Michael Avenatti hit with 36-count federal indictment that could put him behind bars for 335 years

Michael Avenatti, the former Stormy Daniels attorney and once-rumored 2020 presidential candidate, is now facing up to 335 years in prison after being slapped with three dozen new federal charges alleging he stole millions of dollars from his clients, failed to pay taxes and lied in bankruptcy cases, amongst other accusations.

The 48-year-old was indicted late Wednesday by a Southern California grand jury following his arrest last month in New York for allegedly trying to shake down Nike for up to $25 million.

“I intend to fully fight all charges and plead NOT GUILTY,” Avenatti posted on Twitter Thursday after being freed on a $300,000 bond. “I look forward to the entire truth being known as opposed to a one-sided version meant to sideline me.”

If convicted on all of the new charges, Avenatti would face 335 years in prison, federal investigators say. He is scheduled to be arraigned on April 29 in United States District Court in Santa Ana. The Los Angeles Times says Avenatti already faces up to 47 more years if convicted in the Nike case.

"These four areas of criminal conduct alleged in the indictment are all linked to one another because money generated from one set of crimes appears in other sets – typically in the form of payments to lull victims and to prevent Mr. Avenatti’s financial house of cards from collapsing,” United States Attorney Nick Hanna said Thursday.

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A U.S. Attorney’s Office spokesman, Thom Mrozek, confirmed to Fox News that federal agents seized a Honda HA-420 twin-engine jet from Santa Barbara Airport about 10 a.m. after a federal judge issued a warrant. (William La Jeunesse/Lee Ross)

The 61-page indictment alleges Avenatti embezzled from a paraplegic man and four other clients and deceived them by shuffling money between accounts to pay off small portions of what they were due to lull them into thinking they were getting paid.

Avenatti is also charged with not paying personal income taxes, not paying taxes for his various businesses, including two law firms, and pocketing payroll taxes from the Tully's Coffee chain that he owned, the indictment said.

Between September 2015 and January 2018, Global Baristas US, the company that operated Tully's, failed to pay the Internal Revenue Service $3.2 million in payroll taxes, including nearly $2.4 million withheld from employees, the indictment said.

When the IRS put tax levies on coffee company bank accounts to collect more than $5 million, Avenatti had Tully's employees deposit cash receipts in a little-known account, the indictment said.

Avenatti was also charged with submitting fraudulent tax returns to get more than $4 million in loans from The Peoples Bank in Biloxi, Mississippi, in 2014. The tax returns he presented to the bank were never filed to the IRS, prosecutors have said.

“For 20 years, I have represented Davids vs. Goliaths and relied on due process and our system of justice,” Avenatti tweeted Thursday. “Along the way, I have made many powerful enemies. I am entitled to a FULL presumption of innocence and am confident that justice will be done once ALL of the facts are known.”

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The charges are the latest major blow to a career that took off last year when Avenatti represented Daniels in her lawsuit to break a confidentiality agreement with Trump to stay quiet about an affair they allegedly had.

Avenatti became one of Trump's leading adversaries, attacking him on cable news programs and Twitter. At one point, Avenatti even considered challenging Trump for the White House in 2020.

But back home, his business practices had come under scrutiny from the IRS and a former law partner who was owed $14 million by Avenatti and the Eagan Avenatti firm, which filed for bankruptcy.

And now the tables have turned in part on Twitter, with Avenatti getting ripped by the same figures he has gone after, like Donald Trump Jr.

“Good news for my friend @MichaelAvenatti, if you plead fast enough, you might just get to share a cell with Michael Cohen!” the president’s son quipped in late March following the emergence of the Avenatti-Nike allegations.

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The new indictment also says Avenatti made false statements in bankruptcy proceedings by submitting forms under penalty of perjury that under reported income his firm received.

The most glaring example of deception and fraud was described in the indictment as scheming Avenatti allegedly did to deprive clients of money they were due from legal settlements or sales of stock and the actions he took to cover his tracks.

In a case involving one client, Avenatti allegedly funneled a $2.75 million settlement into his bank accounts and spent $2.5 million on a private airplane, the indictment said.

Although Avenatti was due a portion of settlement funds for his work, the charges said he paid only a fraction of the money clients were due in some cases and strung them along while they waited to be paid.

Avenatti allegedly drained a $4 million settlement he negotiated in 2015 on behalf of Geoffrey Johnson, who was paralyzed after trying to kill himself in the Los Angeles County jail, the indictment said. Johnson was referred to as "Client 1" in the indictment, but was named at a recent court hearing involving the money Avenatti was ordered to pay his former partner.

Until last month, Avenatti had only provided $124,000 over 69 payments to Johnson, the indictment said.

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Two years after the settlement was reached, Avenatti allegedly helped Johnson find a real estate agent to buy a house. But when Johnson was in escrow to purchase the property, Avenatti falsely said he had not received the settlement funds, the indictment said.

In November, when the U.S. Social Security Administration requested information to determine if Johnson should continue to receive disability benefits, Avenatti said he would respond, but didn't because he knew it could lead to the discovery of his embezzlement, the indictment said. The failure to respond led to Johnson's disability benefits being cut off in February.

The Associated Press contributed to this report.

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