Michael Avenatti Released On Bond After Arrest On Federal Fraud And Nike Extortion Charges – Update

By Erik Pedersen, Lisa de Moraes

Michael Owen Baker/Shutterstock

(UPDATED 5:50 PM with Avenatti posting bond) Celebrity attorney Michael Avenatti has been released on $300,000 bond, and says he expects to be “fully exonerated” of federal extortion and bank and wire fraud charges.

The attorney who sued President Donald Trump on behalf of Stormy Daniels is lawyering up himself today. Avenatti was arrested after federal prosecutors in New York charged him with trying to extort $20 million from Nike and feds in Los Angeles filed wire and bank fraud charges.

He is expected to make his first court appearance today in Manhattan. He is expected to face the charges in the California case at a later date.

Avenatti faces four counts of extortion from the Southern District of New York for attempting to extract more than $20M in payments from Nike, by “threatening to use his  ability to garner publicity to inflict substantial financial and reputational harm on the company if his demands were not met.”

“Our system of justice requires and relies on attorneys and member of the bar to not simply follow the law, but uphold its finest principles and ideals,” Geoffrey S. Berman. U.S. Attorney for the Southern District of New York said at a Monday afternoon presser.

“When lawyers use their law license as weapons to extort payments for themselves, they are no longer acting as attorneys; they are acting as criminals and they will be held responsible for their conduct,” Berman continued.

“A suit and tie does not mask the fact that, at its core, this was an old-fashioned shakedown,” Berman insisted.

He pointedly remarked that Avenatti’s conduct “had nothing to do with zealous advocacy for the client or any other kind of legitimate legal work,” anticipating Avenatti’s legal defense. Instead, Avenatti used illegal and extortionate threats to obtain millions for himself.”

According to Berman, the celebrity attorney pressured Nike to pay or risk having him hold one of his well-known, widely televised press conferences which he claimed would dramatically drive down the stock price of the company and its market value.

In one recorded meeting, Avenatti said, if Nike did not meet his demand, the company might die or, if not, was “going to be inflicted with cut after cut after cut after cut.”

The drama played out last week over just a few days. Avenatti first met with company reps on Tuesday, claiming to represent a client who coached an amateur high school basketball team sponsored by Nike. The team recently lost that contract worth $72K a year, and a coach claimed to have information about potential misconduct by a Nike employee, Berman alleged.

Avenatti made clear he was approaching the company at a time  intended to inflict maximum damage: on the eve of the NCAA tourny and the company’s quarterly earnings call.

Following that first March 19 meeting, Nike reps contacted Berman’s office.  All subsequent interactions between Nike and Avenatti were recorded and overseen by the FBI and Berman’s office.

Avenatti was arrested in Manhattan on Monday, at the site of a planned final meeting with Nike reps, William Sweeney, assistant director-in-charge of the New York’s FBI office said at the presser.

Earlier Monday, Avenatti tweeted that he would hold a news conference on Tuesday “to disclose a major high school/college basketball scandal perpetrated by the Oregon-based shoe and apparel giant:

In L.A., he is charged with two counts of “[embezzling] a client’s money in order to pay his own expenses and debts — as well as those of his coffee business and law firm — and also defrauded a bank by using phony tax returns to obtain millions of dollars in loans.” (Read the filing here.

“Avenatti negotiated a settlement which called for $1.6 million in settlement money to be paid on January 10, 2018, but then gave the client a bogus settlement agreement with a false payment date of March 10, 2018,” Nick Hanna, U.S. Attorney for the Central District of California, said in a statement. ‘The affidavit states that Avenatti misappropriated his client’s settlement money and used it to pay expenses for his coffee business, Global Baristas US LLC, which operated Tully’s Coffee stores in California and Washington state, as well as for his own expenses. When the fake March 2018 deadline passed and the client asked where the money was, Avenatti continued to conceal that the payment had already been received, court documents said.”

Hanna added: “Avenatti also allegedly defrauded a bank in Mississippi by submitting to the lender false tax returns in order to obtain three loans totaling $4.1 million for his law firm and coffee business in 2014.”

If convicted of both LA charges, Avenatti faces a maximum of 50 years in federal prison.

With his steely glare and hardboiled demeanor, Avenatti became a fixture on cable news and TV talk shows last year as the lawyer representing adult film star Daniels (née Stephanie Clifford) in her lawsuit against Trump. It was case that exposed the $130,000 “hush money” payment to Daniels that eventually led to Trump lawyer/fixer pleading guilty to campaign-finance and other violations and implicating Trump in testimony before Congress last month.

He longer represents Daniels, and his law firm has filed for bankruptcy.

Said Ryan Korner, Special Agent in Charge of IRS-Criminal Investigation: “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. 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.”

This article was printed from https://deadline.com/2019/03/michael-avenatti-arrested-nike-extortion-wire-fraud-bank-fraud-1202582056/