Avenatti Sentencing Moved To Fall As COVID-19 Levels Rise

By Stewart Bishop
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Law360 (July 22, 2020, 9:15 PM EDT) -- A Manhattan federal judge on Tuesday agreed to delay until fall the sentencing of Michael Avenatti following his conviction for extorting Nike Inc., after the embattled celebrity lawyer raised logistical concerns about traveling from COVID-19 hot spots amid the pandemic.

U.S. District Judge Paul Gardephe ordered Avenatti's sentencing moved from Aug. 19 to Oct. 7, following a request from Avenatti's attorneys, who cited recent New York travel restrictions that require travelers from 31 U.S. states to quarantine for 14 days upon arrival in the Empire State.

Avenatti is under home confinement in Venice, California, and his attorney is based in Miami, Florida, two states that have seen recent surges in coronavirus infections.

"Trends in Florida and California are not encouraging," his attorneys said in a letter to the court. 

His lawyers said he would face substantial logistical challenges and financial costs if he were to relocate to an undetermined location in New York for 14 days in August. In addition to Avenatti and his Miami-based attorney, Scott Srebnick, any family member who wanted to attend the sentencing or any potential sentencing witness would also be required to quarantine for 14 days.

"This would place an unnecessary burden on undersigned counsel, Mr. Avenatti, and any attendees from one of the [impacted] states," the letter says.

They asked that the sentencing date be moved to a week before another criminal trial of Avenatti in New York.

In that case, Avenatti is accused of stealing hundreds of thousands of dollars from former client and adult film actress Stormy Daniels, whom he represented in her hush-money dispute with President Donald Trump.

Avenatti faces a third criminal case in California, which is scheduled to go to trial in December, over claims he embezzled millions of dollars from clients and committed tax evasion, obstruction, bank fraud and bankruptcy fraud.

He is currently on temporary release from confinement, though prosecutors have raised concerns that he may have violated his bail conditions by accessing the internet.

In the Nike extortion case, prosecutors accused Avenatti of using claims of corruption at Nike from his client, California Supreme Elite Basketball Program founder Gary Franklin Sr., to demand a $1.5 million settlement for Franklin and payment of between $15 million and $25 million for himself and fellow celebrity attorney Mark Geragos, who is not charged in the case, to conduct an internal investigation of Nike.

Avenatti never informed Franklin of his side ask for an internal investigation of Nike, according to the government.

Attorneys for Avenatti argued he was only engaged in good faith negotiations on Franklin's behalf and that Avenatti was only acting on the desire by Franklin and Auerbach to seek justice and expose corruption at Nike.

After a trial that lasted just over two weeks, Avenatti was convicted of extortion, transmission of interstate communications with intent to extort and honest services wire fraud.

On Saturday, Avenatti's counsel in the California action told the judge Avenatti is out of money and can't afford the legal fees for the upcoming embezzlement trial, and asked to be appointed as counsel under the Criminal Justice Act.

H. Dean Steward has been representing Avenatti from the very beginning of the embezzlement case, but his retainer "has long since run out" and Avenatti doesn't have the money to pay his counsel, according to an ex parte application filed Saturday.

Steward asked the court to appoint him as Avenatti's CJA counsel, saying it would save "considerable taxpayer funds" than having to start over with a new attorney.

Avenatti is represented by Howard Srebnick of Black Srebnick Kornspan & Stumpf PA, E. Danya Perry of Perry Guha LLP, Jose M. Quinon and Scott A. Srebnick.

The case is U.S. v. Avenatti, case number 1:19-cr-00373, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Craig Clough. Editing by Amy Rowe.

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

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1:19-cr-00373

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New York Southern

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May 22, 2019

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