Disgraced lawyer Michael Avenatti gets four-year sentence for scamming Stormy Daniels

Disgraced celebrity lawyer Michael Avenatti was on Thursday sentenced to four years behind bars following his conviction for defrauding a former client, adult entertainer Stormy Daniels, during her suits against former US president Donald Trump.

Jurors in February convicted Avenatti, 51, of wire fraud and embezzling up to $300,000 of an $800,000 payout to Daniels for her autobiography, spending some of the money on his company’s payroll and personal expenses.

US District Judge Jesse Furman imposed the sentence in federal court in Manhattan as Avenatti, 51, wearing tan prison garb, blue trainers and a white face mask, looked on.

The California lawyer is already serving a 2.5-year sentence stemming from his 2020 conviction for trying to extort $25 million from sportswear giant Nike. Part of the new sentence will run concurrently, meaning Avenatti faces a combined five years in prison.

"I have destroyed my career, my relationships and my reputation," Avenatti told the judge before sentencing.

Fighting back tears, he admitted he “failed in a cataclysmic way” and will “forever be branded a disgraced lawyer.”

Prosecutors showed that Avenatti spent the stolen money on personal expenses, including payments on his Ferrari, while convincing Daniels in text messages that the publisher was to blame for her missing payments.

Assistant US Attorney Matthew Podolsky called this an “incredible personal betrayal” of Daniels’s trust. The performer was proud of her book deal and needed the cash advances to make payments on her home, the prosecution said.

Daniels, whose real name is Stephanie Gregory Clifford, was the star witness in the trial, testifying that Avenatti stole her money and lied to her about it for months.

Avenatti, representing himself at trial, added to the courtroom drama by grilling Daniels about her belief in the paranormal and her “visions” of ghosts, seeking to discredit her.

Avenatti rose to cable news stardom in 2018 by defending Daniels in her high-profile lawsuits against Mr Trump over claims in her autobiography, Full Disclosure, which was published that autumn.

Daniels is known for receiving $130,000 from Mr Trump’s former lawyer, Michael Cohen, in exchange for staying quiet before the 2016 election about an affair she says she had with Mr Trump, then a celebrity property tycoon.

Mr Trump denies the encounters took place. Shortly after the payment, he won the presidency.

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Disgraced lawyer Michael Avenatti gets four-year sentence for scamming Stormy Daniels

Avenatti became famous for his role in a spat between Donald Trump and the adult film actress

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