The California State Bar, has issued a “consumer alert” concerning disgraced attorney Michael Avenatti, saying it was moving to suspend him from the practice of law because his alleged conduct “poses a substantial threat of harm to clients or the public.”
The sudden development further accentuated Avenatti’s dramatic public fall from grace as he faces numerous federal criminal charges in both California and New York courts for allegedly trying to blackmail the clothing giant Nike, impersonating a client, misappropriating client funds for personal purchases, and “related matters.”
“The State Bar of California has filed a petition to enroll this licensee on interim inactive status, alleging that the licensee’s conduct poses a substantial threat of harm to clients or the public,” the State Bar said on its website, noting Avenatti is presumed innocent but that it expects to ultimately disbar him entirely from the practice of law. “The petition involves a charge that the licensee engaged in a major misappropriation of client funds.”
Reached by Fox News, Avenatti responded, “The action by the CA State Bar is nothing more than a ‘pile-on’ and was entirely expected in light of the pending charges. I offered to cooperate with the bar and instead they decided to issue a press release as a stunt. I look forward to being fully exonerated by the facts.”
According to Fox, the nearly 600-page petition to initiate Avenatti’s involuntary suspension, focuses primarily — but not exclusively — on the case of former Avenatti client Gregory Barela, who has alleged the celebrity lawyer illegally withheld settlement funds in a “Ponzi-like” scheme and then repeatedly lied about it.
Text messages and email conversations between Avenatti and Barela, exclusively obtained by Fox News earlier this year, documented the client’s persistent efforts for several months last year to locate and obtain the funds pursuant to a settlement agreement, which resulted from the client’s intellectual property dispute with an out-of-state company.
And financial documents reviewed by Fox News show that the money had been wired to an account designated by Avenatti on Jan. 5, 2018, but that Avenatti continued to dodge increasingly frantic questions from Barela as to where “his money” was.
The California bar charged that Avenatti provided Barela a forged settlement agreement, noting that in doing so, Avenatti still owes Barela “more than $700,000.” The petition to disbar went on to say that, the evidence against Avenatti was “clear and convincing,” and that Avenatti had provided no defense or even response to the bar’s investigators.
“We are grateful that the California State Bar has taken action to investigate and suspend Mr. Avenatti from the practice of law,” attorney Steven Bledsoe, who represents Barela in his civil case against Avenatti, told Fox News. “Mr. Avenatti has stolen money from multiple clients, violated their trust, and should never be allowed to practice law again.”
Avenatti has “refused to provide an accounting concerning the settlement funds,” as required by California law, Bledsoe said. “Mr. Avenatti has had two months to answer the simple question of whether he received the initial settlement payment for Mr. Barela and he has refused to answer. In the meantime, the settling party has provided us with wire-transfer confirmations showing that they made the settlement payment into Mr. Avenatti’s client trust account, at Mr. Avenatti’s direction.”