Stormy Daniels and Michael Avenatti Face Off in Court

The US lawyer Michael Avenatti stole nearly $300,000 in book proceeds from former client Stormy Daniels, the adult film actor and producer, a prosecutor told jurors in New York on Monday as the once high-flying attorney’s third criminal trial in two years got under way.

Prosecutors say Avenatti, 50, who has pleaded not guilty, embezzled book contract proceeds intended for Daniels, who came to worldwide attention when she claimed to have had an affair with Donald Trump before he became president and was then paid to keep quiet about it.

“This is a case about a lawyer who stole from his client. A lawyer who lied to cover up the scheme,” assistant attorney Andrew Rohrbach said, noting that Avenatti forged Daniels’s signature in a letter to an agent as part of the crime.

“The defendant stole almost $300,000 from the person he was supposed to be looking out for,” he added.

Avenatti became a media fixture when he represented Daniels in cases against Trump, and himself became an outspoken critic of the then president, even stirring speculation that he might enter politics.

Daniels said she received $130,000 before the 2016 presidential election in exchange for not discussing her past sexual liaison with Trump, who denies it happened.

Avenatti represented her in a lawsuit seeking to invalidate the non-disclosure agreement, which Daniels won, and a defamation case against Trump, which she lost.

Avenatti, who is not being held in jail, arrived at federal court in Manhattan on the cold, sunny morning, wearing a dark jacket and a blue shirt and tie.

Daniels could give testimony on Wednesday. Her legal name is Stephanie Clifford but she has previously stated in media interviews that she prefers to go by her stage name.

Michael Cohen, Trump’s former personal attorney who made the so-called hush money payment to Daniels, also turned up in court.

As Avenatti entered the court room he spotted Cohen and several times said to him: “Do you have those Donald Trump knee pads?”

Asked for his reaction, Cohen told the Guardian: “I don’t think about him. He’s as pathetic today as I remember him years ago.” Cohen claimed that he has been a friend of Daniels since Avenatti began representing her in 2018, and that she has appeared as a guest on his podcast.

For most of the morning’s proceedings, Avenatti wrote notes to himself and to members of his legal team.

Rohrbach said of the defendant: “He lied to the victim. He lied to the book agent, he lied to everyone involved, over and over and over again.”

He said Daniels paid Avenatti $100 to represent her in cases against Trump, and authorized him to raise further funds from the public to pay his expenses.

But he said there was no agreement for Avenatti to receive payments under Daniels’s contract to publish her memoir, titled Full Disclosure.

Defense attorney Andrew Dalack countered that Avenatti was entitled to a “reasonable percentage” of the proceeds from Daniels’s book and was authorized to accept payments on her behalf. The dispute, Dalack added, “has no business in federal criminal court”.

“What we have in this case is a disagreement, a fee dispute between an attorney and his disgruntled former client who wanted all the benefits of zealous representation without having to pay for it,” he said.

Dalack described Daniels as “unreliable” with regards to the terms of her book contract, calling the memoir a commercial “disaster” because she failed to live up to promotional requirements.

He also told the jury that during her time as Avenatti’s client she became increasingly erratic, adding that Daniels had claimed she could speak with dead people, had X-ray vision and spoke to dolls.

“Talking to dolls isn’t unusual – my kids do it all the time – but when dolls talk back to you, that’s a problem,” said Dalack.

Daniels’s testimony will be pivotal for prosecutors trying to prove Avenatti engaged in wire fraud and aggravated identity theft to keep from giving his client money he had received from her publisher.

On Monday, Luke Janklow, Daniels’s New York book agent, testified that Avenatti had repeatedly urged him to deposit parts of Daniels’s $800,000 book advance quickly but had given him different account details from those he had previously been using to pay the author. The prosecution alleges that the lawyer secretly diverted the money for his personal use.

This trial is the latest in a slew of legal troubles that have cost Avenatti his legal career, which ended abruptly in 2019 when prosecutors in New York and California brought dozens of criminal charges that could land him in prison for decades.

Avenatti is appealing a February 2020 guilty verdict and 2.5-year prison sentence for trying to extort up to $25m from the sportswear giant Nike Inc.

He was convicted of threatening to expose its alleged corrupt payments to families of college basketball prospects unless it hired him to conduct an investigation. Nike denied wrongdoing.

He is separately facing a retrial on federal wire fraud charges in California, and denies embezzling nearly $10m from five clients.

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