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The State Bar of California has closed its investigation into Michael Avenatti and allegations of professional misconduct leveled against him earlier this year, stating it does not have clear evidence of violations of the state’s ethics rules.
The complaint, which was filed in late March by attorney David Nold of Bellevue, Wash., was related to Avenatti’s role in purchasing Tully’s Coffee several years ago through an entity called Global Baristas. The complaint said Avenatti and Global Baristas faced a lien for unpaid federal taxes worth roughly $5 million, claiming taxes were withheld from workers’ paychecks but not paid to the government.
“The State Bar has completed the investigation of the allegations of professional misconduct reported by David Nold. We have determined that this matter does not warrant further action,” Joe Nunley, an investigator with the California State Bar, wrote in a letter to Avenatti’s attorneys. “Therefore, the matter is closed.”
Avenatti posted the letter on Twitter Tuesday night, blasting the complaint as “baseless.”
“I said at the time that the accusations were politically motivated and baseless,” Avenatti tweeted. “And I was right. I was just cleared. #Basta.”
According to the state bar’s website, an investigation is launched based on a complaint only if the state bar attorney “sees evidence of a serious violation.”
“The State Bar’s investigation and complaint process is confidential, so we are not able to confirm or deny whether there is or was an investigation into any particular attorney,” a spokesman for the State Bar wrote in an email to Fox News Wednesday. “If the State Bar files a notice of discipline charges against an attorney, information about the case is available and posted on the attorney’s online State Bar profile.”
In a statement to Fox News on Wednesday, Nold said the State Bar “invited a written response within 90 days to supplement the record and assist it in further investigation.”
“Contrary to the malicious and personal attacks leveled against me for filing the Grievance, my motivation has always been solely to bring justice to the government and citizens of Washington State that were victimized by the undisputed and colossal failure of Global Baristas US, LLC,” Nold said in a statement to Fox News. “Mr. Avenatti has himself claimed that he profited from the sale of the company to the tune of millions of dollars. In turn, there remain unanswered questions regarding what happened to the millions of dollars generated by the company that never reached employees, landlords, or various levels of government.”
Nold added: “Public records still list Mr. Avenatti as controlling the company, and nobody has risen up to claim ownership or responsibility as his successor.”
Nold said Avenatti “refuses to answer that question” and has “gone to great lengths to prevent the public from learning anything about its current ownership structure.”
“A license to practice law is a sacred privilege, and one that I still believe imposes duties of morality inconsistent with what has transpired in connection with Global,” Nold told Fox News.
Nold also told Fox News that “several other creditors represented by other attorneys commenced an involuntary bankruptcy against Global.”
“The bankruptcy will shed light on many of these issues because no longer will those who were running the company be able to hide their identity or conduct,” Nold said.
Since the coffee chain purchase, Tully’s has shuttered its stores (though closures were described as temporary) as Global Baristas has dealt with numerous lawsuits, first reported by The Seattle Times.
The paper trail for that deal is complex.
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Earlier this year, Fox News obtained a copy of the notice of federal tax lien in question, sent to “Global Baristas US LLC” and “Michael J. Avenatti MBR [member].”
Avenatti reportedly said he thinks Global Baristas has paid outstanding taxes. Further, Avenatti claimed to Fox News in May that he wasn’t a “member” of Global Baristas US LLC—but rather the entity that owned it, Global Baristas LLC.
“The federal tax lien is related to an entity that was owned by another company that I used to have an interest in,” Avenatti told Fox News in May. “At no point in time was I ever responsible for any taxes for Global Baristas US LLC, nor was I ever a member of that entity, nor did I own any direct interest in that entity.”
However, a 2017 court document posted by The Seattle Times earlier this year shows Avenatti acknowledging he was the “principal” of Global Baristas US LLC.
Avenatti, though, strongly disputed the complaint itself in May in an email to Fox News, calling it “complete and utter nonsense.”
Meanwhile, another lawsuit was filed back in 2013 against Avenatti by his famous business partner, Patrick Dempsey of “Grey’s Anatomy” fame. Dempsey’s complaint against Avenatti, which was settled quickly, alleged that Avenatti had not fully financed the Tully’s Coffee chain as agreed.
Avenatti no longer has any interest in either Global Baristas entity. The attorney was surely the lesser known partner in the Tully’s deal.
Avenatti has made national headlines in recent months in his representation of porn star Stormy Daniels, who allegedly was paid $130,000 in the weeks prior to the 2016 presidential election in exchange for her silence about an alleged sexual encounter with President Trump.
Most recently, Avenatti represented Julie Swetnick, one of the women who accused Supreme Court Justice Brett Kavanaugh of sexual misconduct during his confirmation process. Since, Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, referred Avenatti and his client for criminal investigation regarding a potential “conspiracy” to provide false statements to Congress and obstruct its investigation.
Avenatti has said he is exploring a 2020 presidential run to take on Trump.
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