The 48-year-old was arrested last month on a criminal complaint in which prosecutors said he stole money from one client and used bogus tax returns to obtain a series of loans, but the indictment announced Thursday broadens those charges.
A hearing was set for 9 a.m. PDT Thursday, when federal prosecutors will release more information in the case.
In one of these cases, Avenatti represented Geoffrey Johnson, a paraplegic on disability, against the County of Los Angeles where a $4 million settlement was reached in 2015.
The 61-page indictment (pdf) was filed late on April 10 and detailed how Avenatti failed to meet his tax obligations, stole from his client, and used the money to support his racing team, coffee shops, and a private jet. In a press conference, Hanna confirmed that the jet was seized by federal authorities on Wednesday.
" 'There have been collection efforts going on for many, many years, ' said Nick Hanna, the USA attorney in Los Angeles". He's now free on bail. "I am entitled to a FULL presumption of innocence and am confident that justice will be done once ALL of the facts are known", he wrote. Avenatti has said he is innocent. An indictment in that case is expected soon.
The indictment is consistent with The Daily Caller News Foundation's previous reporting on Avenatti's management of Tully's coffee chain.
On the day of his arrest, federal agents executed search warrants at Avenatti's Century City apartment, his Echo Park law office and the Yorba Linda home of Judy Regnier, the office manager at Eagan Avenatti, according to the US attorney's office.
Under State Bar of California rules of professional conduct, a lawyer must promptly notify a client of the receipt of any funds they are entrusted to hold for the client and turn over the money at the client's request.
Adult film actress Stephanie Clifford, also known as Stormy Daniels, speaks to media alongside Avenatti, her lawyer, outside a federal court in the Manhattan borough of New York City on April 16, 2018. But when Johnson was in escrow to purchase the property, Avenatti falsely said he had not received the settlement funds, the indictment said.
Until last month, Avenatti had only provided $124,000 over 69 payments to Johnson, the indictment said.
He has denied wrongdoing, and says the truth will come out.
The new indictment also alleges that Avenatti failed to file personal income tax returns for four years and failed to filed tax returns for his two law firms for three years.
According to the indictment, Avenatti withheld Tully's employment taxes from the IRS, and directed employees to deposit cash receipts into an account for Avenatti's auto racing company.
The indictment alleges that Avenatti lied to a court overseeing the bankruptcy of Eagan Avenatti.
In addition to Client 1, Hanna said, Avenatti followed a similar pattern with four other clients.