Avenatti Trial Over Stormy Daniels' Book Money Set For April

By Stewart Bishop
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Law360, New York (November 10, 2020, 10:49 PM EST) -- A New York federal judge on Tuesday set a spring trial date for embattled celebrity attorney Michael Avenatti over accusations that he stole hundreds of thousands of dollars from adult film actress and former client Stormy Daniels.

During a teleconference, U.S. District Judge Jesse M. Furman said the trial would commence on April 26, but noted that it may have to be delayed in light of the uncertainty of the COVID-19 pandemic.

"COVID aside, it would be a firm trial date," Judge Furman said.

Prosecutors say Avenatti embezzled about $300,000 from Daniels by faking a letter supposedly authorizing Avenatti to receive advance fees from her publisher as part of a deal for Daniels' 2018 book "Full Disclosure."

Daniels, whose real name is Stephanie Clifford, is perhaps best known for suing President Donald Trump over a hush money deal allegedly intended to keep her from going public with claims she'd had an affair with him.

Avenatti has already been convicted of fraud and extortion charges in a separate case brought over a purported scheme to squeeze Nike Inc. for upwards of $25 million in exchange for holding back on negative press coverage of a purported youth basketball corruption scandal at the company. Avenatti, who is currently on temporary release from detention, has yet to be sentenced in that action.

He is also facing two other criminal trials in a California case over claims that he defrauded clients by lying to them about the details of settlements in their favor while using the money for his own ends. In addition, he is charged with bank fraud, tax evasion and other crimes related to his various business operations.

While saying that "the [COVID-19] situation is getting worse around the country and arguably looks like it may get worse here," Judge Furman said he preferred to set a trial date in the Stormy Daniels case rather than wait, noting that he needs to reserve one of the courtrooms in Manhattan federal court that has been modified to handle jury trials during the pandemic.

Judge Furman, like other New York federal judges, has a backlog of cases after jury trials were suspended in the Southern District of New York earlier this year due to the novel coronavirus outbreak.

An attorney for Avenatti, Robert M. Baum of the Federal Defenders of New York Inc., had asked the judge for a trial in the second quarter of 2021, in light of Avenatti's first California trial, which is scheduled to begin Feb. 23 and is expected to last two to three weeks. His second trial in that case is scheduled for October 2021.

Assistant U.S. Attorney Matthew Podolsky told Judge Furman the government was ready to try the case whenever the judge would like to schedule it, but was trying to be realistic in light of the February trial in California. He estimated the New York case would last about two weeks.

"The evidence in this case is quite straightforward, but we want to allow for jury selection and a defense case," Podolsky said.

Last year, U.S. District Judge James V. Selna of the Central District of California remanded Avenatti to federal custody after finding that prosecutors had demonstrated probable cause in alleging the attorney had been unlawfully moving his money around in order to hide it from judgment debtors. However, he was ordered to be temporarily released in April amid fears surrounding the pandemic. Since then, his return date has been pushed back several times.

On Tuesday, Avenatti again asked for an extension of his temporary release from custody, citing the rising number of coronavirus cases in California and across the nation. California federal prosecutors have asked that Avenatti again be remanded to federal custody, citing "clear and convincing" evidence that he used a computer to draft court documents, in violation of his release conditions.

The government is represented by Matthew Podolsky and Robert Sobelman of the U.S. Attorney's Office for the Southern District of New York.

Avenatti is represented by Robert Baum, Andrew Dalack and Tamara Giwa of the Federal Defenders of New York Inc.

The case is U.S. v. Avenatti, case number 1:19-cr-00374, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Hailey Konnath and Reenat Sinay. Editing by Michael Watanabe.

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

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