Judge seeks report on Avenatti accounts to consider mistrial

Accounting data from defunct Eagan Avenatti LLP was recovered over the weekend, prosecutors told a federal judge on Monday. U.S. District Judge James V. Selna told them he would need a "preliminary report" on the nature of the documents to consider a motion for mistrial filed by Michael J. Avenatti.

"I just need that piece of the puzzle to fully consider the motion and invite argument," Selna said.

Avenatti, defending himself against charges of stealing $10 million from five clients, has repeatedly complained that prosecutors never turned over seized data from the Tabs software, one of two accounting systems his law firm used. Avenatti wants the data to show that his clients did not have a full accounting of their case expenses.

Some legal observers have said the data likely would not impact the outcome of Avenatti's trial on 10 counts of wire fraud. In questioning his former clients and other witnesses, Avenatti has focused not on whether he stole money but on the fact that the clients didn't know how much they were owed. Some of the clients have said Avenatti never gave them a full accounting when their cases were settled.

Prosecutors had maintained they didn't know where the Tabs data was. But after Selna ordered them to work through the weekend, a prosecutor from the U.S. attorney's "taint team" that initially reviewed documents seized from Avenatti's law firm told the judge on Monday that a computer specialist was able to recover and open the database. Avenatti and his team could begin reviewing the documents by Monday afternoon, Assistant U.S. Attorney Patrick Fitzgerald said.

Over the weekend, Assistant U.S. Attorneys Brett A. Sagel and Alexander C.K. Wyman, who are prosecuting Avenatti, filed a request to admit into evidence statements Avenatti made during a bankruptcy hearing in June 2017 that they said "undermines his current claim about the 'need' to use Tabs, when defendant himself did not mention Tabs as a manner in which the firm maintained financial records."

Avenatti's trial is bifurcated. The first phase, nearing conclusion, centers only on the theft charges. A second phase, on tax and bankruptcy fraud charges, is set to begin in October. USA v. Avenatti, 19-cr-61 (C.D. Cal., filed April 10, 2019).