Feds portray Avenatti as con man; he calls charges 'bogus'

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The lawyer was arrested last month in NY for allegedly attempting to extort millions of dollars from Nike.

The federal complaint in California charges Avenatti with 10 counts of wire fraud, accusing him of misusing more than $12 million he received on behalf of clients following settlements and other negotiations.

US Atty Nick Hanna & the IRS are holding a news conference in Los Angeles at 9am Pacific time.

The Los Angeles Times reported Thursday morning that charges stem from Avenatti's dealings with multiple clients, including Geoffrey Ernest Johnson, who is mentally ill and a paraplegic.

The maximum possible punishment for these alleged offenses upon conviction, the report said, is 335 years in prison.

The lawyer is also accused of embezzling millions of dollars from other clients, using the money to purchase a private jet, finance his coffee business and pay for his own legal and personal expenses.

According to the indictment, Johnson's efforts to buy a house failed because Avenatti withheld the settlement money, and Avenatti lied to the U.S. Social Security Administration about the settlement to hide the embezzlement, leading the agency to cut off Johnson's benefits.

The indictment also said Avenatti lied to the IRS about his taxes.

Avenatti denied the charges on Twitter, saying he had made powerful enemies and would plead not guilty and fight the case.

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After prosecutors announced plans for Thursday's press conference, Avenatti tweeted that he remains "confident that justice will be done once ALL of the facts are known".

He added later: "Any claim that any monies due clients were mishandled is bogus nonsense".

In the case of the paraplegic client, for example, Avenatti, after having pocketed the client's $4 million settlement from a lawsuit against the county of Los Angeles, directed a small portion of what the client was owed, $124,000, to be paid to the client and made some payments to assisted living facilities to cover the client's rent, according to the indictment. Federal authorities seized the jet on Wednesday, prosecutors said.

The alleged crimes "are all linked to one another because money generated from one set of crimes appears in the other sets - typically in the form of payments to lull victims and to prevent Mr. Avenatti's financial house of cards from collapsing", said Hanna.

He was also charged with 19 tax counts, including lying to an Internal Revenue Service officer, not paying personal income taxes since 2010, failing to pay taxes for his businesses, including two law firms, and pocketing payroll taxes from the Tully's Coffee chain that he owned, the indictment said.

Avenatti also allegedly defrauded a bank in MS, submitting false tax returns to get three loans for over $4 million in 2014 for his law firm and a company he owns, Global Baristas US LLC.

As they say, a grand jury will indict a ham sandwich, so Avenatti still has the opportunity to tell his side of the story to a jury.

Following Avenatti's arrest last month, The Washington Post's Devlin Barrett and Elise Viebeck reported that it marked "the latest and most remarkable chapter in the odd public saga of the California lawyer".