Michael Avenatti is sued for allegedly siphoning paraplegic's $4 million settlement

[June 14, 2019]  By Jonathan Stempel

(Reuters) - Michael Avenatti, the lawyer who represented porn star Stormy Daniels in lawsuits against U.S. President Donald Trump, has been sued by a paraplegic former client who accused him of siphoning away a $4 million settlement he had won.

Geoffrey Johnson is seeking at least $9.5 million, plus punitive damages, from Avenatti and several former colleagues in his civil lawsuit filed with the Orange County Superior Court in California.

"I never thought I would get victimized by my own attorney," Johnson, who uses a wheelchair, said at a press conference on Thursday. "I wish he had just given me my money."

Johnson's claims are also part of federal prosecutors' criminal case against Avenatti, who has pleaded not guilty to wire fraud, bank fraud, extortion and other charges, including defrauding other clients, in California and New York.

"Mr. Johnson's claims are categorically false and frivolous, and his case will be thrown out of court," Avenatti said in an email.

Avenatti drew national attention through his representation of Daniels, whose real name is Stephanie Clifford, in lawsuits against Trump and the president's former lawyer Michael Cohen, and briefly flirted with a 2020 White House run.

SUICIDE ATTEMPTS

Johnson said he obtained the $4 million settlement with Los Angeles County in January 2015 over injuries he sustained by jumping from an elevated floor in a downtown Los Angeles jail, in the second of two attempted suicides in August 2011.

He said he had mental health issues when he was wrongly arrested in April 2011, and tried to kill himself after enduring abuse by sheriff's deputies and other inmates at the jail.

The June 11 complaint accused Avenatti of draining nearly all of the $4 million settlement, while paying Johnson roughly $1,900 a month to lull him into thinking his money was safe.

Johnson also said Avenatti lied to the Social Security Administration about the monthly payments, costing him needed supplemental benefits.

"On a 1-to-100 scale, the despicability of his conduct ranks 1,000," Johnson's lawyer Daniel Callahan said at the press conference, referring to Avenatti. "It is off-the-charts bad."

Johnson also accused Avenatti's former colleagues Michael Eagan, Jason Frank and Scott Sims at the Eagan Avenatti law firm of covering up his activities.

The firm filed for bankruptcy protection in March, and there has been litigation among its former lawyers.

Lawyer Michael Avenatti speaks as he departs federal court in the Manhattan borough of New York, New York, U.S., May 28, 2019. REUTERS/Carlo Allegri

Eric George, a lawyer for Frank, called him "as much a victim of Michael Avenatti as anyone else. It is regrettable that Mr. Johnson's lawyers are misdirecting their claims."

Sims, in an email, said he has evidence that Avenatti "stole Mr. Johnson's settlement money," and alerted federal authorities. "We are appalled by Mr. Avenatti's conduct and hope that Mr. Johnson obtains justice against Mr. Avenatti," he said.

Eagan was not immediately available for comment.

"PILE ON"

Prosecutors had in April said Avenatti diverted some of the $4 million to finance his coffee shop business and a lavish lifestyle, and gave Johnson only about $124,000.

In his email, Avenatti said Johnson would have been convicted "but for my assistance," and had previously acknowledged in writing that he had always acted ethically when representing him.

He called the lawsuit "part of a 'pile on' publicity stunt to smear me."

In addition to the $4 million and punitive damages, Johnson is seeking at least $500,000 for lost Social Security benefits and $5 million for severe emotional distress and other damages.

The criminal case also accuses Avenatti of trying to extort more than $20 million from Nike Inc by threatening to expose what he called its improper payments to college basketball recruits, and misappropriating from Daniels nearly $300,000 of payments for her memoir.

If convicted on all charges, Avenatti could face more than 400 years in prison, but would likely face a lesser punishment.

(Reporting by Jonathan Stempel in New York; editing by Richard Chang, Susan Thomas and James Dalgleish)

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