Federal agents arrested Michael Avenatti on Tuesday evening or violating the terms of his release:
The arrest occurred outside the disciplinary hearing in which the State Bar of California has accused the hard-charging, tough-talking attorney of using a doctored document to scam a client out of nearly $840,000, funneling money from a lawsuit settlement fund to his own personal use.The State Bar of California, the official attorney licensing agency, has sought to put Avenatti on “involuntary inactive status,” setting in motion a timeline for disbarment proceedings.During a break in testimony, members of the United States Attorney’s Office for the Central District of California, who are prosecuting Avenatti in a separate criminal matter in Orange County, parleyed with Avenatti’s team of lawyers and took the lawyer into custody.”I understand that Mr. Avenatti has been arrested by the federal authorities for violating the terms of his release,” said attorney Steven Bledsoe, who represents the alleged Avenatti victim in the State Bar case and was present when the arrest occurred.
Avenatti’s lead counsel told the court that his client “was unable to return to court.” He attended court “for an unrelated California State bar Association disciplinary hearing.”
The association pondered to place Avenatti on “‘involuntary inactive status’ for ‘using a doctored document to scam a client out of nearly $840,000.”
The allegations accuse him of misappropriating that money to his client Gregory Barela. The client “continued inquiries about the funds to Avenatti, and the attorney allegedly kept the cash for himself.”
Avenatti still owes Barela $710,000.
Avenatti grumbled “[C]ompletely innocent” as the agents took him out of the courthouse.
Avenatti’s lawyer Dean Steward confirmed the arrest. He also believes Avenatti will have a bail hearing today around 2 p.m. local time in Santa Ana.
Avenatti faces accusations of “fraud, cheating on his taxes and lying to investigators.” The feds “allege he embezzled funds from his clients.”
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