Heat on Stormy Daniels' lawyer over past business dealings, bank record disclosure

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Avenatti accused of sharing info about wrong Michael Cohens

Michael Cohen's legal team says dossier released by Stormy Daniels' lawyer includes information about other people named Michael Cohen; reaction on 'The Ingraham Angle.'

The Stormy Daniels lawyer who tweeted bombshell allegations this week against Trump attorney Michael Cohen is now facing questions about his own business dealings — as well as how he obtained Cohen's bank records.

Since Michael Avenatti cited financial records to accuse Cohen of receiving $500,000 from a Russian oligarch-tied company — and other media outlets detailed that and other transactions — a frenzy has erupted over Cohen’s dealings at the dawn of the Trump administration. The records suggest Cohen's firm was paid huge sums for insight into the Trump administration.

AT&T and pharmaceutical giant Novartis, both of which paid Cohen's firm, also said this week they had been questioned by Special Counsel Robert Mueller’s team about their relationship with him. The lawyer is under investigation, in part over a $130,000 payment to Daniels in exchange for her silence about an alleged sexual encounter with President Trump a decade ago.

But Avenatti has also faced scrutiny over his business dealings.

Recently, a complaint was filed against him to the California State Bar Association regarding his role in purchasing Tully's Coffee several years ago through an entity called Global Baristas.

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The complaint, first obtained and reported by The Seattle Times, was filed by attorney David Nold of Bellevue, Wash. The complaint says 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 complaint from Nold, as posted by The Seattle Times, called into question Avenatti's “fitness to practice law.”

Since the coffee chain purchase, Tully's has shuttered its stores (though the closures were described as temporary) as Global Baristas has dealt with numerous lawsuits.

The paper trail for that deal is maddeningly complex.

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].”

But Avenatti reportedly says he thinks Global Baristas has paid the outstanding taxes. Further, Avenatti claimed to Fox News 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 Thursday. “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.”

Stormy Daniels' attorney Michael Avenatti disputed the latest complaint filed by Seattle-based lawyer David Nold. (AP)

However, a 2017 court document posted by The Seattle Times shows Avenatti acknowledging he was the "principal" of Global Baristas US LLC.

Avenatti, though, strongly disputed the complaint itself in an email to Fox News, calling it “complete and utter nonsense” filed by an “unethical lawyer who was recently held in contempt of court."

Nold told Fox News in an email that this is "just Avenatti being Avenatti."

"The court ruled that I should not have given the full Avenatti deposition transcript to the news media," Nold said. "The court found nothing wrong with sending the bar complaint."

Fox News attempted to resolve their dueling claims by contacting the State Bar -- but a spokesman said they could not comment on "confidential" filings.

Meanwhile, another lawsuit was filed back in 2013 against Avenatti by his famous business partner, Patrick Dempsey of “Grey’s Anatomy” Dr. McDreamy fame. Dempsey's complaint against Avenatti, which was settled quickly, alleged Avenatti had not fully financed the coffee chain as agreed.

Avenatti no longer has any interest in either Global Baristas entity.

The attorney was surely the lesser known partner in that Tully's deal.

But since then, he's rocketed to national fame with his representation of adult film star Daniels -- and is still causing controversy.

While Cohen faces scrutiny from federal investigators and the media over his financial transactions, the disclosure of the Cohen bank records has drawn the feds' attention. The Treasury Department’s Office of the Inspector General said Wednesday that it was "inquiring" into claims that the information was "improperly disseminated."

Former Trump Organization attorney Michael Cohen is facing scrutiny from federal investigators over his financial transactions. (Reuters)

Inspector general counsel Rich Delmar said the agency’s investigation stemmed from its authority as the federal agency that analyzes banking records for potential illegal activity. Under the Bank Secrecy Act, financial institutions must monitor their customers’ activities and report suspicious transactions to the government. But that information is supposed to remain confidential.

An OIG official said the inquiry was “predicated” on a New York Times story, which cited transactions first publicized by Avenatti and confirmed some of the information.

In their own court filing, Cohen’s attorneys Stephen Ryan and Todd Harrison accused Avenatti of making false accusations, and publishing “numerous incorrect statements to the public in an apparent attempt to prejudice and discredit Mr. Cohen.”

In a letter to federal Judge Kimba Wood, who is overseeing the Cohen case, Ryan and Harrison wrote that some of the information Avenatti published did appear to come from Cohen’s actual bank records and claimed that their client “has no reason to believe that Mr. Avenatti is in lawful possession of these records.”

“[Avenatti] should be required to explain to this Court how he came to possess and release this information,” they wrote.

Cohen's attorneys also claimed that Avenetti had incorrectly linked at least five wire transfers to their client. In two cases, they said the money was received by different Michael Cohens -- one residing in Canada and another in Israel.

When asked to respond to Cohen’s attorneys, Avenatti told Fox News that their filing was “comical and baseless.”

MICHAEL COHEN TEAM SAYS SOME OF AVENATTI'S CLAIMS ARE ABOUT OTHER MICHAEL COHENS

“We have done nothing wrong and the best thing they can point to is claiming that a mere $25,000 worth of transactions out of $3 million that we detailed is inaccurate? What a joke,” Avenatti told Fox News on Thursday.

Cohen is under criminal investigation as part of a grand jury probe of his personal business dealings. The investigation is being led by the U.S. Attorney’s Office in the Southern District of New York.

Adult film star Stormy Daniels, left, was paid $130,000 by Michael Cohen in exchange for her silence about an alleged sexual encounter with President Trump in 2006 in the days leading up to the 2016 presidential election. (Reuters)

Even before his Daniels representation, Avenatti was known as a hard-charging and effective attorney who employs "unconventional" tactics in his legal battles. In Avenatti’s early days, he worked at The Research Group, a political opposition research and media firm run by Democratic political operative Rahm Emanuel.

The latest politico raising questions about Avenatti is Mark Penn—a former top pollster for Bill and Hillary Clinton—who said Avenatti should say where he got the banking details and who's funding him.

“He wants to make the discussion all about where Michael Cohen, President Trump's personal attorney, got his money but, to have clean hands, Avenatti needs to come forward with exactly who is financing his operation, who his sources were for detailed banking information, and whether he really is an attorney solely representing Stormy Daniels or just using her as cover to wage a political operation,” Penn wrote in an op-ed for The Hill, further questioning “where and how” Avenatti got Cohen’s “detailed financial information—because he didn’t find it on Google.”

"He can’t be both an attorney and then participate as an officer of the court in trafficking illegally obtained information," he wrote.

Avenatti slammed Penn in response, calling his column "ridiculous" and saying there was "nothing wrong" in the release of Cohen's financial information. Further, he posted a statement saying the case is funded by Stephanie Clifford (a.k.a. Stormy Daniels) and crowdfunded donations collected online. "[N]o political party or PAC is funding this effort. No left wing conspiracy group is behind this. And no big fat cat political donors are leading the charge. Get over it," he said.

On Tuesday, when initially asked how he obtained the documents he published, Avenatti told Fox News: “That’s my work product and will not be disclosed.”

He then asked: “Why is Michael Cohen refusing to provide the bank statements to the public if what we have asserted ... is not true?”

Fox News' Samuel Chamberlain and Kristin Brown and The Associated Press contributed to this report.