According to the Associated Press, Avenatti is accused of misusing money that had come from Daniels' book deal. The outlet points out Daniels—born Stephanie Clifford—is not specifically named in the federal court filing, but the details surrounding the case make it clear she is the unidentified client. The indictment also lists a charge of identity theft.
"No monies relating to Ms. Daniels were ever misappropriated or mishandled," Avenatti tweeted Wednesday. "She received millions of dollars worth of legal services and we spent huge sums in expenses. She directly paid only $100.00 for all that she received. I look forward to a jury hearing the evidence."
Federal prosecutors in the Southern District of New York accuse Avenatti of stealing $300,000 from Daniels, and then using that money for personal and business-related expenses. Legal documents state he only paid half of that money back to the victim.
Avenatti represented Daniels in her high-profile legal battle with President Trump and his former attorney Michael Cohen. After publicly detailing her alleged affair with Trump, Daniels filed a lawsuit in an attempt in nullify a nondisclosure agreement she had signed with Cohen in 2016 before Trump took office.
In a November 2018, Daniels accused her attorney of ignoring her information requests related to her legal fund.
"For months I’ve asked Michael Avenatti to give me accounting information about the fund my supporters so generously donated to for my safety and legal defense. He has repeatedly ignored those requests," she said in a statement to the Daily Beast. "Days ago I demanded again, repeatedly, that he tell me how the money was being spent and how much was left. Instead of answering me, without my permission or even my knowledge Michael launched another crowdfunding campaign to raise money on my behalf. I learned about it on Twitter [...] I haven’t decided yet what to do about legal representation moving forward."
Daniels announced she had parted ways with Avenatti back in February, "after discovering that he had dealt with me extremely dishonestly."
Earlier this year, Avenatti was charged with trying to extort more than $20 million from Nike—allegations he has also denied.