Michael Avenatti, the celebrity lawyer, has been charged with defrauding porn star Stormy Daniels, whom he represented in her legal battle with Donald Trump.
Mr Avenatti became a regular on cable news programmes as he championed Ms Daniels' case against the president and at one point even pondered running for the White House himself.
But the 48-year-old was charged on Wednesday with doctoring a document to divert about $300,000 (£236,800) that Ms Daniels was supposed to get from a book deal, to fund personal and business expenses.
Only half of that money was paid back, prosecutors in New York said.
Ms Daniels, real name Stephanie Clifford, is not named in the court filing, but the details of the case, including the date her book was released, make it clear that she is the client involved.
Mr Avenatti has strongly refuted the charges, writing on Twitter that no money relating to the porn star were "ever misappropriated or mishandled" adding "I look forward to a jury hearing the evidence".
Mr Avenatti represented Ms Daniels when she sued to be released from a non-disclosure agreement barring her from discussing an alleged affair with Mr Trump.
The charges follow previous allegations of legal misconduct by Mr Avenatti, who represented Daniels when she sued to be released from a nondisclosure agreement barring her from discussing an alleged affair with Mr Trump.
Mr Avenatti was previously charged in New York with trying to extort up to $25 million (£19.7 million) from Nike by threatening to expose claims that the shoemaker paid off high school basketball players to steer them to Nike-sponsored colleges.
Meanwhile in Los Angeles, he is facing multiple charges alleging that he stole millions of dollars from clients, did not pay taxes, committed bank fraud and lied during bankruptcy proceedings.
Mr Avenatti has denied the allegations against him on both coasts, saying he expects to be exonerated.
Ms Daniels initially hired Mr Avenatti to handle a lawsuit she filed last year in which she sought to invalidate the non-disclosure agreement she had signed with Mr Trump’s then-lawyer Michael Cohen in exchange for $130,000.
The money was supposed to buy her silence about an alleged 2006 affair with the president, who denies that it took place.
In August, Cohen pleaded guilty to violating campaign finance laws in connection with the payment.
Ms Daniels first publicly raised concerns about Mr Avenatti's conduct in November, accusing her lawyer of launching a fundraising effort to raise money for her legal case without telling her.
She also said he had filed a defamation lawsuit against Mr Trump, on her behalf, against her wishes. The lawsuit backfired, with a judge ordering Ms Daniels to pay the president's legal bills.
Mr Avenatti has claimed that under his retention agreement, she had agreed to pay him just $100 for his services, and he was entitled to keep all the money he raised for her legal defense to recoup what he said were substantial costs of her case.
In March, Ms Daniels said she had fired the lawyer a month earlier after "discovering that he had dealt with me extremely dishonestly."