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Trial begins for Michael Avenatti, accused of defrauding adult-film star Stormy Daniels

Former attorney Michael Avenatti arrives for his criminal trial at the U.S. District Court in Manhattan on Jan. 24. (Brendan Mcdermid/Reuters)
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NEW YORK — Michael Avenatti, who rose to prominence representing an adult-film actress who claimed an affair with former president Donald Trump, stole $300,000 from his famous client to bankroll personal expenses as his business was collapsing, federal prosecutors said at the start of Avenatti’s trial on Monday.

In his opening statement, Assistant U.S. Attorney Andrew Rohrbach said Avenatti, an attorney, allegedly rerouted to himself installments of the $800,000 advance Stormy Daniels was owed for her book “Full Disclosure,” which detailed her life’s story, her dealings with Trump and pressure she allegedly faced to stay quiet about her ties to him.

Avenatti defended Daniels for years in her battles against Trump — on Twitter, on television and to reporters. But in his business dealings with her, Rohrbach told jurors, “He lied to everyone involved over and over and over again.”

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The federal trial is Avenatti’s third in the past two years. He was convicted of defrauding a youth basketball coach and sports apparel giant Nike, and given a 30-month sentence. An embezzlement trial in California was interrupted by a mistrial.

The Daniels trial is expected to be closely watched because it will examine Avenatti’s connection to the scandal that made him famous as an outspoken critic of Trump’s alleged behavior.

Daniels, whose legal name is Stephanie Clifford, is expected to testify as early as Wednesday. Among those in the courtroom on Monday was Michael Cohen, the former Trump attorney who pleaded guilty to violating campaign finance laws by paying Daniels to keep quiet about the alleged affair during the 2016 presidential campaign.

Trump has always denied the affair with Daniels and has distanced himself from the hush money payment.

Read The Washington Post's 2018 profile of Michael Avenatti

Avenatti’s profile skyrocketed with his representation of Daniels, who went public after the election about the alleged sexual encounter with Trump in 2006 and the hush money Cohen gave her. Yet as Avenatti gained notoriety with daily television appearances and his filing of a lawsuit against the president, his money problems were mounting, prosecutors said.

“You’ll learn [Avenatti] was desperate for money,” Rohrbach argued to the jury. “His law firm was in debt. He had trouble making payroll and paying for his office space, and the defendant had personal financial problems, too.”

Avenatti is charged with wire fraud and with aggravated identity theft for allegedly reproducing Daniels’s signature on a letter that said she wished to have her funds sent to a new bank account. Prosecutors have said Daniels endorsed no such request. Avenatti’s attorney, Andrew John Dalack, told jurors in his opening statement that the case amounts to no more than a contract dispute.

“What we have in this case, members of the jury, is a disagreement, a fee dispute between an attorney and his disgruntled former client who wanted all the benefits of zealous, fierce and loyal representation without having to pay for it,” Dalack said in U.S. District Court in Manhattan.

Daniels herself was in financial trouble, according to Dalack, which drove her to claim that Avenatti had stolen from her. Having lost her 2018 lawsuit against Trump, in which she tried to undo a nondisclosure agreement she was paid to sign, she owed $300,000 in attorney fees and concocted a story “to get [Avenatti] back and avoid paying.” She also allegedly blamed Avenatti for having lost the lawsuit against Trump.

“It made her mad,” Dalack said. “The evidence will show she didn’t want to pay it.”

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The first witness to testify was literary agent Luke Janklow, who has arranged book deals for a number of prominent clients, including Daniels. Janklow was called to support the prosecution’s argument that Avenatti played interference between the agent and Daniels when it came to facilitating her advance payments.

Janklow described having admired Avenatti in 2018, when the deal was hammered out, because of Avenatti’s crusade against Trump.

Avenatti “was a folk hero at that point ... during the time when the country became very divided,” Janklow said. “He was very aggressive and very effective on television.”

Prosecutors maintained that Avenatti told Janklow not to reach out to Daniels directly about the payment process. “I was instructed by Mr. Avenatti not to discuss finances with her,” Janklow confirmed in his testimony.

Cross-examination revealed the two men — who were introduced by CNN anchor Anderson Cooper, another client of Janklow’s — had a friendly, nonantagonistic relationship. Text messages between Avenatti and Janklow show the two sometimes venting about Daniels being difficult throughout the book process, including when she violated her agreement to avoid media interviews until publishing.

When it exploded into public view, the ordeal over the Trump campaign’s payments to Daniels led to the unraveling of Cohen’s fierce loyalty to Trump, his longtime employer. Now, Cohen aligns himself with other Trump defectors and critics, including Daniels.

“I speak to [Daniels] on a regular basis,” Cohen told reporters at the courthouse Monday. “We’ve actually become friends.”

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