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Michael Avenatti pleads not guilty to stealing $300,000 from actress Stormy Daniels

Posted at 2:20 PM, May 28, 2019

Celebrity attorney Michael Avenatti pleaded not guilty Tuesday in Manhattan federal court in a case in which he allegedly stole $300,000 from a former client, adult-film actress Stormy Daniels.

Avenatti faces a trio of appearances in federal court in the wake of two indictments against him last week.

A grand jury indicted Avenatti for two separate schemes: the Daniels-related case, in which he is charged with fraud and aggravated identity theft, and a second matter in which prosecutors say he attempted to extort more than $20 million from sportswear giant Nike.

He has denied the allegations and said he plans to plead not guilty in both cases. He surrendered to federal authorities early Tuesday morning, according to Assistant US Attorney Robert Sobelman, and was released on a bail package including a $300,000 personal recognizance bond.

Avenatti is accused of stealing a portion of Daniels' advance for her book contract, according to court papers, and using that money to pay employees of his law firm and a coffee business he owned. As part of the bail conditions set Tuesday, he is prohibited from contact with Daniels except in the presence of counsel.

Avenatti is also indicted in a case in California in which he is alleged to have defrauded five clients, and at one point Tuesday all three cases in which he is charged momentarily converged.

At a pretrial conference for the Daniels case after his arraignment in that matter Tuesday, an attorney for Avenatti in the Nike case, Scott Strebnick, asked US District Judge Deborah A. Batts to move to make a motion to transfer the Daniels case to California, arguing that "in effect this is a sixth client that the government alleges was defrauded in the same modus operandi."

The judge, however, nodded as Assistant US Attorney Matthew Podolsky told the court that the effort was "clearly for the sake of delay," and denied Strebnick's request.

As Avenatti left the courtroom, he told reporters he didn't have any further comment, then turned before entering the elevator to add: "Anybody know when the President and Don Jr. are going to be arraigned?"

Avenatti became a household name during his representation of Daniels, whose legal name is Stephanie Clifford, when prosecutors pursued a case last year against President Donald Trump's former personal attorney Michael Cohen.

Cohen pleaded guilty to multiple felonies, including having made an illegal campaign contribution by paying $130,000 during the 2016 election cycle to Daniels to silence her claim of an affair with Trump -- a payment prosecutors have said was made at Trump's direction. Trump has denied the affair, and Cohen is serving a three-year prison sentence.

In the case involving Nike, Avenatti is alleged to have told attorneys for the company that he would release what he said were allegations of misconduct by employees on the eve of both the company's quarterly earnings call and the start of the NCAA tournament.

Avenatti said he would disclose the allegations at a press conference, according to court papers, unless Nike made millions in payments to him and a co-conspirator by hiring them to conduct an "internal investigation."

He is due to be arraigned in that case later Tuesday afternoon.