Thread by @meghanncuniff

I’m here at the federal courthouse in Orange County for the fifth day of testimony in Michael Avenatti’s criminal trial. I’ll be posting updates on this thread, so stay tuned. ⚖️🧵⚖️

First thing’s first: Everyone in the courtroom is wearing a mask today (except Judge Selna, who is sporting a clear plastic face shield). This is per Selna’s order with the Covid-19 Delta variant in mind. Avenatti objected to masked jurors again, but Selna wasn’t having it.

Judge Selna, who also is behind plexiglass, told Avenatti and the other lawyers they're welcome to wear a plastic shield instead of the black mask he has on now. Avenatti opting for mask, it appears. Clerk has face shields she's handing out.

Me? I’ve got this bad boy, fresh out of the package. 😷

The jury is seated and Judge Selna explains the masks: "I’m sure you’re aware, the ground rules have changed. Everyone will be required to wear a mask regardless of their vaccination status." Now Avenatti's ex-paralegal, Judy Regnier, is back on the stand.

Selna’s clerk has quite an intro for him. “All rise and face the flag. In the presence of the flag emblematic of our constitution and remembering the principals for which it stands, this United States District Court is now in session. The Honorable James V. Selna presiding.” 🇺🇸

AUSA Brett Sagel is questioning Regnier (pronounced Ren-yay) about settlement for Avenatti’s client Greg Barela, who was first to publicly accuse Avenatti of theft. She recounted Barala asking for a copy of his settlement agreement but Avenatti not letting her send it to him.

There was another contact Barela had w/ her that she didn’t immediately tell Avenatti of.
“Michael was absolutely livid…that we didn’t notify him immediately that Greg had called. Honestly, there was a lot going on the day before, and it slipped everyone’s mind,” Regnier said.

“Did he say specifically why he was so livid with you?” Sagel asks.
“That he needs to be notified of all client calls. He needed to be notified immediately, and we didn’t do that. And that’s why he was so upset,” Regnier answers.

Before the jury got in, Avenatti switched his mask from a black one to the traditional light blue one. That's probably the most common one in the courtroom right now and the apparent go-to for the DOJ suits.

Sagel asks Regnier if Eagan Avenatti was still in bankruptcy as of time of this Barela contact. She's not sure. Sagel asks what Avenatti told her he needed to do to get firm out of bankruptcy. "He needed to basically reach a settlement with one of the creditors," Regnier says.

"Just one of the creditors?" Sagel asks.
"It may have been two," Regnier answers. Now Sagel asks about another ex-client, YouTube star Michelle Phan (@MichellePhan). This is the fourth client we're hearing Regnier testify about, after Geoff Johnson, Greg Barela and Alexis Gardner

Regnier set up an account for Michelle Phan as a client, and Sagel went through the transfers into it. Three from Phan's Personalized Beauty Discovery Inc., in late 2018 the largest for $27.4 million. 💰

^^^that should be late 2017. Sagel is bringing in email Avenatti wrote Regnier about the transfers. He sent her wire instructions with specific amounts to send out. "Did Mr. Avenatti need to be present to approve your wire transfers?" Sagel asks.
"No he did not," Regnier answers.

Sagel is asking Regnier about a list of wire transfers. Some are to Phan herself, including a $4 million and change one. Two others were for $10 million, to Phan's company Divinium Labs.

Also involved in the Michelle Phan saga with Avenatti is Long Tram. We're hearing about Tram asking Regnier for settlement money, and Regnier saying she doesn't believe she sent it to him,. @kbriquelet did a piece on the Phan/Avenatti connection in 2019: bit.ly/2TDRj4e

Regnier wired $3 million from the Phan account into the Eagan Avenatti account. She then transferred $2.8 million from EA to SulmeyerKupetz, a law firm that worked EA's bankruptcy.

All this testimony about who got how much is a good reminder for me to check up on the Eagan Avenatti bankruptcy case, which was active as ever last I checked.

Avenatti is of course not involved because a receiver now controls firm. But many of his past business associates are having to give back money they got from his firm. (I've tweeted this a few times now, but I did a story in January for @lamag: bit.ly/3bDURu3)

Firm has zero money on hand to pay back any of the creditors and clients like Geoff Johnson. Bankruptcy trustee is trying to recover firm money that Avenatti spent on personal stuff and outside business like his Tully's Coffee venture, to try to pay the loooong list of creditors.

Of course, jurors are't hearing about any of this active bankruptcy litigation. This is just me sharing some outside info. Right now, Sagel is still q'ing Regnier (Avenatti's ex-paralegal) about her work w/ Michelle Phan and Long Tran, and all the wire transfers of Phan's money.

Regnier read an email from Long Tram in which he said he's trying to track a wire transfer and complaints: "There's $8 million of Michelle's money in the ether somewhere, and we have been given the runaround for six weeks."

Sagel has established Regnier never told Tram about a wire, so it had to have been a lie from Avenatti. He asks her if she's the one who gave Tram the runaround for six weeks, and Regnier says no. He asks if Regnier gave Phan the runaround, and she says she never even met her.

"What would defendant need to do if he wanted to send a wire to Michelle Phan?" Sagel asks.
Avenatti objects for speculation, but Selna overrules.
"I just have to initiate it, and he can approve it," Regnier answers.
"Did he do that?" Sagel asks.
"No," Regnier answers.

Regnier recounts Avenatti telling her what to tell Long Tran (not Tram as earlier tweets say). "This was his way of making me be the scapegoat for whatever he was doing," Regnier said.

So there's $8 million Tran is looking for. But Regnier is recounting how Avenatti told her to send only $4 million and change. She sent it in two transfers. Sagel asks why two separate wires? One was $4 million and something, the other was about $100k. Why?

Sagel notes that Regnier once wired $10 million in one transaction with no problem. Why split the $4 million? Regnier says she did it in two transactions because Avenatti told her to. (I'm missing the significance of the two transfers, but it'll come together later.)

Time for the mid-morning break. Judge Selna gives jurors his standard line, "We'll be in recess for 15 minutes. Ladies and gentlemen, please remember the admonition not to discuss" the case with anyone and not to form any opinions.

Regarding all the trial attention on tweets, what you all say on here is really not my business. But keep in mind, Twitter is where people scream "RTs do not equal endorsement" disclaimers, and accounts like Michael Avenatti's Toilet feel the need to specify they are a parody.

So maybe we could just skip the claiming to be a juror in a trial, no matter how jokingly it's said. Remember: Prosecutors are the ones who flagged that original "I'm a juror" reply. I can't keep up with all my replies, so I'll just wish you all the best. Back in about 10 mins.

We're back, and Sagel is going over a May 10, 2018 email Regnier sent Avenatti with a $4 million wire transfer confirmation. Why did she sent it? "He requested it." Sagel asks if each wire transfer she did had its own fed reference number. Yes, they did.

Another email on May 11, 2018, included a more detailed printout of the wire transfer. The point of this questioning appears to be establishing that Regnier did not tell Tran or Michelle Pham the lies they heard about their money.

The significance of there being two transfers, which I said earlier I didn't get, is coming together for me: Avenatti told Pham there were two $4 million transfers, so he needed two tracking numbers to give them. That's why he had Regnier split the $4 million transfer into two.

As Regnier said earlier, the second transfer was only $100k or so, not $4 million. But by having the info on the transaction, Avenatti was able to keep with the lie to Pham that two $4 million transfers were on their way. This is per Sagel's questioning right now.

Regnier recounted angry correspondence from Pham about the money that she sent to Avenatti and he said he'd deal with. Then in December 2018, she was contacted by Newport Beach police. (@NewportBeachPD) "It was about wire transfers with Michelle Pham."

Newport Beach on the case! (c.c.: @RealWillONeill)

Sagel asks Regnier if at this point, she understood Michelle Pham was accusing him of stealing $4 million from her. Sagel asks if Avenatti testified he dnd't steal from Pham, he'd be wrong, and Regnier says yes.

Sagel asks Regnier questions to establish she was not in charges. What ownership interests did she have any of this, and any of Avenatti companies? None. Who had ownership interest in everything? Avenatti. Sagel: What benefit did she receive from those wire transfers? "None."

Sagel asks what benefit she got from Geoff Johnson settlement, f she got any money from Pham, etc. All no, of course. He ends with that. Now Avenatti is heading to the lectern to start his cross examination.

Avenatti says good morning, and if she needs a break, just ask us. Asks her to tell jurors her educational background. She has a paralegal certificate. Is she a CPA? No. Degree in finance or account? (etc etc) No, no. She started at Avenatti's firm when it opened, in 2007.

Avenatti asks her to describe how firm began, but Sagel objects for relevance and Judge Selna sustains. How did they meet? Regnier worked at another firm that worked a case with Avenatti. What was her salary with Avenatti? "It went from like $90,000 annual to $185,000 annually."

She was the highest paid employee at the law firm other than attorneys. From August. 2007 to march 2019. What was the single largest bonus she received? $90,000. "That was early on in the firm, I'm thinking it was around 2013 maybe. I'm not sure." She got other bonuses, too.

"And you understood that your bonuses were contingent on the success of the firm, did you not?” Avenatti asks.
"Yes," Regnier answers.
“Did you ever tell anyone how happy you were to be working at the firm?” Avenatti asks.

“Yes, when we started the firm, it was very enjoyable,” Regnier answers.
Avenatti asks if she ever said she liked working there between 2014 and 2019.
“I very well may have. I really don’t recall.”

“Did you ever express appreciation for how generous I was with you when you were working at the law firm?” Avenatti asks.
“Yes, you were generous with all the employees,” Regnier answers. Avenatti reads from cards she sent him.

One line from a card Regnier sent Avenatti: “This has been an incredible experience. You are a wonderful, caring person, despite what you want the world to think. Looking forward to many years of success.”

Avenatti asks Regnier what happened on March 25, 2019. Her house was raided by the feds. She recalls a knock on the door, armed agents and a helicopter overhead. (She doesn’t mention @GregLeeKTVU, but he was on the scene that day in Yorba Linda, too.)

Regnier says the feds let her lock up her two dogs. Avenatti asks if she was shocked when approximately 11 agents showed up at her home. "Yes, I was."
"How big is your home?" Avenatti asks.
Selna sustains Sagel's objection for relevance.

Avenatti asks if it's true the first thing agents told her was they hadn't decided whether they were going to charge her with a crime. Yes.
"And you took that to mean you should probably talk to them, right?" Avenatti asks.
"I would have talked to them anyway," Regnier answers.

Avenatti asks if she was scared, and Regnier says, "I was scared to death to have 11 people just barge into my home. I was there by myself."
"You were terrified, right? Avenatti asks.
Yes, she was.

Avenatti is reading from the search warrant in which feds wrote that Regnier had key information and knowledge of the crimes outlined in the warrant. Feds had been tracking her phone since March 18, 2019. "I did not know that," Regnier said.

Avenatti asks Regnier if she's asked if she'll be charged. "I am told I am not a target because I didn't benefit from any of the monies." She says she talked to an attorney. Has she asked Sagel if he's going to criminally charge her? "No, I have never asked that of him."

Sagel showed up at Regnier's house with investigators. Regnier again mentions being allowed to put her two dogs away, and Avenatti shows that, like Sagel, he doesn't get the No. 1 rule in journalism: Always get the dog's name. Just a couple nameless dogs, flying by in testimony.

Avenatti brings up lawsuits that name Regnier. "Are they true, what they say about you in those complaints?"
"I did not take any of their money," Regnier answers.
Avenatti asks about the other allegations, and now he's giving Regnier a copy of Greg Barela's complaint.

Avenatti is asking about claims from Barela of Regnier wrongdoing. After a bit of this, Selna tells him to move onto another line of questioning. Avenatti asks about Johnson's allegations against her, but Sagel objects, and Selna says this is irrelevant and a waste of court time.

Avenatti is asking Regnier about how she described the documents found at her home. (Some of them were "correspondence from fans.") She said she wanted the documents moved, burned or trashed. And she said she was willing to hand over the boxes.

Avenatti asks what happened to those boxes. Regnier says the lead federal investigator, Remoun Karlous, who's at the prosecution table, "said he can't advise me what to do with those boxes. They were outside the scope of the warrant."

"Ms. Regnier, you caused the boxes of documents to be destroyed, didn't you?"
No.
"Well, what happened to them?" Avenatti asks.
She says they were shredded when they moved. The shredding company?
"It's a place in Yorba Linda," Regnier says.

Regnier confirms she doesn't know which complimentary comments from clients were in those boxes, and that she doens't know if the clients in this case provide complimentary correspondence that's now missing.

Avenatti asked Regnier about a meeting with @USAO_LosAngeles prosecutors about how she tracked the firm's finances and billing. Now he's asking if it's true Regnier said she'd helped set up Johnson's living situation, but Judge Selna says it's time for lunch. Jury filing out.

Avenatti tells Selna he wants to discuss the issue of him not being allowed to question Regnier further about lawsuits naming her, but Selna is not having it. Tells him to submit it writing but cautions: civil claims don't "shed any light" on whether Avenatti committed crimes.

I’ve explained before the virtues of courthouse’s proximity to good lunch spots, but really, the de facto cafeteria for OC courthouse crowd is Crave, directly across from the courthouse. I’m here now and saw Avenatti’s tech guy, Joe, leaving with an armload of takeout orders.

This is my view at Crave. Pretty sure the two suits walking into the courthouse are the prosecutors, Brett Sagel and Alex Wyman. The foreground of course is #LadiesWhoLunch.

I’m back at the courthouse, and it’s official: Masks are now mandatory in the Central District of California courthouses, regardless of vaccination status. It’s not just Judge Selna’s courtroom anymore.

Attorneys are at their tables (Avenatti is at the lectern), waiting for Selna. Sagel asks Dean Steward if his “client in Michaels” got sentenced yet, referring to the criminal case Selna mentioned yesterday when ordering Avenatti to comply with reciprocal discovery requirements.

Dean says no, he’s kicking it out a bit.
"I’ve been a little tied up," he says.
"With what?" Sagel quips.
For the legal eagles, here's the discovery order from that case that Selna referenced yesterday, on Google Drive: bit.ly/3BLfwXL

Avenatti is continuing his cross examination of his former paralegal, Judy Regnier. He's going over things she told feds, including that he never had her falsify any documents for her. She told them he assisted client Greg Barela "quite often."

Avenatti really hammering this stuff, but Regnier is handling it well. "I don't doubt that I may have said those words. I can tell you I don't recall at this point."

Avenatti asking about Regnier's contacts with prosecutors. Regnier is not remembering exact meeting dates, so Avenatti approaches for each meeting and gives her document to refresh her memory and confirm the exact date. Even though she doens't dispute the meetings.

This is slow, incremental questioning form Avenatti. Recognizing this, AUSA Sagel suggests Avenatti take all the meeting documents to Regnier at once, instead of question by question.

Avenatti asks if Regnier responded to his lawyer, Dean Steward, when Steward asked to meet.
"No. I had counsel, and he was aware of that," Regnier said.
"So you did not respond to Mr. Steward, but you did promptly send the letter to Mr. Sagel, didn't you?"
"Yes, I did."

Avenatti: "Do you dispute that you told the government on that date that I may have used your computer to send this email?"
Regnier begins, "I told the government..."
Avenatti cuts her off: "Do you dispute that, Ms. Regnier?"
"That is not the exact statement I made," Regnier says

A few more minutes spent w/ that line of questioning as Avenatti tried to refresh her memory w/ a document. Now he's moving through the next meetings, including on one July 6. He's naming everyone who was there. Sagel objects, says he can just say government, but Selna overrules.

Avenatti asks her about telling the government because of what she's been through, her memory could be affected. Yes, she said that. Next meeting - July 19. It was a 40-minute meeting. Then a few days later there was a 13-minute phone call.

Avenatti goes over what was discussed in call. They told Regnier he'd been representing himself. "What happened during the other 12 minutes of the call?"
"That was it," Regnier answers. Avenatti tries to hammer this, but Sagel objects as asked and answered and Selna sustains.

Avenatti is doing what he did with other witnesses, really trying to emphasize how many meetings they had with government, to imply their testimony is scripted and at the whim of prosecutors. But he's not really getting into the substance of their testimony.

Now we're into a bit of substance regarding testimony. Avenatti is going over Geoff Johnson's settlement with Regnier. He's asking Regnier if she can say which payments came from money that should have gone to Johnson. No she can't. (But should she be expected to?)

Avenatti asks Regnier if she remembers the exact costs from the Johnson case. Guess what? No, she doesn't. Avenatti asks if she's aware of any evidence that he stole the entire $4 million settlement.
"The entire $4 million? No," Regnier answers.

Avenatti tries to bring up past witness Patrick McNicholas, who worked on the Johnson case and got his costs paid. He asks Regnier if it bothered her that he was charging Johnson for copies and Uber, but Sagel objects for relevance and Judge Selna sustains.

Avenatti asks if Regnier knows of anything that obligated the firm to pay for Johnson's monthly costs and his living arrangement. She says no. Also, regarding the lawsuit from Johnson's care center for unpaid fees, Regnier confirms that the firm paid the settlement amount.

Avenatti asks Regnier where they were in March and April 2017. "I believe we were in LA at the Kimberly Clark trial," Regnier answers.
"Did we get a verdict in that case?"
"Yes"
"We got a verdict in that case for our clients for $450 million, didn't we Ms. Regnier?"
"Yes we did"

Avenatti doesn't mention fact that verdict was reduced to about $25 million by the trial judge, then completely gutted by 9th Circuit Court of Appeals.

https://twitter.com/meghanncuniff/status/1286355884189179906

He also leaves out the fact that that's how I met him - I did a story on the verdict for @ladailyjournal

Avenatti went through a lot of cases and results with Regnier, having her confirm them. He also implies there was a lot gong on she didn’t know about.
"We communicated a lot, but I didn’t tell you everything that I was working on at all times, did I?" Avenatti asks.
"No."

The 15-minute afternoon break breaks a line of questioning from Avenatti about checks Regnier signed. I feel like the questions are bouncing around a lot to different topics.

We're back, and Avenatti is continuing his cross of his former paralegal, Judy Regnier. Notable: Regnier is wearing a clear plastic face shield, not a mask. That's standard for witnesses, who also are behind plexiglass.

Avenatti asks Regnier about him asking for Geoff Johnson's contact information right after he was questioned about Johnson's missing settlement in the March 2019 judgment debtor exam. "You don't have any idea why I asked for his contact information, do you?"
"No I don't."

Avenatti asks Regnier about Alexis Gardner and his work making sure she had a place to sleep. He asks about a mediation Avenatti set up with retired judge Louis Meisinger of @SigResolution. Sounds like Meisinger was a bit of a go-to mediator for Avenatti. signatureresolution.com/neutrals/hon-l…

Avenatti brought up another case Meisinger mediated for him, a lawsuit over broken vaults at a cemetery. Story on that case here latimes.com/local/lanow/la… but be sure to read @finneganLAT from 2018 on what else happened with that case: latimes.com/politics/la-na…

As @finneganLAT explained in this article, the cemetery case is part of why Avenatti owes his ex-law partner, Jason Frank, so much money. (Frank's current law partner Andrew Stolper is the one who questioned Avenatti in the judgment debtor exams.) latimes.com/politics/la-na…

Of course, Avenatti didn’t tell jury about any of that (why would he?). Now he’s asking Regnier about the jet prosecutors say he bought with Alexis Gardner’s settlement money. He's trying to establish jet was worth more, part of a broader attempt to show he had money coming in.

Avenatti brings up email in which he told Regnier "ignore this" re: client complaint.
"Do you have any idea if it was part of some grand nefarious plot" to steal from a client?
Selna overrules Sagel objection (argumentative)
"I don't have any idea why you said 'ignore this', no."

Avenatti asks if Regnier knows what the the QuickBook account for Greg Barela retired federal magistrate Avenatti asks her about a mediation in Colorado for Barela involving a retired federal magistrate.
"Do you recall that it took place around Hanukkah or Christmas?"
Yes.

"And it was not an easy settlement?" Avenatti said. Regnier agrees, and agrees Barela was at firm regularly, basically operating a startup business out of a conference room.
“Did he ever approach you and say where the hell is my settlement?"
"I don't recall him doing so, no."

Avenatti is questioning Regnier about her knowledge of Florida attorney Ed Ricci, and which cases he helped with. (From yesterday:

https://twitter.com/meghanncuniff/status/1420153323533963264

)

"Mr. Ricci was quite a bit older than me?" Avenatti asks.
"Yes," Regnier answers.
"When you observed our interactions, did you come to the conclusion that Mr. Ricci was kind of like a mentor to me?"
Selna sustains Sagel's relevance objection.

Avenatti moves onto his Tully's Coffee venture aka Global Baristas. He says he bought it out of bankruptcy and saved 500 jobs in the Seattle. (He doesn't mention that it fell back into bankruptcy - involuntary! - under his ownership.)

Avenatti went after Regnier over a $3,800 expense payment. Said something like, despite Regnier's 18 meetings w/ USA and her 6 1/2 hours direct exam, she still thinks she was rightfully owed that. Regnier calmly answers yes, she was entitled to be reimbursed for her expenses.

Coblentz Patch Duffy & Bass LLP in San Francisco (@CoblentzLaw) just got mentioned. (@Orrick was mentioned earlier in the day.) Avenatti asks if Regnier knows he has a 24-year relationship with Coblentz. Is she aware of anything that indicates they stopped representing him? No.

Avenatti asks Regnier, did you "ever come to learn that Coblentz refused to work with me because they were upset about the payment scheduled related to their fees?"
No, she wasn't aware.

This line of questioning seems to be part of Avenatti's efforts to show he had a big cash flow coming in and different money demands that warranted payments Regnier might not understand.

Avenatti asks if Regnier knew Greg Barela had a fresh felony conviction involving dishonesty. Selna sustains objection, says this can come eventually but not through Regnier. (It's foundational. Regnier can't speak authoritatively to what exactly Barela's conviction was for etc.)

Avenatti asks Regnier if when he told her to bring in Barela's settlement document, if he told her they were trying to dupe him.

Avenatti imitated the voice such a thing would be said in. "Remember, we're trying to screw Greg Barela of his settlement funds, we don't want to show him the real document?"
No, Regnier just gave him the document.

Avenatti suggests we all cut out of here five minutes early, and Judge Selna is down. He says that's fine, we're stopping now. 🥳 Tells jurors we have to stop at 3:50 p.m. tomorrow, so lunch will only be an hour.

Avenatti doesn't have anything for Selna, but Sagel does. Sagel says Avenatti kept asking Regnier about meetings she had with prosecutors about the Nike extortion case, which opens the door for Sagel on re-direct.

This was litigated pre-trial, and Sagel tells Selna that Avenatti has "clearly opened the door" for prosecutors to elicit testimony from Regnier that the meetings involved other federal prosecutors pursuing other cases "in which defendant defrauded other clients of his."

Avenatti tells Selna he didn't ask about any meeting in which the California prosecutors weren't present and only Southern District of New York prosecutors were. Sagel says three of the "18" meetings Avenatti referenced were witness prep sessions.

Selna asks if California prosecutors were there. Yes. Still, "I think the government is entitled to present the full context," Selna said. "I think it opens the door to establish what the purpose of the meeting was." This is really not good for Avenatti.

Prosecutors won't be naming the Nike extortion case specifically, but they will be able to reference "another criminal matter," Selna says. Will be very interesting to see how Sagel brings this up in his re-direct of Regnier tomorrow. Avenatti says he has 2-3 more hours of cross.

"I think you're entitled to ask the question, were other matters discussed." That sounds like the language Selna is going with now. "Other matters." But we'll see what exactly happens tomorrow.

And that's it for the day. Look for in-depth coverage at @lawdotcom this week, and check back tomorrow about 8:30 for another thread. Thanks for following along.

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