The Latest Private Info Dump From Stormy Daniels’ Lawyer Tests The Ethics Rules

The Latest Private Info Dump From Stormy Daniels’ Lawyer Tests The Ethics Rules

The unsourced document details various ‘suspicious financial transactions’ allegedly made to Trump lawyer Michael Cohen through a limited liability company.
Caroline Court
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I could not believe it when someone texted me a link to an “Executive Summary” posted on Dropbox by Stormy Daniels’ lawyer, Michael Avenatti. He apparently shared it via Twitter (you’ll recall he blocked this lawyer weeks ago). I started to shake my head in disbelief as soon as I opened the document, because the header on every page has his firm’s name and “PROJECT SUNLIGHT.” Come on.

The document details various “suspicious financial transactions” (his language) allegedly made to Cohen through a limited liability company. No source documents are attached, and Avenatti does not disclose where or how he got his information. (More on that later.)

There Is More than One Michael Cohen, Buddy

True to form, Avenatti makes various tantalizing assumptions throughout the report. First, he says that “approximately $500,000 in payments [were] received from Mr. Viktor Vekselberg, a Russian Oligarch.” Avenatti says the money was routed through a company named Columbus Nova LLC.

Through its attorney, Columbus Nova immediately issued a statement denying these allegations: “Reports today that Viktor Vekselberg used Columbus Nova as a conduit for payments to Michael Cohen are false. The claim that Viktor Vekselberg was involved or provided any funding for Columbus Nova’s engagement of Michael Cohen is patently untrue.”

Another Avenatti claim related to monies received by Cohen from Novartis, the pharmaceutical company. Avenatti reported that “[f]ollowing these payments, reports surfaced that Mr. Trump took a dinner meeting with the incoming CEO of Novartis before Mr. Trump’s speech at the World Economic Forum in Davos, Switzerland in late January 2018.” Of course, the implication being Cohen was paid to, among other things, facilitate this meeting.

Novartis issued a statement confirming payments to Cohen (indeed, for a greater amount than Avenatti reported), but denied that its retention of Cohen was in any way related to the dinner its CEO had with Trump and 15 others at the World Economic Forum. The statements also read: “Suggestions to the contrary clearly misrepresent the facts and can only be intended to further personal or political agendas.”

Finally, and perhaps my favorite debunking of this silly report, is an alleged $4,250 payment to Cohen by a Malaysian firm, Actuarial Partner. Scott Stedman, an investigative journalist, tweeted that Avenatti has mistaken identities. Stedman said he received an email from the actual Michael Cohen who received this payment. The same apparently is true for a $980 payment to a Michael Cohen from a Kenyan bank cited in Avenatti’s report. As Avenatti likes to say, you just can’t make this stuff up! It’s not like Michael Cohen is a common name or anything.

If It’s Real, This Disclosure Is of Protected Information

While reading the “Executive Summary” I couldn’t understand how Avenatti got this banking information. Was it through a subpoena to the bank in connection with his litigation with Cohen? Even if he got bank records with a subpoena, one would think that such private records can’t be shared publicly, because they would be subject to a protective order. Many people surmised the information was obtained from SARS (suspicious activity reports) filed by the banks. SARS are highly confidential, and it’s a violation of federal law to disclose such information.

It was reported today by The Washington Post that the U.S. Treasury inspector has launched an investigation as to whether suspicious activity reports of Cohen’s banking transactions were “improperly disseminated.” While it may not be a crime to receive such information, shouldn’t lawyers hold themselves to a higher standard and not further disseminate what they know is illegally disclosed information?

I am a staunch advocate for my clients, but I am pretty sure I would not cross this line. My moral compass probably wouldn’t permit it. I also can’t think of a single attorney who would use illegally disclosed information in the manner in which Avenatti seems to be. I guess I am lucky to be surrounded by some of the best lawyers, who act professionally and wouldn’t pull such punches.

Avenatti recently said the source of the information in his executive summary is “nobody’s business.” Sorry, I don’t think that’s going to fly with the Treasury Department, Michael.

These Disclosures Likely Break Ethical Rules

As I read more and more about Avenatti and his theatrics, I harken back the Rules of Professional Conduct. Every state has its own set of rules that govern the conduct of lawyers and dispense discipline as appropriate. It’s not far-fetched to believe that Avenatti may have violated the state of California’s Rules of Professional Conduct.

Rule 5-120 covers “Trial Publicity.” In layman’s terms, a lawyer can make general statements about a case, but cannot make statements outside of court that may be detrimental or cause harm to a pending litigation. (For the lawyers reading this, the language is “substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.”)

I have a hard time believing that Avenatti’s three-ring circus and personal and professional attacks on Cohen do not violate this rule. Notably, one of the considerations is whether the statements made outside of court include information the attorney knows is false or deceptive. California’s Business and Professions Code also provides that it is a lawyer’s duty to maintain the respect due to the courts of justice and to advance no fact prejudicial to the honor or reputation of a party or witness, unless required by the justice of the cause with which he or she is charged.

As I wrote last week, Avenatti made outrageous false claims about Cohen’s phones being tapped by the federal government. Now, he’s issued this executive summary, which has already been contradicted and criticized by entities named in his summary. Is Avenatti walking a tightrope, and will his big mouth be his downfall? It remains to be seen, but silly, unprofessional, and possibly unethical behavior has a way of catching up with someone.

@beyondreasdoubt is a criminal defense attorney in New York City. You can find her musings on Twitter.

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