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Avenatti IRS problems added to Extortion and Embezzlement charges

Avenatti IRS problems added to Extortion and Embezzlement charges

His lavish lifestyle appears to have been a farce.

https://twitter.com/PeterHamby/status/1110942166535168000

Michael Avenatti’s problems are only getting worse. Recently dinged for extortion and embezzlement, now, the fame-lusting porn lawyer is tangoing with the IRS, who has been investigating Avenatti for a decade.

His lavish lifestyle appears to have been a farce.

Not only has he allegedly failed to pay taxes for the last ten years, but a side company he created was also allegedly ordered to withhold taxes from employee paychecks, while not surrendering the taxes to the IRS.

From the LA Times:

The nearly 200 pages of charging documents submitted by the Internal Revenue Service show that federal investigators started pursuing Avenatti for alleged tax violations a decade ago.

The first sign of trouble came in 2009 when, the IRS said, he reported $1.9 million in personal income but failed to pay $570,000 in taxes. The next year, the IRS said, Avenatti reported $1.2 million in income but skipped out on a $282,000 tax bill.

Since then, according to federal prosecutors, Avenatti has filed no personal income tax returns, even as he deposited $18 million into his bank accounts.

He also has filed no tax returns since then for Avenatti & Associates, a corporation that has recorded $38 million in deposits, the government says. Avenatti, who owns the firm, has often used it to pay personal expenses, including $176,500 to Exclusive Resorts, which bills itself as “the world’s elite private vacation club.”

“During these tax years, Avenatti generated substantial income and lived lavishly,” Remoun Karlous, an IRS criminal investigator, wrote in his sworn statement.

Among other big-ticket items: $217,000 at Neiman Marcus; $117,000 at Jewelers on Time, a luxury watch store; $277,236 to Porsche dealers; $100,000-a-month rent for a waterfront house on Lido Isle in Newport Beach; $39,762 in Ferrari lease payments; $123,825 in rent on his apartment in a luxury high-rise in Century City.

The government placed a $5-million lien on the company and started garnishing its bank accounts. Avenatti allegedly ordered subordinates to stop using those accounts and open new ones that would be out of the government’s reach.

At the same time Global Baristas was pocketing the taxes withheld from employees, his law firm, Eagan Avenatti, allegedly did the same.

In 2017, the firm filed for bankruptcy. After it emerged a year later, Avenatti vowed Eagan Avenatti would pay nearly $900,000 it owed in taxes. It did not.

And if that’s not enough drama for you, get a load of this:

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Comments

Have any of you gone to Kate at Small Dead Animals up in the Great White North? She shows some links in the comments to Canada’s Great Shiny Pony. (For the uninitiated – PM Justin Trudeau.) How he’s been sucked into this little story.

Good grief!! It’s creepy porn lawyers like Avenatti that give ALL creepy porn lawyers a bad name.

Lock him up now. I would consider him a flight risk. He must know he’s gonna do time. Even HE can’t believe his own tripe.

I am confused.

Is this the same Avenatti who is a Democrat Party all-star?

And, Trump is the reprobate who is going to jail?

I love counter-factual narratives in the sunlight.

Are these facts included in Avenatti’s “…the facts are on my side!” declaration? It doesn’t look like he even made an effort to disguise his tax dodging.

OleDirtyBarrister | March 28, 2019 at 12:00 pm

The facts that will make Avenatti’s tax problems worse are that he stole money from Tully’s and Eagan & Avenatti that was withheld from employees’ compensation as income tax withholdings, FICA, and OASDI. I have never seen the IRS and DOJ let that slide, it is a major red line crossing the feds do not forgive.

His tax avoidance appeared to escalate, according to the IRS, when Avenatti pursued a side business, buying Tully’s, a Seattle-based coffee chain, in 2013 for $9 million. By late 2015, Avenatti’s company, Global Baristas U.S., was withholding taxes from employee paychecks but — at his instruction — failing to send the money to the government, the IRS alleged.

Managers of the company told the IRS they were mortified; one called the move “unethical” and another said Avenatti’s “moral compass didn’t point north.

At the same time Global Baristas was pocketing the taxes withheld from employees, his law firm, Eagan Avenatti, allegedly did the same.

https://www.latimes.com/politics/la-na-pol-avenatti-california-tax-investigation-20190327-story.html

DouglasJBender | March 28, 2019 at 12:00 pm

Avennatti’s smug, lie-filled face alone should be enough to convict him.

OleDirtyBarrister | March 28, 2019 at 12:20 pm

I have to wonder if Avenatti was so delusional that he thought that his way out of all his financial and tax problems was to garner more publicity and elevate himself to a status of untouchable and unbeatable (by in part taking down a POTUS) and thereby negotiate his way out of his problems with the govt. As someone commented in the LA Times articles, one would ordinarily expect a person with but problems to keep a low profile and work his way out of them quietly.

Avenatti probably thought a big payday from Nike was going to be his golden ticket to pay everyone off, and he could not evaluate the stupidity and illegality of his conduct in trying to get the money from Nike.

In my youth when I was in the military straight out of high school and had taken a second job to supplement my income and get an apartment, I somehow ended up owing $79 one tax year. However, ill circumstances had converged at that time. I did my own taxes then, and at that time I did not have the whopping $79 to spare and still make my rent and so on, so by agreement I deferred that $79 remittance to the IRS. Well, ill circumstances continued to prevail, and multiply, I could not pay it when I said I would because I still didn’t have it, and holy mackerel did the friggin’ IRS come after me.

They called my home. They came to my home. They knocked on my neighbor’s doors. They came to my job. Both jobs. I lost my home. I lost my second job. The IRS called my command and pitched a fit. The IRS came to my ship where I now called “home” and hassled my superiors. My military command punished me after a Captain’s Mast, and they actually gave me a temporary reduction in pay as well as restriction to ship, and extra duty of course. The IRS punished me with compounded interest, fees, and penalties, and the IRS would not let me have a moments rest until we were square – which took me just under a year and cost me about $1,200 in 1978 dollars, not counting the temporarily reduced military pay loss. And all for a $79 IRS tax debt after I’d had one good year that subsequently went to crap.

Among many before him and those who will surely follow him, Attorney Michael Avenatti owes millions to the IRS, and he has for over 10 years, and he’s still flush with cash, and the IRS does little to nothing about it for over a decade, and that really sticks in my craw even after all these years. dangnabbit. lol!

    Close The Fed in reply to FlatFoot. | March 28, 2019 at 1:39 pm

    Dear FlatFoot:

    I extend my heartfelt condolences for such a small sum, and for your difficulties. Although I am an American citizen, it was not done on my behalf or at my behest.

    CTF

    jakee308 in reply to FlatFoot. | March 28, 2019 at 7:47 pm

    I was going to tell you that starting with Clinton the IRS became more selective on who they went after as they had increased jobs to do and decreased good employees to do it with. So they had to do triage on who they spent there time and agents.
    Now they send out letters. They’re more like bad debt collectors and like the old saying goes: “if you owe the bank a thousand dollars you’ve got a problem. If you owe the bank a million dollars, the bank has got a problem”
    Well these days the more bucks you got and the more bucks you owe means you get a bit better treatment for some reason. Esp. if you’re of the correct political affiliation.

    Same with the FBI. The US gov’t has become corrupt but we’re so rich it’s not nickels and dimes being paid off but millions.

      Tom Servo in reply to jakee308. | March 29, 2019 at 8:06 am

      It’s starting to look like Avenatti made a big mistake in trying to grab that Big Shiny Gold Ring. This reminds me of one of the proverbial 3 Ancient Chinese Curses: “May you attract the attention of the government.”

This guy will do anything for attention. ANYTHING.

He’s going to destroy himself in the process, though it couldn’t happen to a nicer guy.

My big problem with this is why the hell is the IRS investigating somebody for a DECADE and doing nothing.

Shit or get off the pot.

Enough with this bullshit of government organizations being allowed to investigate people indefinitely in the hopes that they might at one point commit at crime.

The IRS will cut you some slack on your personal taxes but will lock you right up for stealing trust taxes that belong to employees. Friends owned a trucking company and hired owner/operators to do the driving. Apparently, some of them didn’t pay their taxes so the IRS came after my friends who owed nothing and had done nothing wrong. They put stickers over the door locks on their cars then knocked on the door and made threats. Tony had a heart attack and they wouldn’t let his wife use one of the cars to drive him to the hospital!

    OleDirtyBarrister in reply to floridaman. | March 28, 2019 at 2:16 pm

    In one of my posts above, I pointed out that the IRS and DOJ are not forgiving of withholdings not remitted.

    I had a client with a dishonest book keeper that set up a scheme to embezzle the withholdings and she was successful at it for a year or so. The IRS was not sympathetic and understanding to the employer and the agents were a lot like mafia wiseguys. They essentially said, “So your employee embezzled from you. Gee, that’s too bad. Now where is our f*****g money?”

CaliforniaJimbo | March 28, 2019 at 2:52 pm

Dear CPL, You are not Rev. Al Sharpton. You will not slide with the IRS. You not only skipped out on your personal taxes, you did a big No No. You embezzled withholdings from two companies. When the IRS gets through with you, they will garnish the money you earn in the prison laundry.
Remember: Pigs get fed… Hogs get slaughtered.

The coincidence of Nike kneeling and Avenatti’s alleged extortion effort is suspicious. I wonder if this is how social justice schemes and non-profits (e.g. black hole/”whore” hat tip: NAACP) are funded through legitimate businesses.

Haven’t there been a number of fiction novels written about lawyers over extending themselves and getting involved in some borderline schemes that led to their downfall?

I know I’ve read a few police procedurals and other fiction that had the sleazy lawyer getting his comeuppance after going just a little bit too far.

Too bad Avenatti didn’t read them too.

I can’t blame him for not paying taxes, they’re so out of control as to be ridiculous. 22 trillion in debt and not a single adult in Congress, all kids in a candy store.
I can blame him for taking the tax out of employee checks and spending it on himself. For that put him away for a long, long time.
Here in Michigan our governor ran on fixing the roads. Never did say how she’d find money for it (a dem so you know where this is going). Sure enough, just a couple weeks ago she wants a 45 cent gas tax increase to pay for it. Didn’t hear a single word about cutting spending.

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