Avenatti dodges blow, jurors don’t hear about Nike

SANTA ANA -- Michael J. Avenatti appears to have dodged what could have been a devastating blow to his defense against client theft charges when a federal judge ruled Thursday that prosecutors could not tell the jurors about his conviction in New York for trying to extort $20 million from Nike Inc. or allegations that he stole another client's book advance.

Cross-examining his former paralegal Wednesday, Avenatti asked her about "other meetings" she had with prosecutors. After the jury went home, Assistant U.S. Attorney Brett A. Sagel told U.S. District Judge James V. Selna that those meetings were with prosecutors handling the New York cases. That opened the door to allow jurors hearing the client theft case in Santa Ana to hear about the New York cases, Sagel said.

But on Thursday morning, Selna told prosecutors they could refer to the New York cases only obliquely as "other matters."

Avenatti is accused of stealing $10 million from client settlement money. He is charged with 10 counts of wire fraud that could carry penalties of more than a decade in prison. USA v. Avenatti, 19-cr-00061 (C.D. Cal., filed April 10, 2019).

Testimony from his former paralegal, Judy Regnier, has consumed much of the past three days. Regnier has testified repeatedly that she moved money from client trust accounts into the firm's operating account only at Avenatti's direction. Some of that money went to Avenatti's ex-wife, or to purchase a private jet and other luxuries, prosecutors contend.

Avenatti has contended that Regnier is the lynchpin to the prosecution's case, not the clients who have testified that they never received their settlement money. But he questioned her about a $454 million judgment he won in a contingency fee in 2017 that was later slashed to zero and about other large verdicts and settlements he has won throughout the years, to show Eagan Avenatti LLP wasn't doing that badly financially. None of those cases are the subject of the prosecution's charges.

"What do these cases have anything to do with whether Mr. Johnson got paid his settlement money?" Sagel asked Regnier, to which Avenatti angrily objected as argumentative.

"Did Geoffrey Johnson have anything to do with any of those cases?" Sagel asked Regnier.

"No," Regnier said.

Johnson, a man left paraplegic after a stint in Los Angeles County Jail, testified earlier in the trial that Avenatti didn't pay the full $4 million he won until four years later and only on the day the attorney was indicted.

Relations between Avenatti and the prosecutors were especially heated. Outside the presence of the jury, Avenatti accused Sagel of being in league with Avenatti's former law partner, who is in litigation against Avenatti.

"The only person who keeps making this allegation is a convicted felon with no law license," Sagel shot back.