Patterico's Pontifications


Federal Grand Jury Indicts Attorney Michael Avenatti Today

Filed under: General — Dana @ 3:33 pm

[guest post by Dana]

Michael Avenatti was indicted in Manhattan today:

Embattled lawyer Michael Avenatti has been charged with fraud and aggravated identity theft for allegedly snatching a total of $300,000 from Stormy Daniels and spending it on personal expenses like airfare, hotels, and restaurant delivery, and to bankroll his law firm.

Federal prosecutors in New York announced the latest charges against the Newport Beach litigator soon after ABC News reported Avenatti was expected to be charged with additional financial crimes. The 48-year-old lawyer faces a slew of charges on both coasts, including wire fraud, bank fraud, and extortion.

On Wednesday, a grand jury also indicted Avenatti for trying to extort the footwear giant Nike to the tune of $25 million, and the Daniels charges are separate from that case.

“Michael Avenatti abused and violated the core duty of an attorney—the duty to his client,” Manhattan U.S. Attorney Geoffrey S. Berman said in a statement. “As alleged, he used his position of trust to steal an advance on the client’s book deal. As alleged, he blatantly lied to and stole from his client to maintain his extravagant lifestyle, including to pay for, among other things, a monthly car payment on a Ferrari. Far from zealously representing his client, Avenatti, as alleged, instead engaged in outright deception and theft, victimizing rather than advocating for his client.”

Federal prosecutors brought yet another set of charges against celebrity lawyer Michael Avenatti on Wednesday, this time alleging that he skimmed nearly $300,000 from Stormy Daniels, the adult actress he represented in a case against President Donald Trump.

Prosecutors in New York charged that Avenatti sent a fraudulent and unauthorized letter purporting to contain Daniels’ signature to her book agent instructing the agent to send payments to his bank account rather than to her.

The indictment, revealed on Wednesday afternoon, leaves Avenatti facing three sets of federal charges in two states. Prosecutors have also accused him of trying to extort money from shoemaker Nike and of stealing from clients in Los Angeles.

Popehat has an entertainingly informative overview of the charges and what Avenatti faces:

So SDNY indicted Avenatti in two separate indictments — one on the let’s-extort-Nike-and-Boies-Shiller-I-see-no-way-this-could-go-wrong gambol, and one for defrauding Stormy Daniels. That makes him the defendant in three simultaneous federal indictments, no mean feat.

Nobody else got indicted in either case for now, which is something that was being carefully watched by the sort of people who carefully watch this sort of thing.

However, the un-indicted co-conspirator, whose identity is widely known, remains described prominently in Avenatti’s indictment, remains in the zone of danger, and is currently in a condition commonly known as damp-pantsed.

In the Nike indictment, Avenatti is charged with conspiracy to transmit interstate communications to extort, conspiracy to extort, transmitting interstate extortionate communications, and extortion. But really with flying too close to the sun.

Some of Michael Avenatti’s tweets figure in his Nike indictment, characterized as part of the scheme, because of course they are.

Meanwhile, in the separate THIRD indictment faced by the man who called me and told me I would never amount to anything, Avenatti is accused of stealing some of Stormy Daniels’ (or “Victim-1″) advance on a book contract.

The third indictment alleges Avenatti used Stormy’s money to pay payroll for his firm, for his coffee business, for “insurance, hotels, car services, restaurant and meal delivery,” and for — wait for it — wait for it —-

— $1,900 to “Client-2″ in Los Angeles, who is almost certainly the client Avenatti is charged here in Los Angeles with ripping off. In other words, it appears the indictment charges that Avenatti stole money from Daniels to make lulling payments to a different victim.

This is EXACTLY why you need a good accountant.

The third indictment — the one about Stormy Daniels, not to be confused with the federal indictment about trying to extort Nike or the one about protracted tax dipshittery — describes Avenatti’s lulling communications to Stormy Daniels in detail.

When Daniels asked unjustifiably politely where her book advance was Avenatti responded in a very brief, unsatisfactory, and perfunctory fashion, which no doubt [REMAINDER OF JOKE DELETED]

Anywho, in Federal Criminal Indictment 3/3 Avenatti’s charged with wire fraud and aggravated identify theft, but very unusually, not with conspiracy, possibly because there was literally nobody else in the world stupid enough to try this

Indictments are accusations by a government that responsible people should not trust or take at face value, and which should be vigorously tested by capable advocates, before neutral judges and juries who do not favor one side over the other, and also I should get a pony.

That said, like the SDCA indictment, the SDNY indictments lay out the receipts in a manner that suggest a case that will be extremely difficult to defend. Brah’s in trouble deep.

Avenatti continues to claim he is innocent of all charges and says he expects to be exonerated.

I want to take a minute to remember how the media lapped up all things Avenatti. The adoration was fueled by the wishful hope that the lawyer was the one anointed who would take down President Trump. Oddly, in as much as media outlets helped get President Trump elected by the fawning over him and providing him with far more airtime than any of other candidates, so too did the media help “create” the “folk hero” Avenatti and elevate him to ridiculous levels. Even going so far as to embarrassingly gush about his sartorial choices and alleged sex appeal. That the media helped push Avenatti into the public eye is reinforced also by a report that determined that the self-promoting lawyer was on television 254 times in the span of one year. Also, David Rutz of the Washington Free Beacon calculated that Aveantti “earned roughly $175 million in free media.” Congratulations, media, yet again.

This is my favorite cringe-worthy example of the media idol worship of Avenatti: Idiotic fangirls, CNN commentator Ana Navarro and The View’s Joy Behar deifying the cheap grifter. Clearly their hatred of Trump sucked away any semblance of discernment and rational thought (giving them the benefit of the doubt for having some in the first place):

“Lately, to me, you’re like the Holy Spirit. You are all places at all times. Right. I mean, I do — I see you all over cable news, I see — there’s a seat available if you want to be a co-host at ‘The View.’ There’s people here you can pitch. He’d be a great lady around the table” Navarro ranted.

“[Avenatti] has a bigger calling here. Being a lawyer is minimal compared to what he’s doing,” Joy Behar said.

Navarro interrupted, “The priesthood?”

Behar continued, “He’s out there saving the country.”


57 Responses to “Federal Grand Jury Indicts Attorney Michael Avenatti Today”

  1. It’s mind boggling.

    Dana (779465)

  2. For some reason, out of all the things he’s done, stealing from Stormy bothers me the most. More than stealing from the paraplegic.

    nk (dbc370)

  3. I wonder why, nk?

    It’s hard for me to fathom anyone bing taken in by such an obvious sleaze.

    Dana (779465)

  4. It’s the finishing touch that he was a pimp and not a lawyer, I suppose. Her case is what made him a celebrity; he was more or less a non-entity in the Cohen suits; he exposed her to a $293,000 liability for Trump’s attorneys’ fees in the Trump lawsuit; and then to steal $300,000 from her on top of it? Shaking my head.

    nk (dbc370)

  5. I mean that girl makes her money, for the most part, a dollar at a time. And he stole from her so he could drive a Ferrari. Evil.

    nk (dbc370)

  6. Her case is what made him a celebrity; he was more or less a non-entity in the Cohen suits; he exposed her to a $293,000 liability for Trump’s attorneys’ fees in the Trump lawsuit; and then to steal $300,000 from her on top of it? Shaking my head.

    While I hate to blame the victim, part of me wants to say it’s really her own fault for trusting a member of such a disreputable profession.

    Dave (1bb933)

  7. I mean coffee-shop owners, of course.

    Dave (1bb933)

  8. They’re monsters. You do know that every time you have a cup of coffee, you’re drinking some poor tree’s children?

    nk (dbc370)

  9. Roasted.

    nk (dbc370)

  10. And ground up.

    nk (dbc370)

  11. Avenatti is a sleaze, but when he appeared on CNN or MSNBC, he was not the biggest sleaze on the set.

    Gary Hoffman (7ec1de)

  12. > deifying the cheap grifter

    there’s a lot of that going around.

    in this case, speaking for myself:

    (a) ever since i first heard of him, i’ve considered Avenatti to be sleazy, and believed that he was only in the public eye because of Trump — he’s the lawyer for someone Trump keeps company with, and the fact that the public is plagued with Avenatti’s presence is a side effect of the fact that we’re plagued with Trump’s presence.

    (b) the brief bubble of an Avenatti presidential run was always insane.

    (c) dude stole huge amounts of money from his clients. he belongs in jail, and he should be disbarred.

    aphrael (e0cdc9)

  13. Ditto, aphrael.

    I can’t gdt the video of Navarro, Behar and Avenatti to embed, but make sure to click the link and watch it. Seeing the false humility ooze out of Avenatti’s every pore in the face of such swooning is the biggest tell of all that he is a disgusting sleaze. That those two imbeciles didn’t even recognize it for what it was spoke volumes about their blind partisan irrelevance.

    Dana (779465)

  14. Here’s the SDNY press release, which in turn links the two new indictments.

    I wonder if the extortion counts were filed separately from the client embezzlement counts with the anticipate the the extortion counts will be dismissed on the basis of a pretrial defense motion; I think it absolutely, positively should be dismissed, and that it’s a terribly unwise attempt to misapply a federal extortion statute which has been repeatedly held inapplicable to lawyers conducting settlement negotiations. Boo, hiss on the SDNY for this; boo, hiss on them for letting David Boies’ firm hijack their prosecutorial discretion.

    The other counts against him are more than adequate to put him away for however many years the feds want to put him away for, and of course his license is toast. His misconduct is absolutely garden-variety — I could flip through back issues of the Texas Bar Journal, amidst the reports of disbarments for mishandling client funds, and find dozens of much bigger crimes as measured either by gross dollar value or client worthiness for redress. He’s entitled to and will get due process, including appeals. But the extortion case, he should win. It is a spectacular mistake to criminalize the process of civil settlement negotiation, the very worst and most pernicious of slippery slopes.

    Beldar (fa637a)

  15. Meant to write, “with the anticipation that the extortion counts will be dismissed,” sorry for the disjointed language.

    Beldar (fa637a)

  16. If that’s so, Beldar, did SDNY think it was somehow advantageous to do that with the extortion counts?

    Dana (779465)

  17. I can’t really explain with any confidence why SDNY put this into two different indictments filed on the same day. But certainly, the extortion-related counts are going to drawn the same motion to dismiss whether they’re combined with unrelated crimes of not. My guess — and it’s exactly that, a guess, pure speculation — is that they used two separate indictments to ensure that they can immediately appeal to the Second Circuit if the extortion counts are indeed dismissed. Otherwise, they’d have to ask the judge to sever the just-dismissed extortion counts so they could have a final, appealable order; and severance is a matter of discretion, meaning if the judge denies it, they’re stuck waiting to appeal the dismissal until after the embezzlement crimes are resolved.

    Perhaps other of our lawyer commenters with more federal criminal procedure experience than I have can see some justification I’ve missed.

    Beldar (fa637a)

  18. Another, far less charitable speculation:

    They’re judge shopping.

    Beldar (fa637a)

  19. I do not speak with federal criminal procedure experience by any means, but I see it as kind of a favor to Avenatti. We already have him in the Nike case asking six or seven times as much for himself as he is asking for his client; on top of that do we want the jury to hear that he stole a “poor unfortunate girl’s” money, possibly the only money she ever earned through moral means?

    nk (dbc370)

  20. Maybe different prosecutors were working on the different cases.

    Sammy Finkelman (385c0e)

  21. Avenatti and Daniels feathered their beds together and one of them got a quill in an inconvenient, but predictable place

    steveg (354706)

  22. There is no commonality in the two cases. That I can see. Not of evidence, not of witnesses, not of victim, not of the elements of the crime. Just one sleazeball.

    nk (dbc370)

  23. The big crimes by lawyers are committed in plain sight, typically with the blessing of the court. This guy stole money from a stripper to make his Ferrari payment. The plaintiffs’ lawyers I dealt with every day when I was a BigLaw defense lawyer would have chuckled and said, “Bless his heart.” I knew three of them in Beaumont who had Gulfstream IIs. Not timeshare; not leased. Bought with cash, kept on call 24/7/365 (Beaumont being a place many people enjoy getting away from in a hurry).

    Beldar (fa637a)

  24. — Is he a criminal lawyer?
    — Yes. Very.

    nk (dbc370)

  25. Today, in courtroom #1, the brilliant legal mastermind, Michael Avennati, who directed an interstate conspiracy to just plain outfox Boies Schiller and Nike.

    Also today, in courtroom #2, a guy so clueless he can’t manage to paper over the records showing that he’s robbed client Peter to pay client Paul.

    Yeah, there’s no commonality in the two cases, even as to the defendant.

    Beldar (fa637a)

  26. I know I won’t change your mind on the Nike charges, Beldar, but, just hypothetically speaking, what if the government proved beyond a reasonable doubt that there was zero, zip, zilch, nada, not a chinchilla (sic), of a legal case against Nike and Avenatti’s only genuine threat was the adverse publicity that would lower the value of Nike’s stock?

    nk (dbc370)

  27. Still not extortion. Just another crazy lawyer making a crazy demand. If his case had zero, zip, zilch, nada to it, then take him to court and win there. I suspect in fact that’s closer to the truth than the opposite — that is, that his “case” was utter BS — and that Avenatti was simply trying to cash in on his political celebrity. All the more reason to shove it down his throat in a civil courtroom. Getting the feds involved in this is the worst possible solution.

    Boies, quoted in an article in Above the Law in December 2015 entitled Associate Bonus Watch: Boies Schiller Pays Up To $350K (Again): Bonuses at Boies Schiller aren’t quite as big this year, but the average bonus still falls just shy of $100,000:

    [David Lat:] It’s a lot harder to be disappointed by bonuses not going up, however, when your bonuses go as high as $350,000 — which brings us to the bonuses of Boies Schiller & Flexner, the litigation powerhouse founded by the legendary David Boies. The BSF bonuses were announced and paid out yesterday.

    Earlier this afternoon, I had my annual chat with David Boies about his firm’s bonuses. Here’s a lightly edited and condensed write-up of our conversation (which assumes basic familiarity with Boies Schiller & Flexner’s unusual compensation system, in which associates essentially share in the revenue they generate).


    [David Boies:] Part of what you’re seeing in these bonuses, which are on the whole comparable to what we’ve paid before, is that we had very substantial contingency-fee collections this year. To the extent that they generated premiums, which they did, that elevated the bonuses.


    Part of what you’re seeing in these bonuses, which are on the whole comparable to what we’ve paid before, is that we had very substantial contingency-fee collections this year. To the extent that they generated premiums, which they did, that elevated the bonuses.

    For example, we had antitrust cases involving LCD and CRT technology, handled by two different groups. There were very large collections in the LCD cases, which are farther along, and some collections in the CRT cases. In addition, we have been representing plaintiffs who were victims of the feeder funds in the Madoff Ponzi scheme, and those cases were finally resolved this year — not all of that money is coming this year, some of it will come in early next year, but that was another contributor. We resolved our case against the Bank of China, and we resolved the Arizona Iced Tea case. So all of this contributed to keeping bonuses high, even though the workload went down.

    I assess the likelihood that no Boies Schiller lawyer ever made refererence during the settlement negotiations to the possible negative impact from those cases on the publicly traded share price of the target defendants is effectively zero. If I were the public defender representing Avennati, I’d be on the phone to the lawyers for Bank of China, Arizona Iced Tea, etc., to see if they’d like to get the satisfaction of pointing out how black the pot is which has been criticizing the kettle.

    Beldar (fa637a)

  28. I love lawyer jokes more than I love dumb blonde jokes, and I really love dumb blonde jokes.

    How do you know that a blonde used a computer to write a letter? When there’s white out on the monitor screen.

    Why do blondes smile during lightning storms? They think someone is trying to take their picture.

    Two blondes walked into a bar. The brunette ducked her head.

    Ha ha ha ha ha

    Why did Los Angeles get all the celebrity lawyers and New Jersey got all the toxic waste dumps? New Jersey had first choice.

    What does a lawyer have in common with a sperm cell? They both have a one in a million chance of becoming a human being.

    Why do lawyers argue suits? They don’t know a tailor.

    Two lawyers walk into a bar. They failed the exam, because they forgot to order drinks.

    Incidentally, when I attended UT Austin, the observatory at the top of the Tower was closed. Why? Well, it wasn’t because Charles Whitman had used it as a sniper post and killed a lot of people–this guy was shooting pedestrians on the sidewalks of Congress Ave. half a mile a way. Guys in pickup trucks were pulling over on the highway, taking rifles off of racks and shooting back! It was one of the most traumatic events in Texas history, but even that did not close the observatory. No, it was closed, and remained closed for twenty years, because five law students had used it to jump to their deaths over a week, because they failed the bar exam.

    Are you kidding me? A mad assassin–Whitman, who was a trained Marine sniper, suffered from a brain tumor; he killed his mother and his wife, then climbed to the top of the Tower and started shooting and killing people–did not close the observatory. Five failed law students did, by suicide.

    That does not make any sense. I mean, which is a greater threat to innocent students and civilians? A deranged man or suicidal law students? Charles Whitman shot and killed dozens; these law students only killed themselves. But their suicides, not his homicidal rage, closed the observatory.

    What confounds me is that in Texas, you don’t need a college degree or a law degree to become a licensed attorney. All you have to do is pass the bar exam. That’s it. Any graduate fresh out of high school simply needs to go to a law library, read some books, learn the vernacular, study rules of order and procedure, sit in the gallery for a couple of trials and observe, then take the bar exam. If he or she passes, that’s it. Bang! He or she is licensed to practice law in the state of Texas.

    I could pass the bar exam tomorrow. Well, maybe not tomorrow, but give me six weeks to study, and I could easily be a licensed attorney. What is the bar exam to me? I passed the ACT and the SAT to get into college; I passed the GRE to get into graduate school; I passed the TREC exams for my realtor’s license, and that involved coursework in case studies of real estate, contract, and business law, marketing and advertising, principles and ethics. I might as well had gone to law school. So, yeah, I can pass the bar exam. It’s actually harder to become a realtor than it is to become a lawyer in Texas. The Real Estate Commission has requirements that the Bar Association does not. Right now, the only things a lawyer can do that I cannot are write a contract and represent someone other than myself in court.

    I can pass the bar exam, no problem. The thing is, if I took the exam and failed, I wouldn’t jump off a building and kill myself. That would be stupid. And I am not that stupid.

    Gawain's Ghost (b25cd1)

  29. What confounds me is that in Texas, you don’t need a college degree or a law degree to become a licensed attorney. All you have to do is pass the bar exam. That’s it.

    You sure about that?

    And I am not that stupid.

    God bless you.

    nk (dbc370)

  30. When I read thise quotes on Avanetti, I realize that the will to believe in something is not dead. It’s just incredibly misdirected. Sounds like there’s an opening for Christianity or something.

    Appalled (d07ae6)

  31. I assess the likelihood that no Boies Schiller lawyer ever made refererence during the settlement negotiations to the possible negative impact from those cases on the publicly traded share price of the target defendants is effectively zero. If I were the public defender representing Avennati, I’d be on the phone to the lawyers for Bank of China, Arizona Iced Tea, etc., to see if they’d like to get the satisfaction of pointing out how black the pot is which has been criticizing the kettle.

    Most of the analysis I’ve followed on this has been by Ken White on KCRW All the President’s lawyers. The point he made, that I found compelling is that Avanatti was negotiating to get money directly for his firm, and admitted on tape that hiring his firm to do ‘training’ was the sticking point, not the settlement for his client. So if I understand it correctly

    Brutal negotiations to get money for the client is OK, even if i expect them to give a lot of money to me.

    Brutal negotiations to get money for the lawyers directly is questionable. The key thing being a pretext that it’s in the best interest of the client.

    Brutal negotiations to get money for the lawyer and NOT the client is NOK, especially if there’s no pretext that it’s in the best interest of the client.

    So if the prosecutor proves that he wasn’t acting in the interest of the client Avanatti should be convicted. Otherwise he’s just being a lawyer.

    Beldar, can I ask if you think I’ve misunderstood this? Or do you disagree with this analysis?

    Also, since lawyer hate is strong in this thread I’ll say that most of the time I’ve worked with lawyers I’ve found them to be ethical and helpful and the exceptions aren’t any more common than with other professionals.

    Time123 (b53270)

  32. The California Bar has evidently not opened up its own inquiry to see if Avenatti ought to be suspended. They seem content to trail in the wake of the feds.

    The continuing ability of Avenatti to enter courtrooms as a lawyer seems quite odd. I know he can claim criminal matter pending, but the Bar does not have to await a conviction does it, if they consider a lawyer a risk to clients? Obviously we don’t know all the facts, but couldn’t the Bar convene some proceeding and look at what the Feds have developed?

    Harcourt Fenton Mudd (6b1442)

  33. The continuing ability of Avenatti to enter courtrooms as a lawyer seems quite odd. I know he can claim criminal matter pending, but the Bar does not have to await a conviction does it, if they consider a lawyer a risk to clients? Obviously we don’t know all the facts, but couldn’t the Bar convene some proceeding and look at what the Feds have developed?

    I don’t think Avenatti could reasonably be expected to participate in such a proceeding while he’s under criminal indictment.

    Can’t Avenatti’s clients, or potential clients, form their own judgments about whether they want him representing them?

    It sounds like more or all of his recent clients are state’s evidence already, and I’m guessing he’s not getting a lot of new business these days…

    Dave (1bb933)

  34. *most or all

    Dave (1bb933)

  35. Stealing money from Stormy Daniels is one thing. Yes, she’s female, but she’s a big girl and not exactly a totally sympathetic character.

    But Avenatti is accused of something even worse out here in Los Angeles (at least if the Los Angeles Times story is accurate—the over under probability on that is quite low). He supposedly negotiated and received a several hundred thousand dollar settlement for a paraplegic client. He concealed the fact that he’d received the settlement payment from his client–and doled it out at the rate of $1,900 a month. Stealing from a paralyzed client is just one step above stealing the pennies from a dead man’s eyes.

    Skeptical Voter (9d65cd)

  36. @ nk Yeah, I am absolutely certain that all one has to do to become a licensed attorney in Texas is to pass the bar exam. No college degree, no law degree, no coursework of any kind is required.

    @Time123 I don’t hate lawyers. I happen to have known and worked with several hundred over the years. I will agree that most of them were honest and ethical, as much as any other professional.

    But it’s an old saying. Everybody hates lawyers, until they need one. Still, it is a fact that a good lawyer is hard to find, and does cost money. It’s just that I haven’t met very many that I respect. Most of them are more stupid than they are smart. And I can pass the bar exam.

    But here’s a funny story that my mother tells all the time. A lawyer named Crook sold his house on a street named Justice to a buyer named Law. That really, actually happened. She hasn’t stopped laughing about it ever since.

    So a law license to me is just a joke.

    Gawain's Ghost (b25cd1)

  37. Innocent until proven guilty.

    Turning to sports, today’s scores in The Patriot Games:

    Rule of Men – 2,001 [a chastened odyssey]
    Rule of Law – 0

    Up next, Stormy news and Melania with the weather…

    DCSCA (797bc0)

  38. The Texas Board of Examiners who administer the bar exam seem to disagree:

    Can I sit for the Texas Bar Examination if I have not yet received my J.D. degree?
    Yes. In order to sit for the Texas Bar Examination, you must simply meet the law study requirement in Rule 3, which states that you must have received a J.D. degree from an ABA-approved law school, or be within 4 semester hours (or 6 quarter hours) of your degree. Your law school must certify that you meet the law study requirement by submitting proof directly to our office. Texas law schools will typically verify their students’ status before we issue admission tickets. You should remain in contact with your law school to ensure that your law school will be able to submit this certification to the Board by the appropriate time in order for you to be eligible to receive an admission ticket for the exam that you applied for.

    So while, indeed, you need not have completed the degree, you must be enrolled and nearly finished.

    Dave (36d848)

  39. meanwhile the Smollett sham will be revealed,

    narciso (d1f714)

  40. @ Gawain’s Ghost (#36): I laughed at your mom’s joke, and you’re certainly entitled to your opinion as to the value of a law license. You’re absolutely wrong, though, about what it takes to get one in Texas.

    I know this, having been through the process in 1980 myself, and my oldest son having gone through it in 2016. The vetting process is very rigorous indeed, requiring applicants to first make a series of declarations during their first year of law school on such subjects as their unpaid back taxes and child support, mental illness, expulsions, etc. — which in fact the Board (subsidized by the application fees) does indeed check, and then double-check.

    Unlike California, which permits graduates of non-ABA accredited law schools to take their bar exam (resulting in a booming industry in CA for non-accredited law schools and, consistent therewith, the lowest bar passage rate year-in and year out), or Wisconsin (whose graduates can skip the bar exam if they graduated from an in-state law school), Texas has no real shortcuts.

    In the summer of 1978, when I was clerking for an Austin firm between my first and second year of law school, the firm undertook an emergency pro bono case. Our client had just graduated in May, and was already approved to take the July 1978 bar exam.

    On the Friday before the exam (which was to begin on the following Tuesday), he received a hand-delivered letter from the Board of Law Examiners demanding that he appear on Monday morning at 9:00 a.m., “then and there to show cause” why he should be allowed to take the Texas bar, given that he had a federal conviction from the late 1960s for interstate trafficking in a prohibited substance (LSD tabs). Our client brought with him to our initial interview, though, his original Declaration of Intent to Study Law, which he had filed as a 1L at Texas Law, which fully disclosed this conviction — including in connection therewith the subsequent vacating and expunction of that conviction pursuant to the Federal Youth Corrections Act, which Congress intended to give kids like him who’d made one terrible mistake a second chance after a prescribed series of steps to ensure their rehabilitation, treatment, and return to the straight and narrow. Under the Act and interpretive caselaw, our client would have been entitled to deny ever being convicted of this crime. But instead our client had gone over this all with the Travis County committee of bar officials reviewing his Declaration of Intent as a 1L, which committee members had written him letters agreeing that he was a model example of someone genuinely reformed.

    Armed with precedent which said that the Federal Youth Corrections Act expunctions were even stronger than a presidential pardon, we prepared a lawsuit against the bar for filing in federal court, seeking a temporary restraining order to compel the Bar to let him sit for the exam as scheduled, with extensive briefing and documents included. And at 7:00 a.m, we duly faxed the whole bundle (yes, that’s how we did things in 1978) to the Texas AG’s office, whose duties include defending the Bar, and giving them notice as well of the emergency TRO hearing we had already scheduled for 9:00 a.m. that same morning. (We told them that our client, on our advice, was refusing outright to comply with the Board of Law Examiner’s show cause order, which is the legal equivalent of slapping the other side’s lawyers with a steel gauntlet.

    We invited them to phone us before 8:30 a.m. if they wanted to do the right thing — capitulate instantly, in writing! — before our complaint became part of the public record, and before the judge had read it.

    At about 7:45 a.m., we got a very sheepish phone call from a very senior lawyer in the Texas AG’s office, saying: “The Board of Legal Examiners just screwed up, big-time. The guys who were doing the ‘update’ on everyone sitting for this exam just didn’t think to check to find out whether this had already been disclosed, and resolved in your client’s favor. It’s all been a terrible mistake, and we’re taking steps to ensure that this never happens again to anyone else. We’ll fax you a letter by 9:00 a.m. confirming that your client can sit for the exam tomorrow, and although we can’t give your client the written apology he deserves from the State Bar of Texas because, well, we just don’t apologize, I’m giving you my and my staff’s personal apologies, which I hope you’ll pass along to your client, along with our best wishes for his success on the exam.”

    Our guy duly took the bar exam (it was a two-day process then), and passed it.

    It was a righteous piece of pro bono work, and the research I did for it came in equally handy on a later case I worked on, a multi-billion tender offer, when our opponents learned that one of the principals in acquisition group (who had to make similar disclosures under the federal securities laws, specifically the Williams Act) had a similar conviction for LSD transportation and delivery lurking in his past. They sprang this news simultaneously at four different depositions taking place in three different cities across the country, and they were obviously very proud of themselves: They thought they’d just found the material misrepresentation they’d need to get an injunction shutting down our clients’ tender offer. But like the Bar in the earlier case, they never thought to find out whether the conviction had ever been expunged under the YCA; that was in fact my first question when I confronted the member of our client group with this ugly history, and I was able to plaster their faces with a massive plate of metaphorical eggs. Good times, good times.

    Beldar (fa637a)

  41. GG, I also don’t doubt that you could probably pass the Texas Bar. But only if you’d been to law school first. If you think you could, here are selections questions and answers from the last several exams. If you’re right, you surely should be able to answer most of these questions correctly, without Google and without looking at the answer key.

    Here’s an essay question from the July 2016 bar exam, which my son took and passed:

    Question 7

    Hugh and Nancy announced their intention to marry. Before the wedding, Nancy’s mother threw a bridal shower for Nancy and gave Nancy a new car as a wedding gift. On their first anniversary, Hugh gave Nancy an expensive necklace. The next day, Hugh was in a car accident and suffered severe injuries. After some litigation, the case against the other driver was settled. The settlement agreement provided specific amounts for Hugh’s pain and suffering, Hugh’s lost wages, Hugh’s medical expenses, and Nancy’s loss of consortium. The settlement money was deposited into a new joint checking account opened by Hugh and Nancy. The medical expenses were paid from the account, but no other money has been deposited into or withdrawn from the account, and no interest has been earned.

    Five years after the accident, Hugh filed for divorce. Hugh’s salary at the time of the divorce filing was $100,000 per year. Nancy was not employed outside the home and had no special training or earning ability.

    Nancy filed a counter-petition for divorce, seeking a disproportionate division of property and spousal maintenance.

    (1) Describe Hugh’s and Nancy’s community and/or separate property interests in the following property:

    (a) The car;

    (b) The necklace; and

    (c) The settlement money.

    (2) Is Nancy entitled to an award of spousal maintenance for any period after the divorce?
    Explain fully.

    Care to take a stab? Be sure to explain fully.

    Beldar (fa637a)

  42. Great story, although was it really impossible for the guy to just call up the Board of Examiners and explain the facts to them without involving law firms, the attorney general’s office, TRO’s and hapless summer interns? I mean, at least, he could have tried that and THEN lawyered up if they wouldn’t correct their mistake.

    When you’re a hammer, everything looks like a nail, I suppose…

    Dave (1bb933)

  43. “The besta defense is a gooda offense.” — Vito “Cool Lips” Chericola, Chicago’s Mafia Boss (fictional)

    nk (dbc370)

  44. Dave, if he’d called on his own, no one would have taken his call — certainly not before the exam on the following Tuesday, much less the show-cause hearing that the BLE had arbitrarily scheduled for the day before the exam.

    Yes, he might have gotten it straightened out on his own, but best case, he’d have been cooling his jets until the exam was offered again in February.

    I was fortunate enough to be working the what was, then and now, widely recognized as one of the three best law firms in Austin. (The big Houston and Dallas firms had offices in Austin then, but they were only for lobbying and legislative work.)

    One reason you “lawyer up” is the credibility that brings you, so that people from the AG’s office will call you back before 9:00 a.m. on a Monday. (Our fax machine was still running, transmitting page one-hundred something of our exhibits volume, when they phoned us; they hadn’t even read the whole thing.)

    If our client had not come to us immediately, we would not have been able to prepare the hammer that we did indeed have to brandish, but not use. I worked 18 hours on Saturday, another 12 or 14 hours on Sunday, so we’d be ready on Monday morning. To think otherwise is, with due and very genuine respect, even affection, Dave, extremely naive — “famous last words” of more people than I can possible count.

    I repeat, it was a righteous piece of work, and I’m still proud of it more than four decades later.

    Beldar (fa637a)

  45. Thanks Beldar :)

    Dave (1bb933)

  46. Also, Dave: No one at the Texas AG’s office knew anything about the Federal Youth Corrections Act before we told them about it. They handle appeals from state-court drug convictions day-in and day-out, but this was a federal conviction, vacated and expunged under a federal statute, that was likely to be equally unknown to anyone over at the Board of Law Examiners (whose focus, understandably, is also on Texas law). We had to teach them the law, show them our proof, and convince them that we were about to rip them a new nether orifice, or we would not have gotten the result we wanted. Overwhelming firepower — being brandished, for we deliberately gave them the out we knew they ought to take — was exactly what was called for, and nothing less.

    Beldar (fa637a)

  47. Calbar’s Lawyer search shows Avenatti as Active, no disciplinary actions. It might only mean that in California a formal complaint is not made public until a certain time period after service on the attorney.

    Illinois has a similar rule. Investigations that do not result in a formal complaint are never made public.

    nk (dbc370)

  48. Illinois has an interim (summary) suspension rule for attorneys who convert client funds. I have seen it applied. It’s like denying bail to a defendant deemed to be a danger to the public, pending trial. I don’t know if California has one. If not, Avenatti might not lose his license for a long time yet.

    nk (dbc370)

  49. Dave 33:

    I always thought Bar people were a bit more solicitous of clients, and didn’t apply the view that clients should know not to hire a certain kind of lawyer. The issue being that a certain kind of lawyer should not be permitted to practice.

    From what I read, and simply assuming it might be true, clients were duped into believing that their settlements were still not paid while Avenatti was consuming them. It just seems like the Bar ought to do something other than wait for the feds to do their work.

    Can’t wait to read about the need for another dues increase for protecting the public.

    Harcourt Fenton Mudd (6b1442)

  50. @ nk (#47): I think you’re almost certainly right about Avenatti’s disciplinary proceedings still being confidential.

    It’s also possible — I know the Texas Bar does this sometimes with lawyers under public indictment — that they may put the complaints against him on a “side burner” (not the “back burner”) until the feds either have a guilty plea or a conviction against him in one or more of the three felony indictments against him: The proof of guilt beyond a reasonable doubt on every element of a crime — as evidenced by such a judgment of conviction (once final, meaning after any appeals are disposed of) — collaterally estops (issue preclusion, not claim preclusion, for the civ pro nerds among us) the defendant from ever denying the truth of those same facts. A conviction, in other words, turns what’s probably a pretty easy disbarment proceeding into an absolutely slam-dunk with no further evidence needed or even permitted.

    But yeah, his bar card(s) are toast.

    Beldar (fa637a)

  51. . It just seems like the Bar ought to do something other than wait for the feds to do their work.

    The Bar needs someone to complain to it about a lawyer. So until a client realizes they have been defrauded, or some other external event draws the Bar’s attention, the Bar won’t know there is a case it has to investigate.

    The alternative is to have the Bar vet every attorney client transaction.

    Kishnevi (43b9bd)

  52. Beldar @40:

    And at 7:00 a.m, we duly faxed the whole bundle (yes, that’s how we did things in 1978)

    They had a fax macine in 1978? This must have been a different, more expensive, fax machine than what became common in the late 1980s, really circa 1989. Ido remember reading they had some kind of fascimiles even in the 1860s.

    With a successful demonstration in front of Napolean in 1860, the Pantelegraph started operation between Paris and Lyon in 1865 and extended to Marseille in 1867 …

    …In 1964 Xerox Corporation introduced LDX (Long Distance Xerography), an invention that is considered the first “commercial” version of today’s fax machine.

    Xerox’s 1966 Magnafax Telecopier could be connected to any telephone line and could transmit a letter-sized document in six minutes.

    How fast was it in 1978?

    That point about needing to teach the Texas Board of Law Examiners the law, and about them paying atention to a letter from a law firm, especially a big law firm, is true; and the candidate for the bar also maybe wouldn’t have been so sure of the law himself without consulting them. Also good points: They had to turn around the Texas Board of Law Examiners on a dime, and it was also good to give them an incentive to back off quickly.

    Sammy Finkelman (db7fea)

  53. Michael Avenatti didn’t steal all of Stormy Daniels’ money.

    She ahd an agreement for an $899,000 book advance, to be delivwered in four installments.

    She got the first one, in July.

    For the second one he told the publisher to put it into another account, but they told him they couldn’t do it without her authorization, so he forged her signature.

    When it didn’t come and Stormy inquired, he paid her from funds that had just come in for another client.

    So he stole about $300,000 from her, but stole net about $150,000.

    Then he told the publisher to pay the third installent early so he could replace the money that belonged to anoter client (not that he intended to give that to the client)

    He told Stormy the publisher was late. When she finally contacted the publisher in February she found out what had happened, and shefired him in March.

    Presumably she got the 4th installment.

    Sammy Finkelman (db7fea)

  54. * $800,000 book advance, not $899,000 book advance. The money doesn’t seem to have been divided equally. And simce the book came out in Septemeber I don’t know that it’s all an advance.

    Svenatti’s defense is that, well, he didn’t bill her anything, and she paid him only $100, so he (msut be?) entitled to the money.

    Sammy Finkelman (db7fea)

  55. The California State Bar has taken the first step to disbar Michael Avenatti

    The State Bar of California filed to place attorney Michael Avenatti on involuntary inactive status on Monday.

    The move is the first step toward disbarment, said Teresa Ruano, program supervisor for the Office of Strategic Communications for the State Bar of California.

    And, of course:

    Avenatti responded to the State Bar’s action in a tweet on Monday.

    “The action by the CA State Bar is nothing more than a ‘pile-on’ and was entirely expected in light of the pending charges. I offered to cooperate with the Bar and instead they decided to issue a press release as a stunt. I look forward to being fully exonerated by the facts.”

    Dave (1bb933)

  56. I only read the story at the link, but it seems like an emergency temporary suspension, for the interim protection of the public, pending adjudication on the merits and final disposition. California lawyers, what does it look like to you?

    nk (dbc370)

  57. I always thought that Michael Avenatti wasn’t doing all these politically related things (freeing Stormy Daniels from her nondisclosure agreement, being on television, and the new Brett Kavanaugh accusers) on his own, but he must have been expecting a payoff from somebody, maybe in the form of legal business thrown his way.

    It looked to me like his intervention in the Brett Kavanaugh matter played so badly in public, or maybe it was his arrest for domestic violence so that (he, they) backed off, because they felt they would be linked to him . And whoever it was decided to quietly cut him off, and to let him be disgraced all alone. Without letting him know he’d been abandoned.

    Maybe they always intended to cut him off if something backfired, as the additional Brett Kavanaugh accusers did.

    Or maybe it could be that he was in much more financial distress than his backers knew (well, maybe they should have thought that somebody so dishonest politically might be dishonest – and careless – in other ways) and they didn’t have time to pay him off.

    At this point, I don’t really have a good guess as to what was going on, except I cannot feel that Michael Avenatti was acting on his own in his public activities.

    At least not till late in the game, with the Nike lawsuit.

    And I think his toying with a run for president was really at the instigation of other people. It never could be serious, and that wasn’t the best way to drum up legal business. But it was a way to grab attention to whatever he was going to say in the nature of politically motivated accusations. We never saw that play out because he quit so early.

    Or di we say he was thinking of becoming a political grifter?

    Sammy Finkelman (9974e8)

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