Michael Avenatti trying to hide assets from creditors: Prosecutors

Michael Avenatti, Stormy Daniels' former lawyer and an outspoken critic of Donald Trump, finds himself embroiled in a new round of legal trouble after being arrested Tuesday night in California.

Already awaiting trial in California and New York, Avenatti was arrested again while leaving a court hearing over revoking his law license. He's due in Manhattan federal court next week over accusations of extorting Nike for millions of dollars.

He's pleaded not guilty in both cases.

A judge ruled on Wednesday Avenatti would remain in custody and be transported by U.S. Marshals to New York for his court hearing next week.

IRS agents took Avenatti into custody for allegedly violating terms of his bail. He's facing a long list of accusations in California, including stealing money from clients and not paying his taxes.

In court documents obtained by ABC News, federal prosecutors allege that while Avenatti, who they said is millions of dollars in debt because of a high-roller lifestyle, was on pretrial release for the California case he was orchestrating complex schemes to hide assets from creditors.

"The fact that defendant continued to engage in criminal conduct after he had been indicted in this case and while on bond demonstrates that defendant remains a substantial economic danger to the community," prosecutors wrote in a request to revoke Avenatti's bail. That request was approved by a judge before his arrest.

Among the money-hiding crimes prosecutors allege, they said that in May 2019 Avenatti arranged for his ex-wife to use funds from a hidden chunk of his money to buy a $50,000 Mercedes Benz in her name that he and his driver used. Prosecutors have argued Avenatti had first completed the paperwork to buy the car but returned with his ex-wife to purchase it in her name.

Prosecutors also said Avenatti's girlfriend took a vacation to an exclusive resort in Tuscany, Italy, as his guest, and that he has citizenship there, which they said raises questions over whether he's hidden assets there.

At the U.S. District court hearing Wednesday in Santa Ana, attorneys for Avenatti, H. Dean Steward and Tom Warren, responded by laying out their case to work out a release based on claims the government unfairly went to pretrial services "multiple times" to get their client's bail revoked.

Steward went over each of the prosecution's allegations, admitting that while Avenatti's actions were efforts to avoid creditors, he still did comply with all pretrial conditions.

"Terms of bail require him to report to pretrial services, not receive approval from them," Steward said in court.

Prosecutors called Steward's claims "laughable," detailing a list of fraudulent behaviors Avenatti allegedly committed while out on bail, adding, "Everything he does is to keep the money in his pocket."

Avenatti skyrocketed to fame alongside former client Stormy Daniels, who filed multiple lawsuits, unsuccessfully, against Trump. The brash and outspoken lawyer quickly became a fixture on cable news shows and received flattering coverage in Vanity Fair and The New York Times Magazine. He was asked about his skincare routine and Tom Ford suits during a photoshoot with Daniels by Annie Leibovitz.

Then last spring, federal prosecutors in New York and California indicted him on charges of extortion, fraud and embezzlement, including allegations Avenatti stole millions of dollars from a paraplegic client.

In May, New York federal prosecutors filed additional charges, this time alleging Avenatti stole $300,000 from Daniels, his most famous client. Avenatti has pleaded not guilty to all charges and has been vocal on social media maintaining his innocence.