By Jonathan Stempel
NEW YORK (Reuters) – A federal judge on Wednesday revoked Michael Avenatti’s bail after he was accused of fraudulently hiding $1 million from creditors, threatening a separate trial of the celebrity lawyer and critic of U.S. President Donald Trump on charges he tried to extort Nike Inc
U.S. District Judge James Selna remanded Avenatti to federal custody at a hearing in Santa Ana, California, where prosecutors had charged him last March with 36 criminal counts, including defrauding clients out of millions of dollars.
Prosecutors said Avenatti received the $1 million last April 30 as part of a client settlement, but concealed it from his second ex-wife and other creditors to whom he owed more than $11 million.
Avenatti is awaiting trial on three federal indictments and has pleaded not guilty to all charges.
In the Nike case, Avenatti was charged in Manhattan with threatening to publicly accuse the sportswear company of improperly paying families of college basketball recruits unless it paid him up to $25 million to conduct a probe plus $1.5 million to his client, a youth basketball coach.
A Jan. 21 trial is scheduled, but “the arrest of Mr. Avenatti this close to the trial has essentially thrown the trial into chaos,” U.S. District Judge Paul Gardephe, who oversees the case, said in a telephone conference.
Another conference is scheduled for Wednesday afternoon.
Matthew Podolsky, a prosecutor in the Nike case, said he would not oppose a one-week trial delay, and that Avenatti could be moved to Manhattan for the trial even if bail were revoked.
Avenatti, 48, is best known as a Trump adversary and for representing porn actress Stormy Daniels, who received hush money before the 2016 presidential election not to reveal an alleged sexual encounter with the president, which Trump denies.
Earlier Wednesday, Gardephe refused to dismiss the Nike prosecution, which Avenatti called “vindictive” and payback for his animosity toward Trump.
Gardephe found no evidence that the prosecution was brought maliciously or at Trump’s behest, noting that it was Nike that alerted prosecutors to the alleged extortion.
“Avenatti is being prosecuted for activities wholly unrelated to the political arena,” Gardephe wrote.
In the California case, Avenatti was also charged with lying to the Internal Revenue Service, committing bank fraud and falsely testifying in a bankruptcy case involving his former law firm. He faces a possible 335 years in prison.
Avenatti was also charged in Manhattan with stealing nearly $300,000 from Daniels, representing proceeds from her book contract.
(Reporting by Jonathan Stempel in New York; editing by Cynthia Osterman and Tom Brown)
