Michael Avenatti sentenced to 8 years in client fraud case after 9th Circuit reversal
The brief cable news staple and hopeful for the 2020 Democratic presidential nomination returned to the Orange County federal courthouse on Thursday.
A woman who’s owed $1.3 million by thieving lawyer Michael Avenatti persuaded a federal judge on Thursday to increase his new prison sentence because of the harm she continues to suffer eight years after he stole from her.
“I’m still rebuilding my life. I’m still playing catch up, but these eight years have not been free to me. They have been paid for with every ounce of energy, hope and faith that I could muster,” Alexis Gardner said during a hearing in Santa Ana, California. “I will say it’s cost me a lot to survive.”
“He’s trying to say, ‘I’m good. I’m doing well, doing well for people,’” Gardner continued. “But in reality, Michael has not done anything good for me. … This is a scary person, and I think that people need to be protected.”
Senior U.S. District Judge James V. Selna cited Gardner’s comments when he explained why he was sentencing Avenatti to 95 months in prison, which is 14 months longer than the sentence he reached in a draft order provided to the attorneys before the hearing.
“Having considered the arguments this morning, particularly Ms. Gardner’s remarks to the court, I’ve concluded that the sentence for which I proposed giving does not adequately reflect the seriousness of the crime,” the judge said.
Avenatti is to serve the nearly eight-year sentence on top of his 30-month sentence for trying to extort Nike. Selna reduced the 135-month sentence he was going to impose by 40 months to account for the time Avenatti has served on his sentence for defrauding Stephanie “Stormy Daniels” Clifford, pornographic star client who propelled him to fame in 2018.
The 9th Circuit U.S. Court of Appeals ruled in October 2024 that Avenatti’s sentence in the Central District of California wire fraud case should have been concurrent with the Clifford sentence out of the Southern District of New York. The order vacated Avenatti’s 14-year sentence and ordered Selna to consider the value of the legal services Avenatti provided the clients he defrauded.
Judge Selna ordered Avenatti to pay the same restitution to three victims as he did in the original sentence, but he reduced restitution for a fourth victim from $4 million to $721,239.
Avenatti, 54, told Judge Selna in a letter dated May 20 that he’s helping inmates who feel suicidal and who are preparing to leave prison.
“I have focused my efforts over the last 40 months in prison on being accountable, exercising humility, and becoming a better father, a better man, and a better human being,” Avenatti wrote. “I have made a concentrated effort at rediscovering what drove me to become a lawyer to begin with 40 years ago — an innate desire to help others at a difficult time in their lives.”
He said his “greatest moments of happiness and satisfaction while I have been in prison have centered not on myself, but helping others succeed.”
Judge Selna told Avenatti on Thursday, “I read and appreciated your letter.”
Avenatti said he “meant it.”
“I can’t go back and change the past, unfortunately. If I could, I would, but I can’t,” Avenatti told the judge. “All I can do is try to move forward in a positive way, and that’s what I’ve attempted to do, Your Honor, and that’s what I’m going to continue to attempt to do.”
The former cable news staple was dressed in a gray sweatshirt and white undershirt, and he said hello to his friends and family in the gallery, including his ex-wife and his former lawyer, H. Dean Steward.
Assistant U.S. Attorney Brett Sagel told reporters after the 2 1/2 hour hearing he believes Avenatti deserved a more significant sentence, “but I’m pretty sure he doesn't see this as a victory, doing double digit hours in jail for his criminal conduct.”
Prosecutors recommended Selna sentence Avenatti to 208 months in prison, then subtract the 40 months he’s already served in the Clifford case, which would give him the same 168-month sentence that Selna imposed in December 2022.
Sagel and Assistant U.S. Attorney Ranee Katzenstein wrote in a 38-page memo that the sentence was justified because Avenatti has continued to lie and victimize his former clients from behind bars, including using his depositions in bankruptcy cases “to baselessly accuse countless people of criminal and unethical behavior while simultaneously providing false testimony.”
Deputy Federal Public Defenders Margaret Farrand and Adithya Mani asked for Avenatti to be sentenced “to at most 39 months” in a 41-page memo that said Avenatti “has lived every day of his incarceration seeking to atone for the harm he caused and set his life on a different path.”
Selna’s draft sentencing order imposed 121 months, which would have dropped to 81 months when factoring in Avenatti’s sentence for the Clifford fraud. To get there, the judge decreased Avenatti’s offense level under U.S. Sentencing Guidelines through a four-level downward departure, then chose the low end of the 121- to 151-month range.
The judge gave Avenatti a four-level downward departure in his sentence in December 2022, too, but the new sentence is lower because it’s calculated under a lower total loss amount based on the change in what Avenatti owes cosmetics magnet Michelle Phan.
Sagel argued Thursday the sentence needed to be higher to fully account for Avenatti’s crimes and the harm he caused Gardner, Phan and the other victims, Greg Barela and Geoff Johnson. A four-level variance “would be injustice” because Avenatti “is still the same person that he was in 2022.”
“He’s not accountable. He still isn’t. He never has been. There are multiple examples of that,” Sagel said.
Sagel said Avenatti’s recent testimony in civil cases contradicts his claims of humility, and he read aloud Avenatti’s answer when asked how many times he’s appeared on 60 Minutes. Avenatti boasted that he has “no doubt” that his three appearances in five years “is a record for ‘60 Minutes’” and that one episode “drew over 20 million viewers, and at the time, that was either the sixth or seventh most watched interview in the history of Western television.”
“‘60 Minutes’ appearances are not really going to sway me,” Judge Selna interjected.
“But what should sway you is when he tells you that he’s exercising humility. He’s not,” Sagel replied. “He’s the same person as he was in 2022 and 2015 when he stole Geoff Johnson’s money. In 2017 when he stole Alexis Gardner’s money. In 2018 when he stole Gregory Barela and Michelle Phan’s money.”
Sagel also read aloud deposition testimony of Avenatti criticizing the former law parter he owes millions of dollars and alleging a conspiracy between Sagel and another former law partner, former federal prosecutor Andrew Stolper. He also read testimony of Avenatti blaming The Los Angeles Times coverage of him on a reporter’s vendetta and saying sarcastically, “I hope he survived the layoffs.”
“So look, him doing positive things? Good. Him becoming a better person? Well, the baseline is pretty bad, so good for that as well,” Sagel said.
Sagel said if Judge Selna sticks with the four-level departure “which we don’t agree with,” Avenatti deserves the high end of the sentencing range, not the low end.
Legal Affairs and Trials with Meghann Cuniff is a reader-supported project that utilizes my 20 years of reporting experience in traditional media to bring you in-depth news about high-profile cases and major legal issues. If you want to support my work, consider upgrading to a paid subscription.
Avenatti’s lawyers said he deserves credit for his behavior in prison, which Mani said can serve as an example for other defendants about the importance of how they move forward and “how they treat their fellow inmates.”
“Nothing Mr. Avenatti does, certainly, will take away the pain that his victims felt, and we certainly empathize with that. And Mr. Avenatti does as well. All he can do is try to treat the next person better than he treated them, and the BOP has said that he’s gone above and beyond in that regard,” Mani said.
He noted that the U.S. Probation Office recommended a six-level variance.
“That is still a lot of time. I don't think some attorney out there is going to think, ‘You know, Mr. Avenatti got eight years, so I’m going to commit this misconduct that I would not have otherwise,’” Mani said.
Farrand asked Selna to finalize the 121-month sentence, which would reduce to 81 months when credited for the 40 months already served in the Clifford sentence.
Farrand disputed Sagel’s claims that all of Avenatti’s conduct has been “despicable,” and said he “from the beginning of his career has had a part of him that is really seeking to make the world a better place. And he's not doing it for money.”
Farrand cited letters from two women who described how Avenatti helped reunite them with their children after they were taken into immigration custody. She also cited his work investigating singer and now-convicted child sex predator R. Kelly.
Gardner, who was the only client victim who spoke on Thursday, told Judge Selna she was traumatized by having to stand near her “abuser” after expecting “a life-changing settlement that would give me security and a chance to build my future.”
“Instead, Mr. Avenatti misappropriated my funds, and he dictated my fate without my consent based on choices that he made,” Gardner said.
Gardner said she believed “justice meant accountability” and Avenatti would pay clients what they were owed and forfeit his fees but, “Instead, I’ve learned that as a victim and as a defendant, he actually has a lot more rights than me.”
“I’m really condensed to this statement,” she said.
Meanwhile, “He’s flooded the docket with thousands of filings.”
Gardner recalled being cross-examined by Avenatti when he represented himself in his trial in summer 2022, which ended in a mistrial after the U.S. Department of Justice disclosed financial information to Avenatti from his law firm files that the judge said he should have had before trial.
“Mr. Avenatti introduced documents to me that I’ve never seen before. It was in a dynamic to confuse me as well as confuse the court. I bring this up because Michael Avenatti is a legal predator,” she said.
Gardner was living in her car when she met Avenatti and secured $2.75 million from professional basketball player Hassan Whiteside. Avenatti lied to Gardner about the money and used $2.5 million to buy a jet with another client. He sent her 15 payments totaling $218,000 between March 2017 and his arrest in March 2019.
Phan’s friend Long Tran hired Avenatti amid the height of his fame in 2019 to negotiate Phan’s departure from the cosmetics company Ipsy. Tran testified in trial that he asked Avenatti in 2018 if he’d like to borrow an armored Chevrolet Suburban B-6 with electric door handles, designed to thwart grenades, landmines and assault rifles, as he dealt with intense media attention amid his lawsuits against Trump on behalf of Clifford.
Johnson is Avenatti’s earliest victim, having hired him in 2012 to sue Los Angeles County after he became a paraplegic during a suicide attempt in jail following abuse by guards and inmates. Avenatti secured a $4 million settlement in 2015, then paid Johnson $900 to $1,900 every month for four years while lying to him about the status of the settlement. Johnson lost his Social Security benefits after Avenatti didn’t respond to the office’s questions about the settlement.
Barela is a businessman whom Avenatti secured a $1.6 million settlement in a civil suit. But Avenatti never gave Barela his share of the money. Instead, he lied to Barela for months as Barela continued to spend time at his law firm and once hosted a watch party for Avenatti’s appearance on the news show “60 Minutes” in 2018.
Only Gardner and Tran attended Thursday’s hearing.
Avenatti never entered into a plea agreement with the U.S. Attorney’s Office in the California case. Instead, he pleaded guilty to four counts of wire fraud and one count of obstructing the due administration of the internal revenue laws in an open plea, and prosecutors moved to dismiss his remaining 31 charges.
Judge Selna on Thursday orders him to pay $5.9 million in restitution, including $899,342 to Johnson, $1,332,585 to Gardner, $450,887 to Barela, $721,239.28 to Phan and $1.5 million to the Internal Revenue Service, which is for $1.5 million it paid Phan.
Selna said the new sentence warrants a comment he included in his original sentence: “As is the case with most human beings, there is the ability to do great good on an individual level or even a national or global scale. But there is also the ability to do great evil through willfully inflicting great harm on others through greed, arrogance, lying, uncaring dealing with others and blind-sightedness. As noted above, Avenatti has done many noble and good things in his life, some reflected in this case. But he has also done great evil for which he must answer. His actions in this case and in the relevant conduct show an abandonment of some of the most basic principles of fairness. That is all the more tragic where he received a fine education and achieved academic excellence, was presented with challenging opportunities at major law firms, and had the opportunity to build a series of his own successful law firms. It is now time for him to pay his debts to his victims, the Government, and to society in general.”
Thursday was Sagel’s last day with the U.S. Attorney’s Office, where he’s worked for 26 years. He is among dozens of prosecutors who’ve resigned since President Donald Trump appointed Bill Essayli as the interim U.S. attorney in Los Angeles, which includes the branch office in Santa Ana.
Sagel had been leading the office’s Corporate and Securities Fraud Strike Force, which disbanded shortly after Essayli took over.
Deposition videos:
In other Avenatti news, I have 5 1/2 hours of video on my YouTube channel of his deposition in 2015 in a lawsuit with his former clients over a $39 million settlement.
Court documents:
May 6 Avenatti’s defense sentencing memo
May 7 Prosecutors’ sentencing memo
May 16 Avenatti’s response to prosecutors
May 16 Prosecutors’ response to Avenatti
May 21 Alexis Gardner’s victim impact statement
Previous articles:
Thank you for supporting my independent legal affairs journalism. Your paid subscriptions make my work possible. If you’re not already a paid subscriber, please consider purchasing a subscription through Substack. You also can support me through my merchandise store and by watching my YouTube channel. Also, follow me on Facebook and Instagram as I grow my Meta presence. Thank you!