(Adds details from Daniels' testimony)
By Luc Cohen
NEW YORK, Jan 27 (Reuters) - Adult film actress Stormy Daniels told jurors at her former lawyer Michael Avenatti's criminal fraud trial on Thursday that he "stole from me and lied to me."
Testifying as a prosecution witness, Daniels said in Manhattan federal court that she fired Avenatti in early 2019, one year after retaining him to help her escape her non-disclosure agreement with then-U.S. President Donald Trump.
"I hired a new attorney because he stole from me and lied to me," said Daniels, 42, referring to Avenatti. She wore a cardigan sweater over a black dress.
Avenatti, 50, has pleaded not guilty to wire fraud and identity theft.
Prosecutors have said Avenatti forged Daniels' signature to embezzle nearly $300,000 from a book contract that was meant for her, while Avenatti has argued https://www.reuters.com/world/us/michael-avenatti-us-lawyer-who-battled-trump-goes-trial-fraud-case-2022-01-24 that such a dispute over legal fees has no place in court.
Avenatti's work for Daniels, whose real name is Stephanie Clifford, helped propel him to fame in 2018, before a slew of criminal charges the following year ended his law practice.
Daniels' testimony will likely stretch into Friday. Avenatti, a brash lawyer who is representing himself, could then cross-examine her, after representing her in cases she brought against Trump.
Avenatti began representing himself https://www.reuters.com/legal/government/michael-avenatti-asks-represent-himself-stormy-daniels-fraud-case-2022-01-25 in the case on Tuesday, citing a breakdown in his relationship with his public defenders.
Daniels is known for receiving $130,000 of hush money from Trump's former personal lawyer, Michael Cohen, to keep quiet before the 2016 presidential election about a sexual liaison she claimed to have once had with Trump, which Trump denies.
On the witness stand, Daniels told jurors she paid Avenatti a $100 retainer to represent her, with an understanding he would launch a crowdfunding campaign, which ultimately raised $650,000, to cover her legal expenses.
Prosecutors showed jurors the retainer, which said that if Avenatti helped Daniels arrange a book deal or paid media opportunity he would receive "a reasonable percentage to be agreed upon" between them.
Daniels said that after she received a $250,000 advance for the book in April 2018, Avenatti told her by phone that he would not take funds from her book because he would get a "big payday" from winning the lawsuit against Trump.
"He told me not to worry about it that he would never take a penny from me for the book," Daniels testified. She said that in Avenatti's view of her: "I was courageous and I earned it and I deserved it."
Daniels described herself as a writer, director and actress now producing a television show about paranormal activity, titled "Spooky Babes."
Avenatti is expected to use Daniels' interest in ghosts to portray her testimony as unreliable.
'HE LIED TO ME ALMOST EVERY DAY'
Prosecutors displayed dozens of text messages between Avenatti and Daniels after a third advance payment, for $175,000, was due in October 2018.
In response to messages asking why she had not received the money, Avenatti said he would send the publishing company a letter demanding that it pay Daniels.
In February 2019, Daniels emailed the company, court records showed. The company replied to her with records showing it had released the funds to the account Avenatti set up.
"They had sent my payment on time, no question, and he lied to me almost every day for five months," she testified.
Avenatti was hit with dozens of criminal charges in March and April 2019 for allegedly cheating Daniels, defrauding several other clients and trying to extort up to $25 million from Nike Inc, among other charges.
Avenatti is appealing his conviction and 2-1/2-year prison sentence in the Nike case. A trial over the other alleged client frauds, in which Avenatti also represented himself, ended in a mistrial. The remaining charges have yet to be tried.
(Reporting by Luc Cohen in New York; Editing by Will Dunham, Noeleen Walder, Howard Goller and Cynthia Osterman)
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