A Federal Grand Jury in Santa Ana, California, indicted attorney Michael Avenatti on April 10 for embezzling almost $2.75 million from Miami Heat star center Hassan Whiteside, the Los Angeles Times reported.
Alexis Gardner, Whiteside’s former girlfriend, had hired Avenatti a few weeks earlier, as she looked to negotiate a $3 million settlement of a potential lawsuit against Whiteside, according to the Washington Post. The reason for the agreement between Whiteside and Gardner remains unknown.
Whiteside had transferred Avenatti $2.75 million in January 2017 to cover the majority of a $3 million settlement, according to court documents seen by the LA Times. Avenatti was entitled to keep just over $1 million in legal fees while leaving the rest for Gardner, but instead he told her the initial payment was entirely for attorney fees, and he would pay her in 96 monthly increments spread over the coming eight years, prosecutors say.
The indictment, obtained by the Washington Post, states that the attorney took $2.5 million to buy a share of a small HA-420 jet. The LA Times report does not say what happened with the remaining $250,000.
Initially, Avenatti told Gardner that Whiteside wasn’t making any payments at all. Later, Avenatti made 11 payments to Gardner, between March 2017 and June 2018, totaling $194,000, misrepresenting them as Whiteside’s monthly installments. Avenatti ceased the payments in June 2018, claiming that Whiteside “was not complying with the settlement agreement,” according to prosecutors.
In a mutual statement to the Los Angeles Times, Whiteside and Gardner said: “We entered into a mutually agreed upon settlement more than two years ago following the end of our relationship; a settlement that reflected Alexis’ investment of time and support over a number of years as Hassan pursued a career in the NBA.” It continues: “It is unfortunate that something that was meant to be kept private between us is now being publicly reported. We have both moved on amicably and wish nothing but the best for each other.”
Gardner is one of four clients that Avenatti stole money from, according to the 36-count federal indictment, in which the grand jury alleges that Avenatti embezzled about $4 million from another client, Michelle Phan, a makeup artist with 8.8 million YouTube followers.
Moreover, the high-profile lawyer is accused of stealing from a mentally ill and paraplegic man, Geoffrey Ernest Johnson, who won a $4-million settlement but received just $124,000 from Avenatti. He is also charged with dodging taxes, bank fraud, perjury, and bankruptcy fraud.
Indictment of Michael Avenatti by on Scribd
In a separate federal case in New York, Avenatti was indicted for an alleged attempt to extort for $20 million from Nike, the sportswear giant.
Avenatti said in a statement to the LA Times that “No monies were ever embezzled from anyone.” He continued, “I look forward to all of the relevant documents and facts being presented at trial.” He further added, “the clients complaining are a very small fraction of the thousands of clients I have serviced over my nearly 20-year career.”
Avenatti said on Twitter that he couldn’t wait to see the public revelation of the grounds why Whiteside paid the settlement and “the inquiry by the @NBA and its commissioner.”
According to the Los Angeles Times, If Avenatti will be found guilty and convicted on all charges, he would face a maximum of 382 years in prison.
