Avenatti Docs Leak: Got $8 Million Out of Thin Air When Stormy Arrived
Lawyer and/or media gadabout Michael Avenatti has thus far provided a great deal of the comic relief in l’affaire Stormy Daniels, but there are a surprising number of serious questions about him that remain unanswered.
For instance, who’s paying him? Daniels has confirmed that she isn’t footing the bill, and from the looks of things, Avenatti’s round-the-clock availability seems to indicate that he’s not doing a whole lot of work for other clients.
Also, is the person paying Avenatti associated in any way with the DNC or outside political groups? Is he protecting Daniels from penalties she might incur? And, perhaps most crucially, how much is he being paid?
In spite of the fact that Avenatti’s appearances on cable news seem more frequent than takeoffs at LaGuardia, we don’t have any answers to these questions — nor indeed does anyone on CNN or MSNBC feel particularly inclined to ask them. They just assume that it’s none of their business and move along their merry way.
For his part, Avenatti has said that his legal fees are either being paid by Daniels or crowdfunding from CrowdJustice, an online platform where you can give small donations to certain legal causes.
“Despite the fact that I have answered this repeatedly, many refuse to accept the answer,” Avenatti wrote in a statement posted to the Dropbox account of his law firm Avenatti & Associates.
“Once again (for at least the 20th time) — ALL fees and expenses of this case have either been funded by our client, Ms. Stephanie Clifford (Stormy Daniels), or by donations from our crowdjustice.com page. Please read that if you are unclear. Read it again if need be. Keep reading it until you get it.”
As humorously Biff Tanner-like as that terse statement may be, there are several problems with it. First, while he’s busy banging journalists’ heads against the wall so that they’ll read what he had to say, he probably should instruct his own client to read it, since her own statements in the matter directly contradict this. And second, it doesn’t explain why he seems to have come into $8 million as the Daniels case began to explode earlier this year.
Eight million, you say? Apparently so — at least if a bit of sleuthing by notable trial lawyer Robert Barnes is to be believed.
Barnes looked up some tax information on Avenatti’s law firm and found he hadn’t paid any taxes for the years 2014, 2015 and 2016, even though filings in a bankruptcy court said that during that period the firm earned a whopping $30 million.
“In January 2018, (Michael Avenatti) got an unidentified source of income that allowed him to pay $4.85M to his law firm employees he defrauded, close to $2M in back taxes for payroll taxes on his law firm, and near another $1M to other creditors,” Barnes tweeted.
“Same time as: new client #StormyDaniels.”
In December 2014, #Avenatti decided to quit paying most taxes. He failed to even file his law firm's income tax returns for 2014, 2015, and 2016, though a lawyer's detailed filings in his bankruptcy court report his firm made over $30M in income in that time. IRS records confirm. pic.twitter.com/ytNXBaSKZ5
— Robert Barnes (@barnes_law) May 13, 2018
In January 2018, #Avenatti got an unidentified source of income that allowed him to pay $4.85M to his law firm employees he defrauded, close to $2M in back taxes for payroll taxes on his law firm, and near another $1M to other creditors. Same time as: new client #StormyDaniels. https://t.co/svr125THxe
— Robert Barnes (@barnes_law) May 13, 2018
While Barnes’ statements are still unconfirmed, this is a fairly well-known (if notably pro-Trump) legal source. He’d also be in a world of trouble should those statements turn out to be untrue, since I assume Avenatti would have no problem suing him for libel and cleaning out his coffers were this untrue.
And, as it turns out, he provided legal papers that more or less proved this.
As you can see, Avenatti only declared $412,000 in assets to his name in December of 2017. He also declared more than $19.4 million in liabilities.
But in court documents filed less than a month later, Avenatti discloses that came into $4.85 million to settle a fraud lawsuit brought by members of law firm that he allegedly defrauded, nearly $2 million in back payroll taxes on his law firm and close to $1 million for his other creditors.
That adds up to nearly $8 million that he apparently didn’t have in December. So, either he lied to the court when listing his assets, he managed to scrounge up that money in the cushions of his sofa, or he’s being paid $8 million for work.
I know crowdfunding can be effective and some porn stars probably make a fair bit of change. They don’t make enough to subsidize a lawyer to the point where that the attorney can enter into a Eugene Landy/Brian Wilson-esque relationship with them and seemingly do no work for other clients. I’m sorry, that’s not quite how that works — especially when $8 million dollars drops in your lap during the month that it just happens you took on Daniels as a client.
This isn’t a minor question, either. Writing in The Hill last week, Mark Penn suggested that Avenatti’s report on money going to Michael Cohen “also raises the question of where and how did he get this detailed financial information because he didn’t find it on Google.”
“This is the kind of information that would have been known only by the Treasury Department, his banks or by prosecutors, raising some serious questions about what kind of operation Avenatti is running,” Penn wrote. “He can’t be both an attorney and then participate as an officer of the court in trafficking illegally obtained information.”
Penn also noted that “Avenatti has been given a free, unfettered media perch on TV to spread his stuff without the networks forcing him to meet any disclosure requirements, saying that he is Daniels’s attorney when someone else entirely is paying for this operation is not true disclosure that allows the viewer to evaluate the source and potential conflicts.
“He is now being given deference as though he is a journalist interested in protecting unverified sources while he makes headline-grabbing pronouncements,” Penn added. “Lawyers need to disclose the source of their evidence.”
As to whether or not that $8 million was involved with his work for Daniels, it seems awfully felicitous that money just happened to drop into Avenatti’s lap almost simultaneously with his taking the case. There’s no definitive link yet, but given that Avenatti’s crowdfunding story beggars belief, this certainly sounds a lot more plausible.
But, hey, there’s one way that Avenatti could prove all of us wrong: Open up all of us books on the Daniels case. Show us his crowdfunding statements. Get CrowdJustice to verify them. He doesn’t seem particularly shy about disclosing almost anything else about this case.
If he really and truly didn’t get any money from outside sources, making all of that information transparent would make anyone who questioned this in the first place look stupid.
For whatever reason, I don’t think I’m going to be seeing any of that anytime soon.
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