Celebrity lawyer Michael Avenatti has now been accused of embezzling almost $2 million after winning a lucrative settlement for the former girlfriend of NBA player Hassan Whiteside.
Avenatti was acting as the attorney for Alexis Gardner, 27, and managed to negotiate a $3 million deal for the actress and barista.
$2.75 million of the settlement was wired by Miami Heat player Whiteside, 29, to a trust account set up by Avenatti in January 2017.
Michael Avenatti is accused of embezzling payments made by NBA player Hassan Whiteside of the Miami Heat that were wired to the lawyer for them to be passed along to his ex-girlfriend
Although Avenatti was entitled to $1 million in legal fees, he did not tell Gardner, his client, about the payment and then allegedly misrepresented the terms of her agreement with Whiteside.
Prosecutors allege he ended up funneling $2.5 million into the bank account of a law firm owned by an associate so he could buy his share of a small private jet.
Avenatti then went on to tell Gardner that Whiteside's first payment was for legal fees. He promised that she would be receiving monthly installments over a period of eight years according to Fox News.
Eleven transfers were made to Gardner for a total of $194,000 before the money suddenly stopped in 2018.
Whiteside and Gardner confirmed the settlement in a statement.
'We entered into a mutually agreed upon settlement more than two years ago following the end of our relationship; a settlement that reflected Alexis' investment of time and support over a number of years as Hassan pursued a career in the NBA. It is unfortunate that something that was meant to be kept private between us is now being publicly reported. We have both moved on amicably and wish nothing but the best for each other.'
Meanwhile, Avenatti pushed back on accusations he acted illegally or inappropriately.
Prosecutors allege $2.5million was hidden by Avenatti to buy a share of of a small HA-420 private jet (file photo)
'No monies were ever embezzled from anyone and I look forward to all of the relevant documents and facts being presented at trial,' he told the Los Angeles Times. 'The clients complaining are a very small fraction of the thousands of clients I have serviced over my nearly 20 year career.'
The grand jury indictment also refers to four other clients from which Avenatti allegedly stole millions of dollars, including mentally ill, paraplegic Geoffrey Ernest Johnson and YouTube makeup artist Michelle Phan.
Whiteside paid $2.75 million to Michael Avenatti in January 2017 - the money was supposed to go to his former girlfriend, Alexis Gardner
In Johnson's case, similar behavior is alleged to have occurred.
After negotiating a $4 million settlement in 2015, Avenatti allegedly hid the cash from Johnson, pretending the money couldn't be paid out and doled out as little as $1,000 per month as 'advances'.
It was revealed by DailyMail.com that Avenatti had allegedly defrauded Johnson in a debtor's examination hearing last month, where the lawyer was grilled by a partner at his former firm over his assets.
Immediately after the hearing - knowing that the story would get out - a panicked Avenatti drove to Johnson's house to try to cover up the alleged fraud, making him sign the testimonial that praised his services, Johnson's lawyer told DailyMail.com.
The embattled attorney then tweeted out a copy of the testimonial when the indictment dropped on April 11 as proof of his innocence in mishandling clients' money.
Michael Avenatti made his mentally-ill paraplegic client sign a positive testimonial about him when he
