According to a grievance filed by the FBI in the Southern District of New York, lawyer Michael Avenatti is looking at charges in relation to an alleged multi-million extortion attempt against the Nike corporation. According to CNBC, Avenatti, who was the lawyer who represented the porn star Stormy Daniels in her lawsuit against President Trump, was arrested on Monday. Shortly after noon Monday, Avenatti was taken into custody in New York City.
According to a federal complaint, Avenatti was charged with conspiracy to commit extortion, extortion, transmission of interstate communications with intent to extort, and conspiracy to transmit interstate communications with intent to extort. Federal prosecutors from Los Angeles have filed separate charges of bank and wire fraud against Avenatti, as well.
In the complaint filed by New York prosecutors explained that Avenatti was after millions of dollars from Nike and $1.5 million for an unknown co-conspirator. According to the complaint, Avenatti told Nike’s attorneys that if Nike didn’t pay “I’ll take ten billion dollars off your client’s market cap … I’m not f—ing around.”
The complaint accused Avenatti of planning to hold a media event at the same time as Nike announced their quarterly earnings and the NCAA basketball tournament in order to announce publicly that he had discovered that employees of Nike were guilty of misconduct. The news was announced by Avenatti shortly before the news about the charges filed against him was announced.
As stated in the complaint, Avenatti targeted Nike because it was choosing not to renew a sponsorship contract that it had with an amateur team that was being coached by a client of Avenatti’s. According to the complaint, Avenatti stated that he wouldn’t hold the media event if Nike agreed to hire him to investigate the allegations and pay him between $15 million and $25 million. Apparently, if Nike didn’t like that offer then they could pay $22.5 million to Avenatti and his unnamed client.
Avenatti explained that he was prepared to tell the public that he had evidence that proved that there were one or more Nike employees who “had authorized and funded payments to the families of top high school basketball players and/or their families and attempted to conceal the payments.” Once the meeting was finished, Nike’s lawyers contacted the U.S. Attorney’s Office for the Southern District of New York. This is when investigators began to monitor the communications between Nike and Avenatti.
According to the complaint, Avenatti pointed out that he was displeased about his demands not being met. “You guys know enough now to know you’ve got a serious problem. And it’s worth more in exposure to me to just blow the lid on this thing,” said Avenatti. “A few million dollars doesn’t move the needle for me. I’m just being really frank with you. So if that’s what, if that’s what’s being contemplated, then let’s just say it was good to meet you, and we’re done. And I’ll proceed with my press conference tomorrow.”
According to the complaint, Avenatti continued by saying: “I’m not f—ing around with this thing anymore. So if you guys think that you know, we’re gonna negotiate a million five, and you’re gonna hire us to do an internal investigation, but it’s gonna be capped at 3 or 5 or 7 million dollars, like, let’s just be done,” he said.
According to a news release from the Justice Department, the separate charges against Avenatti from California involve him allegedly embezzling money from a client and defrauding a bank in Mississippi. According to the United States Attorney Nick Hanna, “A lawyer has a basic duty not to steal from his client. Mr. Avenatti is facing serious criminal charges alleging he misappropriated client trust funds for his personal use and he defrauded a bank by submitting phony tax returns in order to obtain millions of dollars in loans.”
“Professionals, including attorneys, who create elaborate schemes that have no purpose other than to mislead others and defraud both their clients and federally insured financial institutions, run the very high risk of prosecution,” said Special Agent in Charge Ryan Korner of IRS-Criminal Investigation during a news release. “The criminal complaint unsealed today shows a pattern of selfish behavior that paints Mr. Avenatti as a lawyer who only represents his own self-interests.”