Michael Avenatti, the outspoken attorney representing Stormy Daniels and a potential 2020 presidential candidate, and his companies owed millions of dollars in unpaid taxes and judgments while Avenatti lived a luxe life, according to a new report.
Avenatti said back in July that he would "be happy" to put his tax records and background against President Donald Trump's background and tax records, but a new Daily Beast report shows he personally owed at least $1.2 million in federal taxes in addition to his corporate debts. One of the liens filed in February 2018 was for $308,396, and an August 2015 filing showed a balance of $903,987.
While Avenatti and his companies owed millions in corporate debt and unpaid taxes, he lived a luxurious lifestyle flying around the world to race cars with a Saudi prince and paying for his wife and their friends to stay in expensive villas in Cabo San Lucas, Mexico, according to civil court filings.
The court documents that were reviewed by the Daily Beast pertained to Avenatti, his former law firm Eagan Avenatti, and Global Baristas, his former company where he was majority owner of the Seattle-based Tully’s coffee chain. The documents revealed Avenatti and his companies owed millions in unpaid federal and state taxes in Washington and California in addition to hundreds of thousands of dollars in past-due rent to landlords.
A Newport Beach landlord began eviction proceedings last month against Eagan Avenatti in Orange County Superior Court. The real-estate entity claims Eagan Avenatti failed to make rent for three storage spaces and a 8,371-square-foot suite, totaling more than $107,415 for the months of July and August. (A lawyer representing the Irvine Company, which manages the rentals, declined to comment.)
On Oct. 18, the landlord filed court papers indicating that Eagan Avenatti owes $213,253 in rent as of this month.
Avenatti told The Daily Beast he divested his interest in Eagan Avenatti within the last 12 months and that he now operates under Avenatti & Associates. "None of those obligations are my responsibility," he said, when asked about the eviction case. Avenatti said he would forward this publication’s queries to the firm’s new owner, but declined to name them.
Yet in a Sept. 7 answer to the landlord’s complaint, signed by Avenatti himself, he claimed Eagan Avenatti made repairs to the suite and subtracted the cost from the rent. The firm offered to pay the rent due, Avenatti continued, but that the landlord "would not accept it."
A Los Angeles Superior Court judge is expected to make a ruling on a separate case Monday brought by Jason Frank, who used to work at Eagan Avenatti. He claims the firm owes him millions in unpaid compensation. Franks settled the case for $4.85 million, and records show Avenatti guaranteed he'd receive payment. But the 2020 hopeful didn't wire the first payment, prompting a U.S. bankruptcy court judge to enter a $10 million judgment against him.
"Nothing’s gonna happen on Monday, so you guys are wasting your time," Avenatti said when asked for a comment. "Jason’s claims are completely bogus." He then claimed Frank owes him $10 million for supposedly stealing his client. Avenatti referenced the alleged client-stealing earlier this year in his bankruptcy filing for Eagan Avenatti, claiming Frank and two other former colleagues were fired in May 2016 "after they were discovered to have been forming their own competing law firm." He went on to say they "took substantial business with them" when they left.
Frank's lawyer, Eric George, pushed back against Avenatti's claim in a statement to the Daily Beast, saying it had no merit.
"Mr. Avenatti’s comments are delusional, and should fool no one," George said in a statement. "To return to reality, he negotiated and signed a written agreement that provided for $10 million to my client, and that released precisely the frivolous claims he’s concocting now. Mr. Avenatti can dissemble to the press as much as he wants—ultimately, he will lose this latest court proceeding."
Avenatti tweeted Sunday night that there was "a lot of misinformation being thrown" about his tax returns and that he would release them if he ran for office.
A lot of misinformation being thrown about re my tax returns. Be clear – on Aug. 12 (This Week interview on ABC), I stated I would release my tax returns if I ran. On Sept. 28 (Texas Tribune interview), I stated the same thing. Both on video. My position remains the same.
— Michael Avenatti (@MichaelAvenatti) October 22, 2018