Michael Avenatti, the LA-based lawyer who was largely unknown on the national stage until he sued President Trump and his former Attorney Michael Cohen on behalf of his client, former porn star Stormy Daniels, who claims she had an affair with Trump back in 2006, has been relentlessly pressing his case in the media about why he should be the Democratic candidate to challenge President Trump in 2020. All the while, Avenatti has been dogged by a legal dispute with a former attorney at his collapsed law firm, Eagan Avenatti, over what the former employee, California lawyer Jason Frank, claims are millions of dollars in unpaid wages owed to him by Avenatti.
But on Monday, a judge ruled against Avenatti, ordering him to pay $4.85 million to Frank, per Bloomberg. The judgment begs the question: What happened to all of Avenatti's money? His firm once booked tens of millions of dollars a year in revenue and Avenatti, as a named partner, was one of the first to the trough. Well, in a wide-ranging expose, the Daily Beast published the most intensive report to date about Avenatti's finances, his lavish lifestyle and the fallout from his contentious divorce. All of which suggests that the LA lawyer lived the high life while owing millions in taxes to the IRS, before he took on Daniels as a client, was desperately looking for his next venture.
As the report suggests, it appears Avenatti has also been less than truthful with the press, repeatedly lying about his ownership stake in Eagan Avenatti and insisting that his new firm, Avenatti and Associates is a completely separate entity when, in fact, the two firms are conjoined by an ownership stake.
On Friday, Avenatti told The Daily Beast that he currently has no interest in Eagan Avenatti. In a July filing in Eagan Avenatti’s bankruptcy case, however, Avenatti indicated he owns the firm through Avenatti & Associates.
"The simple fact is that I have an ownership interests [sic] in two separate law firms," Avenatti stated in one July declaration. "One is EA. The other is not. I maintain both of my office [sic] at EA’s Newport Beach office."
Avenatti testified at a July 25 bankruptcy hearing (from which the media was barred) that Avenatti & Associates now owns a 100-percent stake in Eagan Avenatti, according to documents filed in Frank’s case.
As the DB reported, Avenatti owes millions in back taxes, public records show.
But the questions over his finances remain—and could become a sore spot on the campaign trail, as creditors pursue him and his former companies. Both the Eagan Avenatti law firm and a shuttered Seattle coffee chain, which Avenatti says he no longer owns, owe millions in unpaid taxes and judgments, according to court documents and filings with local recorder’s offices.
Tax liens filed in Orange County also show that Avenatti has personally owed at least $1.2 million in federal taxes on top of the corporate debts. One lien, filed in February 2018, was for $308,396, while another filed in August 2015 showed a balance of $903,987. The Daily Beast did not find records showing the liens were released, but Avenatti claims both debts were “fully paid.”
So where did all of Avenatti's money go? Details from his divorce from his wife Lisa Storie-Avenatti reveal that the couple lived a lavish lifestyle that featured multi-million dollar homes, international and domestic travel on private jets and an exotic collection of art and cars.
In one declaration, filed in January, Storie-Avenatti said, “Petitioner and I enjoyed a very extravagant marital lifestyle. In October 2011, we bought a home in Laguna for $7.2 million and sold it in September 2015 for $12.6 million.”
"We traveled extensively throughout the world, and, when not flying privately, we always flew business class and stayed at five-star hotels," Storie-Avenatti said in the court filing, adding that they regularly visited Cabo (where they held their destination wedding and paid expenses for 20 guests), the French Riviera, and Paris.
"I had unfettered use of credit cards that were in my name. My American Express bill was historically on average of $60,000 to $70,000 per month, and was paid in full each month," Storie-Avenatti added in court papers.
Avenatti has repeatedly accused Trump of being a "scumbag", yet, after his wife filed for divorce, he cut her off financially, forcing her to dip into her savings to support herself and the couple's son.
She said that since 2010, Avenatti raced in about 33 professional sports car races in the United States and Europe, including the 24 Hours of Le Mans in France, where his team included Saudi Prince Abdulaziz bin Turki Al Saud. “We spend a large amount of money on Petitioner’s racing activities,” Storie-Avenatti continued, the emphasis hers.
Storie-Avenatti was asking for $215,643 a month in family support and provided a rundown of the couple’s alleged monthly expenses including, among other things, $12,000 for nannies, $19,779 for groceries and household supplies, $19,849 for clothing, and $27,257 for entertainment, gifts and vacations.
Avenatti employed a full-time pilot hired at $100,000 a year, and owned two private jets worth about $9 million, Storie-Avenatti claimed. He also retained a full-time driver paid through his firm, but she didn’t know his pay rate.
She claimed that since they separated in October 2017, after more than six years of marriage, Avenatti cut her off from his income and she was forced to use her savings to pay for expenses for herself and the couple’s 3-year-old son.
"The parties’ marital lifestyle was funded by [Avenatti’s] earnings and income—over which [he] continues to exercise exclusive control," Avenatti-Storie’s attorney said in one court filing.
Adding a supremely ironic twist to Avenatti's presidential ambitions, the lawyer has evaded questions about his tax returns and refused to guarantee that he would release a cache of tax returns if he were to run against President Trump.
During one August appearance on ABC’s This Week, Avenatti remained noncommittal on whether he’d release a cache of his tax returns as a presidential candidate. "I don’t know yet," Avenatti told correspondent Jonathan Karl. "I haven’t decided. I’ll look at the issue. But here’s what I do know..."
"You don’t know if you’ll release your tax returns?" Karl asked. "This was a major issue with Trump."
So there you have it: In addition to believing he was under "no obligation" to provide evidence to back up the claims of his client Julie Swetnick against Judge Brett Kavanaugh - claims that Swetnick herself contradicted in a public interview - Avenatti believes he's not obligated to release his tax returns, despite repeatedly demanding that Trump release his. These are just two reasons why even the liberals that Avenatti hopes to court during the Democratic primary have already written his candidacy off as an unserious political stunt.