Date: June 16, 2022 Contact: firstname.lastname@example.org Michael Avenatti pleaded guilty today to five felony offenses and admitted that he engaged in a scheme to defraud four of his legal clients. Avenatti, who has been suspended by the State Bar of California, specifically pleaded guilty to four counts of wire fraud – each related to one of four matters in which he embezzled money that should have been paid to clients – and one count of endeavoring to obstruct the administration of the Internal Revenue Code. United States District Judge James V. Selna scheduled a sentencing hearing for September 19. As a result of today's guilty pleas, Avenatti faces a statutory maximum sentence of 83 years in federal prison. Avenatti admitted guilt in each of the four legal matters discussed in a federal grand jury indictment that charged him with embezzling money from clients. Avenatti admitted that he engaged in the conduct charged in the four counts of the indictment, which includes receiving money on behalf of clients into client trust accounts, misappropriating the money, and lying to the clients about receiving the money or, in one case, claiming that the money had already been sent to the client. The charge of endeavoring to obstruct the administration of the Internal Revenue Code is one of 19 tax-related offenses in the indictment. In relation to the tax count he pleaded guilty to today, Avenatti admitted that he corruptly obstructed and impeded the IRS's efforts to collect unpaid payroll taxes, which the government estimates amount to approximately $5 million and include payroll taxes that he been withheld from the paychecks of employees of the Avenatti-owned company that operated Tully's Coffee. After pleading guilty today, Avenatti still faces a total of 31 counts – six wire fraud charges, 18 tax-related charges, two counts of bank fraud related to alleged false statements he made in an attempt to obtain loans from a federally insured financial institution, one count of aggravated identity theft for misusing the name of a tax preparer in relation to the bank fraud scheme, and four counts of bankruptcy fraud related to alleged false statements he made after his law firm was forced into bankruptcy. The government is reviewing the case to determine how it will move forward after today's guilty pleas. In the event that the government elects to proceed on the remaining counts, Judge Selna will vacate the September 19 sentencing date. IRS Criminal lnvestigation conducted the investigation into Avenatti. The Office of the United States Trustee provided substantial assistance. Assistant United States Attorney Brett A. Sagel of the Santa Ana Branch Office and Ranee A. Katzenstein of the Major Frauds Section are prosecuting this case.