How Michael Avenatti spent his fortune, while allegedly dodging taxes

By IRSFOXBusiness

Michael Avenatti is digging himself into a hole, attorney says

Attorney Emily Compagno discusses how prosecutors decided to drop all charges against “Empire” actor Jussie Smollett and how attorney Michael Avenatti was charged with trying to extort $20 million from Nike.

Michael Avenatti, well-known as adult actress Stormy Daniels’ former lawyer, was indicted on Wednesday for allegedly misappropriating funds from Daniels after helping strike a book deal for her.

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The high-profile lawyer defended himself by saying on Twitter that he was “entitled to any monies retained” per an agreement with Daniels.

Avenatti was also indicted for trying to extort $20 million from sportswear giant Nike.

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These charges add to a number of other charges Avenatti is already dealing with.

He faces an unrelated multicount federal indictment that he not only stole money from clients, but that he failed to pay taxes, amid other allegations.

The 48-year-old has been under watch by the IRSOpens a New Window. over potential taxOpens a New Window. violations for a decade.

According to IRS documents seen by The Los Angeles Times, Avenatti reported $1.9 million in personal income in 2009, but did not pay his $570,000 tax bill. He also did not pay the $282,000 worth of taxes he owed in 2010, after reporting that he earned $1.2 million.

The report claims the high-profile attorney filed no personal income tax returns in any of the following years, despite fattening his bank accounts by $18 million.  Avenatti has allegedly not paid taxes for Avenatti & Associates either.

Here’s a look at what Avenatti is said to have bought with his money, instead of paying his taxes, as detailed by the Los Angeles Times:

Neiman Marcus purchases: $217,000

Luxury watch store: $117,000

Porsche dealers: $277,236

Waterfront house in Newport Beach, California: $100,000 monthly rent

Ferrari lease: $39,762

Luxury apartment in Century City rent tab: $123,825

Seattle coffee-chain Tully’s: $9 million (Avenatti’s Global Baristas has also been accused of dodging taxes)

Exclusive Resorts, “world’s elite private vacation club”: $176,500 (paid for through Avenatti & Associates)

On Wednesday, federal agents seized Avenatti’s $4.5 million private jet – a Honda HA-420 twin engine aircraft – from the Santa Barbara airport pursuant to a warrant issued by a federal judge. It was not clear whether the seizure was related to the nonpayment of taxes.

Avenatti was initially charged in two separate criminal cases by federal prosecutors in New York and California. He was arrested in New York last month and released on $300,000 bond.

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The high-profile attorney maintains that he is innocent, saying in a statement on Wednesday that “at no time was any money misappropriated or mishandled” and that he will be “fully exonerated” once the relevant documents are reviewed.

Avenatti potentially faces potentially hundreds of years in jail if he is found guiilty on all charges.