Ex-Stormy Daniels attorney Michael Avenatti could see 14-year prison sentence cut in half

Ninth Circuit Court of Appeals judges on Wednesday overturned the 14-year federal prison sentence for suspended attorney Michael Avenatti, who rocketed to fame representing adult-film actress Stormy Daniels in her litigation against former President Donald Trump.

The panel of three judges sent the case back to U.S. District Judge James V. Selna to reconsider his punishment. It is possible it could cut the sentence in half.

In a statement, Avenatti said, “I am thankful that a unanimous three-judge panel of the 9th Circuit threw out my draconian prison sentence today. The sentence was always grossly unjust and violative of my most basic constitutional rights, but the government sought it anyway solely because of who I am. We all deserve due process.”

Avenatti had made an open plea to tax and wire fraud, meaning he had no guarantee what his sentence would be, in June of 2022. Selna’s sentence came down after Avenatti had received five years in prison in New York for an extortion scheme against Nike, and for stealing from Daniels. Selna ordered the punishment to run consecutively.

The appellate judges ruled that Selna erred when he did not account for the value of Avenatti’s legal services to his victims and improperly upped the punishment on the grounds of obstruction of justice based on perjury.

Selna “failed to make explicit findings as to the elements of obstruction of justice based on perjury, so the enhancement must be vacated,” the appellate judges ruled.

The appellate judges also sided with Avenatti on Selna erring in an enhancement of the punishment based on his calculation of the $12.3 million from the losses due to fraud.

“Avenatti contends that (Selna) should have accounted for the value of his legal services and costs, as well as the value of certain payments he made to victims,” the judges ruled. “We agree.”

Selna calculated the loss based on the full settlements Avenatti negotiated for his clients because the attorney “forfeited” his fees because of his “fraudulent conduct,” the judges wrote.

“Selna erred. Forfeiture is a sanction that does not approximate the pecuniary harm caused by an attorney’s misconduct,” the judges wrote. “It has no place in calculating ‘actual loss’ for the purposes of enhancing a criminal defendant’s sentence. Further, Avenatti’s clients were never entitled to receive the full settlement values — they hired Avenatti on a contingency fee basis and agreed, by contract, to pay him a portion of any settlement as his fees and to reimburse him for his costs.”

Selna was directed to assess what fees and expenses Avenatti should receive credit for.

The appellate judges also found Selna abused his discretion in declining to credit Avenatti for payments made to his clients after he misappropriated funds from their settlements. Selna was directed to also determine the value a company he helped a client acquire to be credited to his restitution to that victim.

The appellate judges also agreed with Avenatti in part on whether his punishment should run consecutively to the term imposed in the Nike case.

The appellate judges sided with Selna on his use of discretion in determining that the misconduct in the Nike case was different than what he did in the Southern California case. But the appellate judges did find similarities in the Southern California case and the one involving Daniels.

Federal prosecutors in Santa Ana sought a 17 1/2-year prison sentence for Avenatti, who argued for a six-year sentence to run concurrent with the New York cases.