Michael Avenatti denies embezzlement charges in California

Michael Avenatti departs a scheduled sentencing at Manhattan federal court, Thursday, July 8, 2021, in New York. (AP Photo/John Minchillo)

SANTA ANA, Calif. — Michael Avenatti, the brash lawyer recently sentenced to 2 1/2 years in prison in a US$25 million extortion case in New York, now is on trial in California on charges of embezzling millions from his clients and told jurors Wednesday that he "gave people who had no chance a fighting chance."

It is the second trial this month for the 50-year-old lawyer who once represented porn actress Stormy Daniels in her lawsuit against then-President Donald Trump. Federal prosecutors in Southern California have accused Avenatti of cheating five of his clients out of nearly $10 million by negotiating and collecting settlements on their behalf and funneling the payments to accounts he controlled while lying to them about what happened to the money.

"They trusted Michael Avenatti completely, and he violated their trust and stole their money," Assistant U.S. Attorney Brett Sagel told jurors in an opening statement at the trial in Santa Ana.

Avenatti, who is suspended from practicing law in California but is representing himself at trial, has pleaded not guilty to 10 counts of wire fraud in connection with the allegations spanning from 2015 to 2019. He denied embezzling money and said his law firm was entitled to recoup expenses if settlements were reached.

"We represented thousands of little guys, the Davids versus the Goliaths," Avenatti told the jury in an opening statement. "We gave people who had no chance a fighting chance."

Prosecutors say they expect to take three weeks to make their case. In one instance, they allege Avenatti collected $4 million from Los Angeles County for a man who suffered injuries in custody and was left paraplegic after a suicide attempt, paying out much smaller amounts that he told the man were advances.

In another case, prosecutors said Avenatti collected a $2.75 million settlement for a client and used the bulk of the money to buy a private plane.

In addition to these counts, Avenatti faces charges of bankruptcy, bank and tax fraud in California. He is expected to be tried on those allegations later this year after U.S. District Judge James V. Selna split a 36-count indictment into two trials.

Avenatti also faces another criminal case in New York in which he is charged with cheating Daniels out of hundreds of thousands of dollars. Avenatti represented her in 2018 in lawsuits against Trump and often appeared on cable news programs to disparage the Republican president.

Daniels said a tryst with Trump a decade earlier resulted in her being paid $130,000 by Trump's personal lawyer in 2016 to stay silent. Trump denied the affair.

Avenatti rose to prominence by sparring publicly with Trump but criminal fraud charges in California and New York disrupted his rapid ascent. He was sentenced in New York after being convicted of attempted extortion and other charges tied to his representation of a Los Angeles youth basketball league organizer who was upset that Nike had ended its league sponsorship.

Avenatti explored running against Trump in 2020 but his political aspirations evaporated when he was criminally charged. He pleaded not guilty to all charges and maintained he was a victim of politically motivated attacks.