Page 13 - Time Magazine-November 05, 2018

Nation

identity,” Avenatti says. At 83, his father
still works full time.
Like Trump, Avenatti was a transfer
student who graduated from the Univer-
sityofPennsylvania.Hespenttimeduring
college working as a dirt-digging opera-
tive, flying around the country research-
ing candidates for the consulting firm run
by Rahm Emanuel, the bare-knuckled for-
mer White House chief of staff. Avenatti
says he worked on more than 150 cam-
paigns, both Democratic and Republican,
includingtheunsuccessfulefforttodefeat
then Republican Senator Arlen Specter in
1992 in part by dredging up details of un-
savory clients Specter had represented as
a criminal-defense lawyer.
Avenatti applied to law school at
George Washington University in D.C.
but was waitlisted and entered the night- ^
school program in 1996 instead. His first- Avenatti first vaulted to fame for his work on behalf of Daniels
year torts professor, the legal scholar Jona-
than Turley, saw a rare gift in him. “We can July2011 one partner, John O’Malley, sued documents. Eagan Avenatti still owes
teach many things in law school,” Turley Avenatti and another partner, Michael Frank $10million, according to Frank’s at-
says. “What we cannot teach is instinct.” Eagan, claiming the two had failed to pay torney, Eric George. Avenatti claims Frank
After graduating, Avenatti moved to him his portion of partnership fees after was a disgruntled former employee who
the West Coast. In 2007 he co-founded forcing him out of the firm. Avenatti and had conspired to steal the firm’s clients.
what’s known as a “plaintiff contingency Eagan countered that O’Malley had mis- Filings in a related bankruptcy case
firm,” taking lawsuits on spec and getting managed and lied to clients. O’Malley got show that Avenatti’s firm had tax troubles.
paid only if the litigation succeeded—a $2.7 million in a settlement, according to Court documents dated January 2018 re-
risky proposition for complicated cases the Los Angeles Times. Neither O’Malley veal that Avenatti had paid $1.5 million of
that can take years to settle. But the firm nor Eagan responded to requests for com- an outstanding $2.4 million tax liability
notched big wins: a $39 million settle- ment. Avenatti declined to comment on but that the firm still owed the IRS ap-
ment on behalf of two executives who’d the settlement details. proximately $880,000. Federal attorneys
sued their former employer; an $80.5mil- Five years later, Jason Frank, a former claimed in May that Avenatti had missed
lion class-action settlement on behalf of nonequity partner at Avenatti’s firm, sued the first installment of that payment.
Jews whose remains had been dumped in for nearly $15 million in back pay, accord- Avenatti says his firm has “fully satisfied”
a mass grave by the L.A. cemetery where ing to court documents obtained by TIME. all of its tax liabilities. The U.S. attorney’s
they were buried. Over the course of his Frank also claimed that Avenatti, as man- office in L.A. declined to comment.
career, Avenatti says, he’s reaped over aging partner, had failed to provide him It wasn’t just fellow lawyers with whom
$1 billion in verdicts and settlements. with copies of the firm’s tax returns and Avenatti had troubles. In 2013 Avenatti
The $1 billion figure, however, is that it misstated its profits. In February teamed up with the actor Patrick Dempsey
heavily padded by settlements that were 2017, a month before the arbitration trial to buy the Seattle-based coffee chain
substantially reduced on appeal. In 2009 was to start, a judicial panel found that Tully’s. But just two months after they
Avenatti won a nearly $40 million ver- the firm had maliciously and fraudulently finalized the deal, Dempsey sued to get
dict in a fraud case against the account- concealed its revenue numbers. out of the partnership, claiming in court
ing firm KPMG; three years later the In December 2017, Avenatti’s firm that Avenatti had borrowed $2 million
New Jersey supreme court threw out the reached a $10 million settlement with to help buy the company without telling
verdict. In 2016 Avenatti was featured Frank, who agreed to receive less than him. Avenatti had purchased the Tully’s
in a 60 Minutes investigation of defec- half that if the first two installments were chain through a company he established
tive Kimberly-Clark surgical gowns, made on time. They weren’t. On Oct. 22 in December 2012 called Global Baristas.
which he alleged were endangering the a California judge ordered Avenatti, who In 2017 the IRS claimed Global Baristas
medical workers who wore them. But had personally guaranteed the first two owed $5 million in federal taxes. In March
the $450 million in punitive damages he payments, to pay Frank $4.85 million. 2018 Tully’s closed all its stores.
won in the case was later reduced to just The same day, his firm was evicted from One attorney who previously sued Tul- DREW ANGERER— GET T Y IMAGES
over $20 million. its office in a Newport Beach building ly’s in a real estate dispute, David Nold,
Avenatti has been plagued by disputes for allegedly failing to pay rent for the filed a complaint with the California state
with current and former partners. In past four months, according to court bar in March 2018 alleging that Avenatti
84 Time November 5, 2018