High Profile Lawyer Michael Avenatti Allegedly Funded His Racing Team With Embezzled Money

Image: GB Autosport on Twitter

If you’ve been paying attention to the ridiculous news cycle over the last year or so, you’ll know Michael Avenatti as the lawyer who was representing adult film star Stormy Daniels in a lawsuit against President Donald Trump. Avenatti’s an avid tweeter, and has inserted himself into many news cycle narratives lately, even saying that he was planning to run for president himself in 2020, despite some pretty serious criminal charges as of late.

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What you may not have known was that Avenatti co-owned and raced for GB Autosport, and even raced at Le Mans in 2015. A new grand jury indictment alleges that his motorsport activity was paid for with extremely ill gotten gains.

The indictment includes allegations of several counts of wire fraud, tax fraud, bank fraud, aggravated identity theft, embezzlement of client funds, and more.

Avenatti has been holding a delicate balance of finances for years, apparently. “Money generated from one set of crimes was used to further other crimes,” U.S. Attorney Nick Hanna told the Chicago Tribune. “Typically in the form of payments designed to string along victims so as to prevent Mr. Avenatti’s financial house of cards from collapsing.”

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Avenatti is charged with outright theft of funds from five clients. On at least four separate occasions, Avenatti procured funds on behalf of his clients. These clients had valid and viable claims on funds, which ranged from a $1.9 million contract case to a $8.1 million negotiated sale of stock, according to Deadspin. The party would pay Avenatti’s law firm expecting him to distribute the funds to his client.

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Then Avenatti is alleged to have told his clients that lump sum payments could not be made, continually changed the date for when the payments would be made, lied to clients about whether the firm had been paid, and even lying to the client about them having already received payment.

In the meantime, client money is charged to have been filtering through several Avenatti properties to purchase a private jet and start the GB Autosport team funding. And that’s just the law firm side of things.

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Avenatti also owned Global Baristas US, a holding company that operated the Seattle-based Tully’s Coffee. GB US also began funneling cash payments to GB Autosports bank accounts when the coffee company was under investigation for not paying its taxes. Avenatti allegedly just failed to file taxes, and would move the company’s money from one bank account to another to avoid IRS liens.

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Interestingly, Avenatti’s business partner in the Tully’s Coffee deal was actor—and racer in his own right—Patrick Dempsey. You may recall that Tully’s Coffee “sponsored” Dempsey Racing/GB Autosport “Coffee Rocket” efforts for the 2013 season. Dempsey had a somewhat high-profile split from the team when he sued his partner because of financial inconsistencies. Dempsey alleged that Avenatti hadn’t fully financed the coffee chain as was promised, instead borrowing against Tully’s assets.

GB Autosport continued operating after separating from Dempsey Racing, racing Porsche 911s in IMSA competition, joining the new United Sports Car championship in the GT Daytona class for the 2014 and 2015 seasons. Avenatti himself raced at Daytona and Sebring both years, and joined the JMW Ferrari team at Le Mans in 2015 where he finished 7th in the GTE Am class.

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So clients of the law firm and Global Baristas were left holding the bag while Avenatti lived a lavish lifestyle of private jets, racing Ferraris in France, and fancy wristwatches. For his part, Avenatti maintains he is innocent of all charges, and plans to represent himself in court. If even a fraction of this stuff is true, Avenatti will be judged a pretty scummy dude. Then again, it wouldn’t be the first time illicit funds have been used to fund an IMSA racing team.

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Avenatti was arrested in New York for attempting to blackmail the international shoe company Nike. These new allegations are completely separate from that case, and brought about by a district court in Southern California.

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About the author

Bradley Brownell

Jalopnik contributor with a love for everything sketchy and eclectic.