By Lauren Berg

Law360 (September 30, 2020, 10:05 PM EDT) -- The California federal judge overseeing Michael Avenatti's upcoming embezzlement trial extended the embattled attorney's temporary release from prison by two more weeks after Avenatti cited Dr. Anthony Fauci's warning this week that "we're not in a good place" with the coronavirus pandemic.

Avenatti, an attorney accused of embezzling his clients' money, was set to return to prison on Oct. 6 when his temporary release expired, but in a one-page order Tuesday, U.S. District Judge James V. Selna granted his to extend the release until Oct. 20 after Avenatti said he was concerned about the continued spread of the novel coronavirus.

Avenatti said the risks and fallout from the pandemic are "exponentially greater" now in the Los Angeles area, where he is currently free on home confinement, than when he was first released from prison in April. He said California had surpassed 813,000 confirmed cases, a 17,600% increase from when he was first released and the state had about 4,600 cases.

"Meanwhile, medical expert after medical expert is predicting a second wave that will likely be far more deadly and pervasive than the first wave, including in California and in the Central District," Avenatti said.

The attorney also cited Fauci, the longtime director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health, who warned in an interview on ABC's "Good Morning America" that "we're not in a good place" with flu season approaching and coronavirus cases beginning to rise.

The U.S. is seeing an uptick in cases, Avenatti said, with 55,000 new infections reported Sept. 25. He also cited a University of Washington model that projects the U.S. death rate will quadruple over the next few months, with the country experiencing 3,059 deaths per day by January.

Avenatti said he has health conditions that put him at a higher risk from the virus and that the infection rate for prisoners is 5.5 times higher than for the U.S. population and the death rate in prisons three times higher.

Judge Selna granted Avenatti's request to extend his release by two weeks.

Earlier this month, federal prosecutors asked the judge to send Avenatti back to prison, citing "clear and convincing" evidence that he used a computer to draft court documents, in violation of his release conditions.

The government raised concerns in June that Avenatti was accessing the internet through a computer owned by his bail-release custodian and longtime friend Jay Manheimer. Judge Selna said the situation needed further investigation and extended his release to Sept. 21.

"In direct violation of this condition, defendant used Manheimer's computer to personally draft or edit pleadings in this case, including a status report in which defendant claimed that he could not prepare for trial in this matter because his release conditions prevented him from using a computer to review discovery or work on motions," prosecutors said.

A forensic report showed that Manheimer's computer had been used to create Microsoft Word documents and PDFs and to send and receive emails, although it could not be determined whether Avenatti prepared the documents, the government said.

But Avenatti slammed the bid to revoke his bond, saying the government was relying on "unreliable and inadmissible" data.

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

Meanwhile, 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.

Last month, Judge Selna mulled the idea of splitting the December trial in two to separately try the wire fraud charges from the bank and tax fraud charges. Federal prosecutors argued the charges are too entwined to try separately, but Avenatti's attorney, H. Dean Steward, agreed with the judge that the wire fraud charges should be severed.

In February, Avenatti was found guilty of extorting Nike in a separate New York case. He faces another federal prosecution in New York over his alleged theft of hundreds of thousands of dollars owed to high-profile client Stormy Daniels from her book deal.

Counsel for Avenatti and a representative for the government declined to comment Wednesday.

The government is represented by Julian L. Andre 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. 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, Reenat Sinay, Dave Simpson, Craig Clough and Stewart Bishop. Editing by Peter Rozovsky.

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