Michael Avenatti, the high-profile California attorney who represented porn star Stormy Daniels, has been accused of attempting to extort more than $ 20 million from sports company Nike.
Avenatti, a prominent critic of Donald Trump, has threatened to release malicious information about Nike unless it repays him, according to a criminal complaint filed by federal authorities in New York.
He was also charged with bank fraud and reclamation in a separate case in Los Angeles, where prosecutors claimed he had stolen money from a client.
Avenatti, who teased the idea of a presidential offer, rose to national fame as an attorney for Daniels, the porn star who was paid to keep quiet about an alleged sexual encounter with Donald Trump. They separated this month.
He used his prominence to attempt to extort millions from Nike, prosecutors said. He threatened to publicize misconduct allegations against Nike unless the company paid a client representing $ 1.5 million and paid Avenatti and another attorney up to $ 25 million to conduct an internal investigation, the criminal complaint says.
“A suit and tie doesn’t mask the fact that it was, after all, an old-fashioned shakedown,” said Geoffrey Berman, the US attorney for New York’s Southern District.
Avenatti was arrested in New York on Monday morning and subsequently appeared in court. He did not file a statement and was released on $ 300,000 bail.
“I am very confident that when all the evidence is laid bare in relation to these cases, when all is known, when due process has occurred, I will be completely exonerated and justice will be done,” Avenatti said on Monday evening.
Berman said Avenatti, 48, acted as a lawyer bringing a case on behalf of a client simply to “provide cover for [his] extortion requests for a huge payday for himself, “adding,” When lawyers use their legal licenses as weapons as a pretext to extort payments for themselves, they no longer act as lawyers. They act like criminals. “
Avenatti represented the coach of an amateur men’s basketball team that Nike had sponsored but had recently severed ties with, court documents say.
He met with Nike attorneys last week and said his client had information that Nike employees made improper payments to top high school basketball prospects, similar to the allegations against Adidas employees that led to federal convictions.
Avenatti said he will hold a press conference to publicize the allegations – scheduled to coincide with the NCAA basketball tournament and Nike’s quarterly earnings calls – unless his demands are met, prosecutors said.
Just before the allegations against him were revealed on Monday, Avenatti tweeted announcing a press conference on Nike’s allegations.
“Tmrw at 11:00 ET, we will hold a press conference to reveal a major high school / college basketball scandal perpetrated by @Nike which we found out, “he wrote.” This criminal conduct reaches Nike’s highest levels and involves some of the biggest names in college basketball. “
However, Nike had reported Avenatti to federal authorities, who had begun recording the company’s meetings with him, court documents say.
Avenatti asked the company to pay the amateur coach $ 1.5 million and hire him and another attorney – identified by the Wall Street Journal as Mark Geragos – to conduct an internal investigation into the allegations, costing between $ 15 and $ 25 million, the complaint says. He later said he would accept a total of $ 22.5 million in exchange for “total confidentiality, let’s go into the sunset”.
In a phone call, when Avenatti threatened to go public if he wasn’t paid enough, he said: “I’m going to take $ 10 billion from your market cap. But I’m not kidding, “according to the complaint. He later asked a Nike attorney if he had ever” held the client’s balls so he could take away the market cap of $ 5 to $ 6 billion. “
Avenatti was arrested on Monday when he showed up for what he thought would be a final meeting with Nike representatives, prosecutors said.
Prosecutors did not comment on whether there was any validity for the allegations Avenatti had unearthed against Nike.
In the second case in California, Avenatti was charged with embezzling a customer’s money to pay for his own expenses. He negotiated a settlement that required payment of $ 1.6 million to his client on January 10, 2018, but provided the client with a bogus settlement agreement that said the payment date was March 10.
He then took the money and used it to pay for bills for his coffee business – which runs Tully’s Coffee in California and Washington – and for personal expenses, prosecutors said.
California prosecutors also accused him of providing false tax returns to a bank to obtain three loans totaling $ 4.1 million for his law firm and coffee business in 2014.
He could face 50 years in prison on the California charges, prosecutors said.
The high-profile attorney has become a frequent TV presence as Daniels’ attorney.
“Knowing what I know now about Michael Avenatti, I am saddened but not shocked by the news that he was criminally charged today,” Daniels he said Monday. “I made the decision over a month ago to discontinue Michael’s services after discovering that he had dealt with me extremely dishonestly.”