Avenatti Faces Suspension By California State Bar Association

NEWPORT BEACH, CA — California's State Bar has petitioned to place embattled attorney Michael Avenatti on "involuntary inactive status" while he faces federal charges on both coasts.

The State Bar Association can place an attorney on inactive status "when there is sufficient evidence to show that the attorney caused or is causing substantial harm to the attorney's clients or the public," they said. Also, the involuntary inactive status can be instituted if there is a "reasonable probability both that the Chief Trial Counsel will prevail on a related disciplinary matter and that the attorney will be disbarred," the state bar association has said.

Avenatti, who has ten days to file a response to the State Bar after being served, has yet to request a hearing.

He was indicted in federal court in Orange County for allegedly stealing millions of dollars from five other clients, one of them a paraplegic man who had won a $4 million settlement but received only a fraction of that in periodic payments that never exceeded $1,900.

Avenatti was also accused of filing fake tax returns to a Mississippi bank, and of repeatedly lying about his business and income to an agent of the Internal Revenue Service, creditors, a bankruptcy court and a bankruptcy trustee.

Avenatti was arrested in New York in March on extortion charges, accused of seeking millions from Nike in exchange for what he described as evidence of misconduct by company employees in the recruitment of college basketball players.

Federal prosecutors most recently accused him in New York of misappropriating nearly $300,000 from his most famous client, adult film performer Stormy Daniels, who sued President Donald Trump seeking to invalidate a non-disclosure agreement she signed over an alleged one-night stand she claims to have had with Trump in 2006. Trump has denied the allegation.
Avenatti has repeatedly and vehemently maintained his innocence, calling the charges politically motivated.

"I am highly confident that when this process plays out that justice will be done," Avenatti said after a Santa Ana federal court appearance last month.

This report will be updated.

City News Service, Patch editor Ashley Ludwig, contributed to this report.