Avenatti, a lawyer and foe of Donald Trump, was sentenced to prison in a separate extortion case last month.
In lawyer Michael Avenatti’s second court case this year, a California judge declared a mistrial Tuesday, setting the stage for a new trial in October.
The 50-year-old Avenatti, best known for representing porn actress Stormy Daniels in her lawsuit against then-President Trump and for publicly mulling a 2020 presidential bid against Trump, has been charged with stealing millions in settlement money from his clients.
He was sentenced last month to two and a half years in prison in a separate $25m extortion case in New York.
In Avenatti’s California embezzlement trial, US District Judge James V Selna ruled on technical grounds that federal prosecutors failed to turn over relevant financial evidence.
Another hearing in the case was set for September 2, and Selna scheduled a tentative new trial date for October 12.
Federal prosecutors in Southern California have accused Avenatti of cheating five of his clients out of nearly $10m by negotiating and collecting settlements on their behalf and funnelling the payments to accounts he controlled while lying to them about what happened to the money.
“We represented thousands of little guys, the Davids versus the Goliaths,” Avenatti told the jury in an opening statement. “We gave people who had no chance a fighting chance.”
In one instance, prosecutors alleged Avenatti collected $4m from Los Angeles County for a man who suffered injuries in custody and was left paraplegic after a suicide attempt, paying out much smaller amounts that he told the man were advances.
In another case, prosecutors said Avenatti collected a $2.75m settlement for a client and used the bulk of the money to buy a private plane.
Avenatti, who is suspended from practising law in California but was representing himself at trial, had pleaded not guilty to 10 counts of wire fraud in connection with the allegations spanning from 2015 to 2019. He denied embezzling money and said his law firm was entitled to recoup expenses if settlements were reached.
In addition to these counts, Avenatti faces charges of bankruptcy, bank and tax fraud in California. He is expected to be tried on those allegations later this year after the judge split a 36-count indictment into two trials.
The mistrial was first reported by the legal news service Law360.
Avenatti also faces an additional criminal case in New York in which he is charged with cheating Daniels out of hundreds of thousands of dollars. Avenatti represented her in 2018 in lawsuits against Trump and often appeared on cable news programs to disparage the Republican president.