Paraplegic Sues Avenatti For Siphoning Away $4M Settlement

By Emma Cueto

Law360 (June 13, 2019, 10:45 PM EDT) -- A paraplegic former client of embattled attorney Michael J. Avenatti has filed suit against the lawyer and several former attorneys at his now-defunct firm, alleging Avenatti stole a $4 million settlement he negotiated for the client against Los Angeles County.

Geoffrey E. Johnson, who alleges he was paralyzed after attempting to kill himself over mistreatment in Los Angeles County jail, says Avenatti hid the fact that the county had already paid the entire settlement into a trust account, stringing Johnson along for years by saying the money was delayed when in reality Avenatti pilfered the funds.

Also named in the suit, filed on Tuesday, are Eagan Avenatti LLP's former managing partner Michael Q. Eagan and former attorneys Jason M. Frank and Scott Sims, who both allegedly worked on Johnson's case. Johnson is seeking $9.5 million in damages.

"I am appalled by the egregious, unethical conduct of Michael Avenatti and his band of attorneys who took an oath to zealously represent Mr. Johnson. Our client has been abused over and over, and we will get justice for Mr. Johnson," Daniel J. Callahan, an attorney for Johnson, said in a statement Thursday.

The complaint takes several swipes at Avenatti, describing him as a one-time "cable news fixture" who was a presidential hopeful "for about five minutes" who is now facing up to 300 years in prison. It also says Johnson first learned Avenatti had ripped him off in an indictment filed against Avenatti in April, one in a series of criminal charges the attorney is facing.

Avenatti told Law360 that the allegations Johnson raised were "old news."

"Mr. Johnson's claims are categorically false and frivolous, and his case will be thrown out of court," Avenatti said in a statement. "He previously agreed on numerous occasions, including in multiple detailed writings ... that I conducted myself ethically at all times, he was kept informed about all aspects of his case, he was provided all monies when due ... and he was extremely thankful for my assistance, which was provided after no other lawyer would take his case."

Avenatti added that without the representation he provided and the expenses he paid for him, Johnson "would have been destitute six years ago." He also said Johnson is being used by his current attorney, Callahan, whom Avenatti said is a "Trump supporter." Avenatti first became famous as a critic of President Donald Trump while representing Stormy Daniels, who claimed to have been paid to keep quiet about an affair with Trump.

Sims said he and Frank, who both have their own legal disputes with Avenatti since leaving his firm, were unaware of Avenatti's alleged theft of the settlement funds at the time and alerted the authorities as soon as they learned of it.

"In the course of our multiyear fight against Michael Avenatti, we recently discovered evidence that he stole Mr. Johnson's settlement money," Sims said. "We promptly reported what we learned to federal authorities, confronted Mr. Avenatti in open court, and informed Mr. Johnson's family. We are appalled by Mr. Avenatti's conduct and hope that Mr. Johnson obtains justice against Mr. Avenatti."

Eagan did not respond Thursday to a request for comment. Contact information for the former Eagan Avenatti office manager, who is also named in the suit, was not available Thursday.

Johnson alleges that Avenatti and other attorneys at the firm began representing him in 2012, a year after he was first arrested while suffering from mental health issues and held for months in the county jail. Due to abuse by the sheriff's deputies, Johnson claims, he tried to kill himself by jumping from an elevated floor, resulting in injuries that left him a paraplegic.

Avenatti successfully negotiated a $4 million settlement in late 2014 and convinced the county to expedite payment, according to Johnson. However, after the money was deposited into a client trust account in January 2015, Avenatti allegedly did not tell Johnson but instead claimed the county would only pay in installments.

For four years, Avenatti paid Johnson $1,900 a month, supposedly while a trust was being established that would allow him to receive a much higher monthly payment. All that time, however, Avenatti was bleeding the $4 million account dry, Johnson says. The attorney's plan also cost Johnson more than $500,000 in Social Security benefits during the four years, Johnson says.

The suit asks for $4.5 million in compensatory damages and an additional $5 million in general damages, including emotional distress.

In March, Avenatti was charged in New York federal court with plotting to extort more than $20 million from Nike in exchange for keeping quiet about allegations of misconduct by employees of the sportswear company.

The same month, Los Angeles federal prosecutors charged him with embezzling client funds and bank fraud and subsequently added tax evasion, obstruction and bankruptcy fraud to the list of charges.

In May, New York prosecutors filed another indictment, claiming Avenatti forged a letter from Stormy Daniels supposedly authorizing Avenatti to receive advance fees from Daniels' publisher as part of an $800,000 book deal.

Avenatti was arrested on March 25 and released on a $300,000 personal recognizance bond. He pled not guilty to the California charges in April and pled "100% not guilty" in late May in the two criminal matters in New York federal court, framing his battle against the charges as a David vs. Goliath fight against Trump.

Johnson is represented by Dan Callahan, Edward Susolik and Raphael Cung of Callahan & Blaine.

Counsel information for the defendants was not available Thursday.

The case is Geoffrey E. Johnson v. Michael J. Avenatti, case number 30-2019-01076162, in the Superior Court of California, Orange County.

--Additional reporting by Frank G. Runyeon, Andrew Strickler, Jody Godoy, Lauren Berg and Sam Reisman. Editing by Janice Carter Brown.

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