Whiteside's former girlfriend, Alexis Gardner, had hired Avenatti a few weeks earlier to represent her in a $3 million settlement of a potential lawsuit against Whiteside, according to the Washington Post and Los Angeles Times.
Whiteside sent an initial payment of $2.75 million to Avenatti in January 2017 and intended for most of the funds to go to Gardner, but none of the money was passed on to her, according to the report.
Prosecutors say Avennati was entitled to just over $1 million in legal fees, but hid the payment from Gardner. The indictment, obtained by the Washington Post, states that the attorney took $2.5 million to buy a share of a private jet.
Avenatti was indicted April 10 by a grand jury in Santa Ana, Calif. The filing, which described the lawyer's alleged attempts to steal millions of dollars from five clients over several years, identified Whiteside as "Individual 1," and Gardner as "Client 2."
The former couple provided a joint statement Thursday to the Los Angeles Times: "We entered into a mutually agreed upon settlement more than two years ago following the end of our relationship; a settlement that reflected Alexis' investment of time and support over a number of years as Hassan pursued a career in the NBA," the statement said.
"It is unfortunate that something that was meant to be kept private between us is now being publicly reported. We have both moved on amicably and wish nothing but the best for each other."
According to prosecutors, Avenatti originally told Gardner that Whiteside wasn't making payments. Eventually, Avenatti made 11 payments totaling $194,000, between March 2017 and June 2018, to Gardner. After he stopped making the payments, Avenatti "falsely represented" to Gardner last month that Whiteside "was not complying with the settlement agreement," according to prosecutors.
The reason for a $3 million settlement between Whiteside and Gardner remains unknown.
In the 36-count indictment, federal prosecutors in California alleged that Avenatti had a similar scheme with other clients. If convicted on all charges, he would face a maximum of 382 years in prison, according to the Los Angeles Times.