A California federal judge has granted a trial to dishonored attorney Michael Avenatti in a case that accuses him of siphoning millions of his own clients.
On Tuesday, Judge James V. Selna ruled that Santa Ana federal prosecutors did not provide evidence to Avenatti prior to his wife’s fraud trial, including data from an office accounting program called Tabs, or Tax and Bookkeeping Solutions.
Selna set a new trial date for Oct. 12, along with a preliminary conference for Sept. 2, according to local journalist Meghann Cuniff live tweets Second of the four criminal proceedings of Avenatti.
Outside the court, Avenatti told a group of reporters, “Today is a great day for the rule of law in the United States of America.”
Avenatti is accused of embezzling liquidation funds from five clients, including Geoffrey Johnson, a paraplegic who had suffered an injury at the Los Angeles County Jail, in addition to beauty vlogger Michelle Phan and her partner Long Tran.
The trial breaks the government’s momentum in its criminal cases against Avenatti, who rose to fame as a lawyer for porn actress Stormy Daniels, who was fighting former President Donald Trump in 2018 for a money deal.
On July 8, Avenatti was sentenced to two-and-a-half years behind bars after a New York federal jury convicted him of hatching a plot to extort millions from Nike.
Weeks later, he began the first stage of his trial in California. “This case is about math,” Avenatti told jurors during the initial statements. “This case is about how a customer is owed after receiving the settlement.”
This math-focused defense gave him the impetus he needed for a new trial.
According to Avenatti’s Aug. 15 motion for a lawsuit, former office manager Judy Regnier said her former firm Eagan Avenatti used two different programs, QuickBooks and Tabs, to calculate how much money is owed to a customer.
The filing indicates that prior to the trial, Avenatti requested access to the tab data, which the government never produced. Avenatti also claims that prosecutors provided a version of the QuickBooks data “although it is unclear where it came from or whether it was even the most recent version retained by the law firm.”
Avenatti, who represented himself at trial, asked the court to dismiss the indictment or declare a lawsuit. “The government deleted this material information and was unable to produce it for years despite its obvious importance and clear obligation to do so,” Avenatti’s motion states. “From this file, your errors continue.”
In response, prosecutors stated that Avenatti “now claims that the data in the records are critical to his defense,” but “never once in numerous documents filed for two years did he mention the data in the records, even all after the government specifically identified them in a previous presentation. ” Instead, they claim, Avenatti had only sought “free access” to the servers of his law firm.
Avenatti’s “movement makes it clear, however, that the first time [Avenatti] it was never specifically requested that the tab data be on August 12, 2021, ”prosecutors added.
On August 19, Avenatti responded to the government’s opposition, saying his defense has suffered “without access to these exculpatory materials.”
“Without knowing the precise calculations contained in both the tabs and the QuickBooks data, it is impossible to know the costs, fees, expenses and other hourly work performed in relation to each of the alleged victims,” Avenatti wrote in the file .
The next day, Selna ordered the Justice Department’s privilege review team to allow Avenatti to search for financial data on Eagan Avenatti’s servers.
On Monday, the defense provided Selna with a preliminary report on Tabs’ data and alleged it was missing. “There are additional files that have not yet been produced,” Avenatti said in a lawsuit. “It is currently unclear how much data from the remaining tabs will be provided to the defendant.”
Avenatti claimed that Tabs’ data revealed “numerous payments made for the benefit of at least two of the clients mentioned in the indictment shortly after receiving the agreements, and yet neither the government nor its expert ever accounted for those payments.”
At a hearing Tuesday, Selna noted Regnier’s 2019 interviews referring to Tabs and said the feds were “fully aware of the importance” of the data.
Selna told the courtroom that she found no intentional misconduct by prosecutors or the privilege review team in withholding Avenatti materials, but that there were “deficiencies” in the discovery review process.
“It seems to me that prejudices occurred here in various ways,” Selna concluded