Avenatti Gets Another Jail Reprieve In Calif. Until May

By Lauren Berg
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Law360 (March 16, 2021, 7:08 PM EDT) -- Michael Avenatti can stay in home confinement until the end of May and leave the residence to get his COVID-19 vaccinations, a California federal judge ruled Tuesday, after the disgraced attorney pointed out the continuing risks of the coronavirus in the Golden State.

U.S. District Judge James Selna, who is overseeing the embezzlement case, granted Avenatti's urgent Monday request to extend his temporary release from March 31 until May 31 — making it his sixth coronavirus-related extension — after the attorney argued that the virus is still too great a risk.

Citing Johns Hopkins University statistics, Avenatti said California has surpassed 3.6 million confirmed cases — a 78,000% increase over when the attorney was first released from jail — with more than 55,500 deaths reported in the state.

"Moreover, medical experts are warning that the pandemic is far from over, the threat remains significant and that precautions used over the last year need to continue," Avenatti argued.

Prosecutors quickly opposed Avenatti's request, saying the attorney is now eligible to receive a vaccine and that the Bureau of Prisons has been vaccinating incarcerated individuals all over the country.

But on Tuesday, Judge Selna granted Avenatti's request and said that he can leave the home he's staying in to get his COVID-19 vaccinations, as long as he is supervised by his lawyer or the man he is staying with during his home confinement.

Representatives for Avenatti and the government both declined to comment Tuesday.

Avenatti's temporary release from jail has been extended six times since he was first released in April at the start of the pandemic after Judge Selna ordered him jailed ahead of trial.

After meeting and conferring about moving the first part of the bifurcated trial from Feb. 23 to mid-July, prosecutors in January told Judge Selna that July 13 would be a good date for trial of the first 10 counts in the case. The judge granted the request a few days later, according to the court docket.

The 10 counts in question are for wire fraud in connection with allegations Avenatti siphoned money from five clients' settlement awards. The remaining counts — for bank and tax fraud related to various business operations — are currently set for trial Oct. 12.

On Monday, federal prosecutors hit back at Avenatti's request to hold the government in contempt over a discovery dispute, saying the attorney hasn't offered any evidence that prosecutors have withheld exculpatory evidence. Prosecutors also said Avenatti's motion copied "nearly word for word" a motion from an unrelated case against former national security adviser Michael Flynn.

In the indictment against Avenatti announced in April 2019, prosecutors claim he defrauded five of his former clients by lying to them about the details of settlements in their favor while using the money for his own ends.

Prosecutors say Avenatti used millions of dollars in ill-gotten funds to pay bankruptcy creditors and other clients from whom he had taken money.

In addition, Avenatti was stiffing the government on payroll taxes from his Tully's Coffee business to the tune of $3.2 million between 2015 and 2017, according to the indictment. He is also charged with failing to file personal tax returns between 2014 and 2017 and failing to file returns for his law firms Eagan Avenatti LLP and Avenatti & Associates between 2015 and 2017.

Avenatti was found guilty last year of extorting Nike in a separate New York case. The attorney's sentencing was recently delayed until May because of a spike in COVID-19.

The government is represented by Brett A. Sagel and Alexander C.K. Wyman 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. Michael Avenatti, case number 8:19-cr-00061, in the U.S. District Court for the Central District of California.

--Additional reporting by Pete Brush, Cara Salvatore and Stewart Bishop. Editing by Bruce Goldman.

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

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8:19-cr-00061

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California Central

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April 10, 2019

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