Michael Avenatti Is Found Guilty of Stealing From Stormy Daniels

Four years ago, Stormy Daniels and Michael Avenatti presented a united front against then-president Donald J. Trump.

Ms. Daniels, a pornographic film actress, said she had been paid $130,000 just before the 2016 presidential election to keep quiet about a sexual encounter with Mr. Trump that had occurred years earlier. Her lawyer, Mr. Avenatti, filed a lawsuit in 2018 saying a nondisclosure agreement accompanying that payment was void because Mr. Trump had not signed it.

But even as he condemned “thuggish behavior” aimed at Ms. Daniels by “people in power,” Mr. Avenatti was stealing from her, a jury in Manhattan found on Friday.

After deliberations that stretched across three days and at one point appeared to reach an impasse, jurors convicted Mr. Avenatti of wire fraud and aggravated identity theft, agreeing with accusations that he used a bogus letter to trick Ms. Daniels’s literary agent into sending him almost $300,000 in publisher’s payments meant for her.

The conviction in Federal District Court is the most recent in a series of blows to Mr. Avenatti, a brash lawyer from California who became a household name while representing Ms. Daniels, appearing regularly on television and hurling Twitter gibes at Mr. Trump.

For a time Ms. Daniels and Mr. Avenatti were stars in what was sometimes called “the resistance” to Mr. Trump’s presidency and policies. Some believed the two could bring down Mr. Trump, who denied Ms. Daniels’s allegations.

Seizing on her widening renown, Ms. Daniels, whose legal name is Stephanie Clifford, signed an $800,000 contract to write a book for St. Martin’s Press called “Full Disclosure.” Mr. Avenatti briefly flirted with the idea of running for president. But their alliance dissolved amid acrimony in early 2019 after Ms. Daniels accused Mr. Avenatti of stealing.

Since then, Mr. Avenatti has been a criminal defendant in several cases. He was convicted in 2020 of trying to extort millions of dollars from Nike. A lawyer representing him in that case later filed a notice of appeal.

Mr. Avenatti was accused in a separate case of stealing millions of dollars from five clients, including a paraplegic man who won a $4 million settlement from Los Angeles County, and lying about his business and income. That prosecution ended in a mistrial last year after a judge ruled that the government had withheld financial data from the defense.

If Mr. Avenatti thought after that result that he could salvage his reputation as a populist lawyer who helped underdogs, then his conviction would appear to all but extinguish that prospect.

“The defendant was a lawyer who stole from his own client,” a prosecutor, Robert Sobelman, told jurors during the government’s closing argument on Wednesday. “She thought he was her advocate, but he betrayed her and he told lies to try to cover it all up.”

During his closing argument, Mr. Avenatti, who represented himself during the trial, told jurors that there was insufficient evidence to show that he had “intended to defraud” or had “intended to harm” Ms. Daniels.

“It is the government’s burden, it is their obligation, to show you that I possessed fraudulent intent and lacked good faith,” Mr. Avenatti said, adding: “They have not done that.”

During the trial prosecutors presented evidence that Mr. Avenatti had emailed a letter bearing what purported to be Ms. Daniels’s signature to her literary agency, Janklow & Nesbit Associates, directing that payments from St. Martin’s be sent to a bank account controlled by Mr. Avenatti.

Prosecutors said Mr. Avenatti spent that money on his law firm’s payroll, plane tickets, restaurants and a monthly lease payment of about $3,900 for a Ferrari. Although he eventually sent Ms. Daniels about half of the money he received, prosecutors added, she never saw the rest.

Ms. Daniels testified that she had not given Mr. Avenatti permission to take any of her payments from St. Martin’s. And she said he had repeatedly lied to her as she asked for his help in obtaining what she believed was money the publisher owed her.

Dozens of text messages between the two were displayed on a screen inside the courtroom, showing that Mr. Avenatti promised to help Ms. Daniels, at one point saying he was “threatening litigation” against St. Martin’s.

His scheme came to light in February 2019 after Ms. Daniels spoke with people at her agency and publisher. Three months later, Mr. Avenatti was indicted.

The trial had several unusual twists. On the second day of testimony, the judge overseeing the case, Jesse M. Furman, granted a request from Mr. Avenatti that he be allowed to act as his own lawyer, giving him the right to cross-examine witnesses.

That included Ms. Daniels, his former client and comrade. Mr. Avenatti concentrated on Ms. Daniels’s interest in supernatural matters, asking whether a “dark entity” had once entered her home in New Orleans through a “portal” and about her claim that she could speak with people who had died.

Ms. Daniels testified that a medium told her about the visit by the dark entity and acknowledged saying that she believed she could talk with the dead — though she could not explain exactly how, saying: “It just happens sometimes.”

She also explained her participation in a project called “Spooky Babes,” described on its website as a group of “investigators, occultists, psychics, and healers” that examines paranormal activity including “poltergeist” phenomena, “shadow figures” and physical attacks from invisible assailants.

Other government witnesses included Judy Regnier, the former office manager at Mr. Avenatti’s law firm, who testified that the firm had been short on money; Elizabeth Beier, an editor at St. Martin’s, who said that to her knowledge Mr. Avenatti had never threatened the publisher with legal action; and Luke Janklow, the president and managing director at Janklow & Nesbit.

Mr. Janklow compared Mr. Avenatti’s stature in 2018 to that of a “folk hero” fighting for those who had not voted for Mr. Trump, and said he had accepted as legitimate the fake letter purporting to be from Ms. Daniels in part “because it came from her attorney.”

Several times during the trial, Mr. Avenatti brought up an “attorney-client fee contract” between him and Ms. Daniels that said he would provide legal services for $100. That contract also said that if he helped Ms. Daniels “finalize” a book deal he would be entitled to “a reasonable percentage” of the proceeds — a figure that was “to be agreed upon between clients and attorney.” Ms. Daniels testified that no such agreement had been reached.

Still, Mr. Avenatti told Judge Furman that he was planning a defense based on the premise that he could not be convicted of stealing from Ms. Daniels because he genuinely believed that their agreement gave him a just claim to some of the $800,000 from St. Martin’s.

Although Mr. Avenatti had contemplated presenting as many as half a dozen witnesses in addition to testifying himself, he rested his case without calling anyone to the stand.

But during his closing argument, he floated the idea that he had deserved money from Ms. Daniels.

He pointed to thousands of hours of legal work on her behalf and what he described as hundreds of thousands of dollars in costs “advanced” to Ms. Daniels by his firm, including payments to arrange 24-hour security for her.

Mr. Avenatti also told jurors that he had been “instrumental” in helping secure the book contract with St. Martin’s, suggesting that Ms. Daniels’s story had been of interest to the publisher in part because of her legal fight with Mr. Trump — “the most powerful person on the planet.”

“I agreed to take on that fight for Ms. Daniels,” Mr. Avenatti said. “But I didn’t agree to do it for free.”