Avenatti Should Be Far More Concerned About the California Case

Posted on Apr 1, 2019 in Business Litigation

While Mr. Avenatti was arrested last Monday afternoon in New York’s new Hudson Yards development, for extorting more than $15 million from Nike, his bigger peril lies in Los Angeles. The New York allegations hinge on whether Avenatti extorted Nike by demanding it pay $22 million or he would release information to the media. That allegation relies on Mr. Avenatti’s intent — whether it was extortion or zealous advocacy — which can be difficult to establish.

But the charges in California presented on the same day will be difficult to overcome. Avenatti is accused of defrauding a client and a bank. Unlike the New York claims, those claims are proven by a paper trail, a far easier way to establish fraud. He allegedly obtained $4 million in bank loans and pocketed $1.6 million that belonged to a client. In California, federal prosecutors said Avenatti also filed bogus tax returns to fraudulently secure $4 million in loans from a Mississippi bank and embezzled a client’s settlement funds.

The filing of false tax returns or the wrongful taking of money from a client is black and white. Either the tax returns are accurate or not. Either he took funds or did not. While Avenatti continues his media circus, this time by proclaiming his innocence, the facts are the facts … and he will not be able to wiggle around those documents.

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