(Bloomberg) — The hot-shot lawyer and the adult-film actress who teamed up in 2018 to sue then-president Donald Trump over a hush-money payment are about to face off against each other in a federal criminal trial in New York.
A grand jury charged Michael Avenatti with wire fraud and identity theft for allegedly stealing the book advance of his former client, Stormy Daniels, and spending it on everything from Starbucks coffee to payments on a Ferrari. The case marked a stunning split for a lawyer-client team whose politically charged suit against Trump launched them into the national spotlight.
Daniels is expected to take the stand later this week as the government’s star witness against Avenatti, whose trial began on Monday. The U.S. said she will testify that Avenatti intercepted several advance payments from the publisher of her memoir and then fabricated explanations when she asked about the missing money.
“He lied,” Assistant U.S. Attorney Andrew Rohrbach told the jury in his opening statement. “He told her that the publisher was being slow. He told her that he was working on it. The whole time he had her money and he was spending it. Eventually the lies ran out.”
The case is one of several against Avenatti, who claims he was targeted by Trump’s Justice Department as political payback. The 50-year-old California lawyer was convicted in 2020 of trying to extort millions of dollars from Nike Inc. in settlement talks for another client. A third case in federal court near Los Angeles ended in mistrial and Avenatti appealed an order for a new trial.
Defense lawyer Andrew Dalack told jurors Monday that Daniels paid Avenatti a token $100 for his work on the Trump case and agreed in writing to let him raise money from the public and share in any future publishing contracts. Daniels is lying when she says Avenatti later made a verbal agreement not to take a cut, Dalack said in his opening statement.
“Does it make sense to you that Mr. Avenatti would sign an agreement entitling him to a fee from a book deal, only to orally later abandon that interest and then steal in plain site what he was previously entitled to?” Daleck said. “It doesn’t make any sense.”
One notable spectator at the trial Monday was Trump’s former longtime attorney and fixer Michael Cohen, whose involvement in the hush-money payment to Daniels and another woman who claimed to have had an extramarital affair with Trump led to a three-year stint in prison. Cohen pleaded guilty to crimes including campaign finance violations and bank fraud, and is now a full-time critic of Trump.
“Avenatti was so kind and gracious to spend other people’s money to fly himself and Stormy Daniels to my hearing that I thought the only decent thing to do would be to reciprocate,” Cohen said, sarcastically, in an interview.
Cohen said Avenatti made a sexually crude remark about him and Trump as he passed him in the courtroom before the trial started. Cohen said he reciprocated with a crude remark of his own relating to prison.
X-Ray Vision
The defense also intends to undermine Daniels’s credibility as a witness by bringing up her belief in the paranormal, including her purported “X-ray vision” and her past claims to have communicated with “a haunted doll named Susan,” as Avenatti’s lawyer put it on Monday.
The government sought to head off the potentially damaging evidence about her beliefs.
“Adult film actresses and people who believe in the paranormal can be victims of fraud too,” the prosecutor said. “This case is not about her job, what she does for money. It’s about a fraud that was committed.”
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Dalack says there is evidence that Daniels asked Avenatti to close her bank accounts to hide money from her estranged husband, requiring Avenatti to use his own accounts to accept the payments from the publisher. The attorney argued Daniels cooked up the story about stolen money as payback after she lost a separate defamation suit against Trump, resulting in a $293,000 award for attorney’s fees against her. Daniels simply doesn’t want to pay for the work Avenatti did to bring attention to her case, the lawyer said.
Avenatti “transformed a rather obscure adult entertainer into a household name,” Dalack said. “This was not by accident — this was the result of hundreds of hours of work by Mr. Avenatti, and he accomplished for Ms. Daniels what few other attorneys in America could.”
Daniels, whose real name is Stephanie Clifford, says she had sex with Trump in the summer of 2006 in Lake Tahoe.
The case is U.S. v. Avenatti, 1:19-cr-00374, U.S. District Court for the Southern District of New York (Manhattan).
(Updates with comment from Trump’s former attorney Michael Cohen)
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