A federal judge in California on Wednesday revoked the bail of disgraced attorney Michael Avenatti, a day after he was dramatically arrested for allegedly committing a raft of new financial crimes while free and awaiting trial on charges against him in three federal criminal cases.
Avenatti was ordered to be detained in jail without bond pending his upcoming trials after a nearly hourlong hearing in U.S. District Court in Santa Ana, California, before Judge James Selna.
Selna ordered Avenatti to be transported "forthwith," by no later than Friday, to New York, where he had been scheduled to begin trial next Tuesday on charges of trying to extort more than $20 million from athletic apparel giant Nike.
That trial now will be delayed by no longer than a week, the judge in that case, Paul Gardephe, said later Wednesday during a conference call with prosecutors and defense lawyers.
In that call, Avenatti's lawyers complained to the judge that they now lack funds, or access to funds, to pay for an expert witness and expenses related to other witnesses in that case.
Despite that, Gardephe said, "I want the trial to begin at least by Jan. 27."
The judge clearly was irked that federal prosecutors in California had sought Avenatti's arrest on the eve of trial in New York, and suggested there was no good reason for that arrest, noting that the conduct alleged by prosecutors dates back months.
Avenatti is accused in the Nike case of trying to shake down the company by threatening to expose alleged evidence of bribing amateur basketball players and their families unless the company paid up.
The U.S. attorney's office in Los Angeles, in a filing in Santa Ana court unsealed Wednesday, said it wanted Avenatti's bail revoked because there is reason to believe he had violated terms of his release by engaging in "mail fraud," "wire fraud," and "structuring financial transactions to evade [currency] reporting requirements," as well as "money laundering" since he was charged in all three pending federal cases last spring.
Avenatti, an ardent foe of President Donald Trump, engaged in those alleged crimes to hide money from creditors, whom he owes more than $10 million, prosecutors said.
"The fact that [Avenatti] continued to engage in criminal conduct after he had been indicted in this case and while on bond demonstrates that defendant remains a substantial economic danger to the community," the U.S. attorney's office wrote.
Avenatti, 49, was arrested Tuesday evening without warning for the alleged bail violation by IRS criminal investigation agents in Los Angeles in the middle of a state bar court hearing.
State bar officials want his law license involuntarily suspended because of claims he ripped off a client for more than $800,000.
Avenatti is separately charged in another case pending in Manhattan federal court with scamming his former client, porn star Stormy Daniels, out of $300,000 in proceeds from a book deal. A trial in that case is set to begin April 21.
Avenatti has pleaded not guilty in all three federal cases.
He has claimed he is the victim of politically motivated prosecutions as a result of "animus" toward him by Trump.
But Daniels in a tweet Wednesday lashed out at a Twitter user who suggested that Avenatti was "unjustifiably arrested" by Trump's "hired gunman because he helped reveal the @StormyDaniels story."
"Did they make him forge my name, steal my money and lie to me? F--- him!" Daniels tweeted.
Court documents filed by prosecutors in California this week allege that Avenatti last May fraudulently transferred most of a $1 million payment to his law firm to hide that payment from creditors who include a former law partner, a client, his second wife and Washington state tax officials.
Prosecutors also said he has "engaged in a number of other fraudulent transactions" to defraud his creditors "and conceal his assets."
Those transactions included using a portion of the payment to his firm to have his ex-wife buy a $50,000 Mercedes-Benz car in her name that Avenatti and his personal driver "repeatedly used to transport" Avenatti.
Prosecutors in court papers detailed how Avenatti, since his arrest last spring for the federal cases, has repeatedly withdrawn cash and cashed checks in amounts of thousands of dollars, but less than the $10,000 threshold that requires banks to report financial transactions to federal regulators.
In the pending criminal case in California that was the subject of the bail revocation, Avenatti last year was charged in a 36-count indictment accusing him of tax crimes, wire fraud and perjury, with Los Angeles federal prosecutors accusing him of swindling clients out of millions of dollars.
Prosecutors claimed at the time that Avenatti hid and then spent a $4 million legal settlement obtained in January 2015 in favor of a mentally ill paraplegic client, and hid a $2.75 million settlement for another client that Avenatti allegedly used to help pay for his share of the purchase of a private jet valued at up to $5 million.
Avenatti's trial in California is scheduled to begin in May.
Avenatti's bail terms for all his pending cases, which included a $300,000 personal recognizance bond, required him to limit his travel to certain parts of California, New York and Florida unless he received permission from pretrial services officials. He also was prohibited from committing crimes as a condition of his release.
Earlier Wednesday, Manhattan federal court Judge Gardephe denied Avenatti's motion to toss the Nike extortion case, seeming to pave the way for Avenatti's trial beginning next Tuesday, the same day that Trump's impeachment trial is expected to begin the Senate.
But Gardephe said later Wednesday that the plan for the trial has been "thrown into chaos" by Avenatti's arrest in California.
During a telephone conference after Avenatti's bail was revoked, his lawyer, Jose Manuel Quinon, told Gardephe, "We have some very difficult problems."
Quinon said he does not know if Avenatti has enough money to pay for trial expenses, leaving the defense team at a serious disadvantage.
"We may have to have an indigency hearing," Quinon said, referring to proceeding where a judge could decide that Avenatti had no money to pay for his defense, and was entitled to access to a special fund.
"We were dealing with very little resources, and now we have none," Quinon said. "We find out that the rug has been pulled out from under us, because this was totally unexpected."
Prosecutors in the case opposed a long delay for the trial, saying that Avenatti's assets had not been seized as part of his arrest in California.
Gardephe, in his ruling earlier Wednesday rejecting a dismissal motion, noted that Avenatti has moved to throw out all three counts of the indictment on the grounds that "that he was targeted for prosecution in this case for unconstitutionally vindictive and selective reasons."
Gardephe said that prosecutors have "broad discretion" to enforce criminal laws.
The judge also wrote that "although Avenatti has proffered ample evidence of the animosity President Trump feels towards him, Avenatti has not offered any evidence suggesting that that animosity played any role in the U.S. Attorney's decision to prosecute him."
The judge added: "Avenatti is being prosecuted for activities wholly unrelated to the political arena."
Avenatti first gained national notoriety in 2018 for his representation of Daniels.
Trump's then-personal lawyer and fixer Michael Cohen paid Daniels $130,000 in hush money shortly before the 2016 presidential election to keep her quiet about her allegations of a fling with Trump, but details of the payment emerged a year after Trump won the White House.
Avenatti became a leading antagonist of Trump and Cohen, and before his arrest had flirted with a run for the presidency in 2020.
Trump denies having had sex with Daniels, but reimbursed Cohen for the $130,000 that was paid to the adult film actress.
Cohen later pleaded guilty to multiple crimes, including campaign finance violations related to the Daniels payoff and a $150,000 hush money payment by the publisher of The National Enquirer to another purported Trump paramour, Playboy model Karen McDougal. Cohen is serving a three-year federal prison term.
Trump also denies McDougal's claims of an affair with him.
— Additional reporting by CNBC's Yelena Dzhanova.