Originally Published: 24 JAN 22 05:19 ET

Updated: 24 JAN 22 10:40 ET

By Lauren del Valle and Kara Scannell, CNN

(CNN) -- Opening statements are set to start Monday in Manhattan in a third criminal case against Michael Avenatti, the once high-flying celebrity lawyer who rose to fame by representing adult-film star Stormy Daniels in her bid to terminate a hush-money deal that silenced her allegations of an affair with former President Donald Trump.

The former lawyer, a pugnacious Trump critic who once considered a presidential run of his own, fell from grace after being hit with three federal indictments in a six-week period in 2019.

Prosecutors allege that Avenatti -- who helped negotiate the $800,000 advance for her September 2018 book "Full Disclosure" -- defrauded Daniels by instructing her literary agent to send two of the installments of the advance totaling nearly $300,000 to an account controlled by him, rather than directly to Daniels.

When her agent told Avenatti that she couldn't do so without Daniels' authorization, Avenatti sent the agent a letter with a forgery of Daniels' signature, according to the indictment. Avenatti then allegedly lied to Daniels, telling her the publisher hadn't made the payments, when in reality he used the money to cover payroll costs for his law firm, Eagan Avenatti LLP; a $3,900 lease payment for a Ferrari; and expenses including dry cleaning, airfare, hotels and car services.

In the late months of 2018 and through the beginning of 2019, Daniels repeatedly asked about the missing payments, and Avenatti allegedly continued to lie to her, until Daniels made direct contact with her publisher, and the scheme began to unravel, according to the indictment. She cut off her professional relationship with Avenatti around the time of the indictment.

Avenatti became a cable television fixture during his representation of Daniels, who was a central figure in the hush-money scandal that resulted in Manhattan federal prosecutors charging Michael Cohen -- Trump's former personal attorney -- with campaign finance violations for money he paid to silence women, including Daniels, who claimed affairs with Trump.

Cohen, who pleaded guilty to those and other crimes, was recently released after serving a prison and home-confinement sentence. Trump has denied the alleged affairs.

If convicted, Avenatti faces a maximum sentence of up to 22 years in prison on charges of wire fraud and aggravated identity theft.

When Avenatti was charged in May 2019 he tweeted out a response: "No monies relating to Ms. Daniels were ever misappropriated or mishandled. She received millions of dollars worth of legal services and we spent huge sums in expenses. She directly paid only $100.00 for all that she received. I look forward to a jury hearing the evidence."

Avenatti said again Monday in a statement that he is "completely innocent of these charges. The government is spending millions of dollars to prosecute me for a case that should have never been filed."

Daniels, whose legal name is Stephanie Cliffords, is expected to be a star witness in the prosecution's case and could take the stand in Manhattan federal court as early as Tuesday, prosecutors said during a recent hearing.

Potential jurors were asked during jury selection if Daniels' profession in the pornography industry may make it difficult for them to be fair and impartial. They were also questioned as to their knowledge of the media coverage surrounding Avenatti and his former client.

Judge Jesse Furman ruled over government objections that Avenatti's counsel can cross examine the adult film star about her "beliefs in the paranormal" and past public statements she's made about experiencing visions.

"I think that the jury could conclude that that is probative of her ability to accurately perceive events and to her credibility," Furman said in court.

The defense also subpoenaed Daniels' current attorney to potentially call him as a witness at the trial. They said they might want to question him about a recorded phone call he made to Avenatti about some of the charges in this case. The attorney, Clark Brewster, has moved to toss that subpoena but the judge has yet to rule on that.

Avenatti's defense has indicated in court filings "there is a strong likelihood" that the former celebrity lawyer may take the stand in his own defense.

There were preliminary plea deal discussions but a formal deal never materialized, the parties acknowledged during a recent hearing.

Avenatti is now represented by court-appointed federal defenders have running out of funds to retain counsel after years of litigation, according to court filings.

Prosecutors have indicated they will likely rest the government's case by the end of the week with the entire case expected to wrap in a total of two weeks. Furman said he'd swear in a panel of 12 jurors and six alternates Monday ahead of opening statements.

Years of litigation for alleged scams

In February 2020, Avenatti was convicted in New York of attempting to extort millions of dollars from Nike, by threatening to publicly claim the athletic apparel giant was illicitly paying amateur basketball players. He was sentenced last July to 30 months in prison for which he's expected to report to a federal prison work camp in Oregon.

A former employee of Avenatti who testified against him during the Nike trial is also expected to testify remotely from California during this trial, prosecutors have indicated.

His report date for that sentence has been pushed pending the outstanding litigation.

Avenatti was released from the now-defunct Metropolitan Correctional Center in Manhattan in April 2020 over Covid-19 concerns amid the rise of the pandemic. He has been in home confinement at a friend's apartment in California.

He recently filed a formal claim for $94 million in damages against the Bureau of Prisons for his treatment at MCC, where Avenatti alleges he was treated poorly in dire conditions at the order of then-Attorney General William Barr, according to the complaint.

A federal judge granted a mistrial in another case in California in which Avenatti was accused of embezzling nearly $10 million in settlement funds from at least five clients for personal use. The judge granted the motion for mistrial last August on technical grounds, ruling that prosecutors failed to turn financial evidence over to Avenatti's team. Avenatti appealed the possibility of a retrial and it is unclear if he will be retried in that case.

Avenatti is also facing a second trial in California where he has been charged with tax fraud and bank fraud. He has pleaded not guilty.