Avenatti Gets 2nd Shot At Pretrial Release Amid Virus Fears

Law360 (March 25, 2020, 9:47 PM EDT) -- A California federal court on Wednesday invited Michael Avenatti to request that it reconsider an earlier decision denying the embattled attorney's bid for release from custody pending his upcoming embezzlement trial, citing the "evolving nature of the COVID-19 pandemic."

The minute order issued by U.S. District Judge James V. Selna came only four days after he denied a request by Avenatti to be released from custody due to the threat of the coronavirus spreading in the New York area where he is being held.

Judge Selna's order noted the changing nature of the COVID-19 pandemic in New York City and said Avenatti's application should address several issues, including "the party or parties into whose 'custody' he should be released, an issue not previously addressed by Avenatti."

Avenatti is being held at the Metropolitan Correctional Center in Manhattan after a New York jury found him guilty last month of extorting Nike Inc. He is due to be sentenced June 17.

He was arrested in the California case in April 2019 and charged with embezzling millions from five separate clients, tax evasion and obstruction, bank fraud, and bankruptcy fraud. He was freed on bail, but in January he was arrested at a California State Bar hearing when Judge Selna determined Avenatti may have been violating the terms of his release.

The embattled attorney is also facing a trial in New York on allegations he stole hundreds of thousands of dollars from former client Stormy Daniels, the adult film actress who said she had an affair with now-President Donald Trump.

Judge Selna's minute order indicating he may reconsider releasing Avenatti occurred after the attorney filed an ex parte application on Tuesday seeking to push back his May 19 trial, saying there is a "mountain of discovery" and that he needs more time to prepare his case. Avenatti also cites court closures related to the coronavirus as a factor.

The district in which Avenatti's California case is being held, the Central District of California, is operating under severe limitations until May 1 due to the COVID-19 outbreak, with civil cases only expected to hold hearings by telephone for emergency matters such as temporary restraining orders and preliminary injunctions.

Avenatti's previous ex parte application, filed March 18, sought pretrial release, citing the COVID-19 outbreak in New York and the attorney's higher risk of contracting the virus because he allegedly suffered from pneumonia about six months ago.

He also cited allegedly poor protocols at the MCC facility, and stated, "To date, the MCC has not met even the most basic recommendations of the CDC for preventing the spread of the coronavirus. MCC has no screening mechanism in place for staff or visitors, other than self-reporting."

The Metropolitan Correctional Center did not immediately respond to a request for comment. 

Avenatti had further proposed release to home detention to a residence "approved by Pre-Trial Services with monitoring, no bank accounts or access to funds of any kind without pre-approval of Pre-Trial Services and all transactions over $1,000 to be approved in advance by Pre-Trial Services."

"We are working on a response addressing the court's concerns," Avenatti's attorney H. Dean Steward said in an email to Law360. "This could be a life or death issue."

Counsel for the government did not immediately respond to a request for comment.

The government is represented by Julian L. André and Brett A. Sagel of the U.S. Attorney's Office for the Central District of California.

Avenatti is represented by H. Dean Steward.

The case is U.S. v. Avenatti, case number 8:19-cr-00061, in the U.S. District Court for the Central District of California.

--Additional reporting by Lauren Berg. Editing by Michael Watanabe.

For a reprint of this article, please contact reprints@law360.com.

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April 10, 2019

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