Court upholds Michael Avenatti conviction for defrauding porn star Stormy Daniels

By Jonathan Stempel

NEW YORK (Reuters) - A federal appeals court on Wednesday upheld the conviction of disgraced celebrity lawyer Michael Avenatti for defrauding former client Stormy Daniels, the porn actress who claimed to have had a sexual encounter with Donald Trump.

In a 3-0 decision, the 2nd U.S. Circuit Court of Appeals in Manhattan found "overwhelming" evidence of Avenatti's guilt, and rejected his arguments that the conviction was tainted by multiple errors made by the trial judge.

A federal public defender representing Avenatti did not immediately respond to a request for comment. A spokesman for U.S. Attorney Damian Williams in Manhattan declined to comment.

Avenatti, 53, was sentenced to four years in prison following his February 2022 conviction for wire fraud and identity theft.

Prosecutors charged him over an alleged scheme to steal nearly $300,000 in book contract proceeds from Daniels, whose real name is Stephanie Clifford, and forging her signature on a letter to her literary agent.

Daniels was paid $130,000 just before the 2016 presidential election not to discuss her alleged encounter a decade earlier with Trump, who won the election.

Trump has denied the encounter took place, and faces a scheduled March 25 trial in Manhattan on 34 felony charges related to the hush money payment.

In Avenatti's appeal, his lawyer said the trial judge improperly instructed jurors that the misappropriation of client funds was a "particularly serious" violation, and wrongly "shamed" a holdout juror in open court to change her mind.

But the appeals court called any error in instructing jurors "harmless in light of the overwhelming evidence introduced," including Avenatti's concealing the diversion of Daniels' funds and then repeatedly lying about where the money went.

The court also said prodding jurors need not be coercive, and the trial judge assured the holdout she should not feel pressure to change her mind because she was outnumbered.

Avenatti became a fixture on cable TV and Twitter, now known as X, in 2018 and early 2019 after he began representing Daniels, who sued Trump to get out of a nondisclosure agreement she claimed was void.

He is now serving a total of 19 years in prison, which also cover his February 2020 conviction for extorting Nike, and his June 2022 guilty plea to cheating four other clients, including a paraplegic, out of millions of dollars.

Avenatti is appealing the 14-year sentence imposed following the guilty plea. Last August, the 2nd Circuit rejected his appeal of the Nike conviction. Avenatti is eligible for release from prison in September 2035.

The case is U.S. v. Avenatti, 2nd U.S. Circuit Court of Appeals, Nos. 22-1242, 22-2550.

(Reporting by Jonathan Stempel in New York; Editing by Nick Zieminski, Noeleen Walder and Tomasz Janowski)