of California have charged Avenatti with a plethora of financial crimes that carry years of potential prison time, including charges of extorting Nike and multiple criminal counts related to alleged financial crimes.

A January 21 trial is scheduled, but "the arrest of Mr. Avenatti this close to the trial has essentially thrown the trial into chaos", U.S. District Judge Paul Gardephe, who oversees the case, said in a telephone conference.

Michael Avenatti has been arrested for violating bail.

Prosecutors said it appeared Avenatti's hiding of his $1-million payment had broken federal wire and mail fraud laws, as well as a federal law that prohibits the structuring of bank withdrawals to evade reporting to the government of currency transactions above $10,000.

In the Nike case, Avenatti was charged in Manhattan with threatening to publicly accuse the sportswear company of improperly paying families of college basketball recruits unless it paid him up to US$25-million to conduct a probe plus US$1.5-million to his client, a youth basketball coach. "There are certainly questions in my mind about why it was necessary to raise questions about bail violations so close to trial".

U.S. District Judge Paul Gardephe, who oversees the Nike case, said Avenatti's arrest caused an "enormous disruption" requiring an adjournment of the January 21 trial, which Avenatti will be allowed to attend. NY prosecutors filed additional charges in May.

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