Michael Avenatti Charged with Extortion, Bank and Wire Fraud

April 11, 2019 by Dan McCue
Michael Avenatti arrives at the Ronald Reagan Federal Building & U.S. Courthouse in Santa Ana for a hearing on criminal charges of bank and wire fraud Monday, April 1, 2019 in Santa Ana, Calif. (Allen J. Schaben/Los Angeles Times/TNS)

Attorney Michael Avenatti, the longtime foe of President Donald Trump best known for representing porn actress Stormy Daniels, was arrested in New York on Monday on charges of extortion and bank and wire fraud.

Geoffrey S. Berman, U.S. Attorney for the Southern District of New York, said Avenatti has been charged in Manhattan with allegedly trying to extort the sports apparel giant Nike for about $20 million, threatening to release damaging information about the company if it did not meet his demands.

In a separate announcement, Nick Hanna, U.S. Attorney for the Central District of California, said Avenatti has also been charged with bank and wire fraud in Los Angeles for allegedly embezzling money from a client and defrauding a Mississippi bank through fake tax returns.

Prosecutors in New York claim Avenatti requested a meeting with lawyers from Nike at the company’s New York offices on March 19, and that during that meeting, the high-profile attorney said he represented a coach of an amateur youth travel basketball team that had recently lost its sponsorship with Nike.

Avenatti allegedly claimed he had evidence of Nike employees funneling illegal payments to top high school basketball prospects and their families, and threatened to hold a press conference detailing the allegations to coincide with the beginning of the NCAA basketball tournament and Nike’s quarterly earnings call.

The complaint says Avenatti offered to scrap the press conference if Nike paid his client for $1.5 million and hired Avenatti to conduct an internal investigation.

Later that afternoon, Nike’s attorneys contacted the U.S. Attorney’s Office to report the alleged extortion attempt.

The next day, March 20, two of the Nike attorneys held a phone call with Avenatti that was recorded by law enforcement. Avenatti allegedly reiterated his demands for payment for him and his client.

The complaint says Avenatti was recorded saying, “I’m not f—ing around with this, and I’m not continuing to play games.

“You guys know enough now to know you’ve got a serious problem,” he allegedly continued. “And it’s worth more in exposure to me to just blow the lid on this thing. A few million dollars doesn’t move the needle for me. I’m just being really frank with you.”

Prosecutors say that on March 21, the day of the Nike earnings call and the first day of the NCAA tournament, the attorneys again met at Nike’s offices.

“If [Nike] wants to have one confidential settlement and we’re done, they can buy that for $22.5 million and we’re done,” Avenatti is allegedly heard saying on a recording made by law enforcement.

“Full confidentiality, we ride off into the sunset,” he is quoted as saying.

Avenatti was arrested Monday when he once again showed up at Nike’s New York offices for a meeting with its attorneys.

“As alleged, Avenatti used illegal and extortionate threats for the purpose of obtaining millions of dollars in payments from a public company,” U.S. Attorney Berman said. “Calling this anticipated payout a retainer or a settlement doesn’t change what it was – a shakedown.  When lawyers use their law licenses as weapons, as a guise to extort payments for themselves, they are no longer acting as attorneys. They are acting as criminals, and they will held responsible for their conduct.”

In California, the criminal complaint filed Monday alleges Avenatti lied about his income to obtain more than $4 million in loans from a Mississippi bank in 2014.

The complaint alleges Avenatti gave The Peoples Bank bogus tax returns showing more than $14 million in earnings for the three preceding years.

In fact, the complaint alleges, Avenatti never filed returns for those years, and owed the IRS $850,000 from prior years.

An attorney for Avenatti could not immediately be reached for comment.

Avenatti, 48, and a resident of Century City, California, came to national prominence in 2017 through his representation of Stormy Daniels, the adult film star who alleged she had an affair with President Trump and was paid for her silence in the weeks before the 2016 election.

In a statement posted on Twitter, Daniels said, “Knowing what I know now about Michael Avenatti, I am saddened but not shocked by news reports that he has been criminally charged today.

“I made the decision more than a month ago to terminate Michael’s services after discovering that he had dealt with me extremely dishonestly and there will be more announcements to come,” she continued, asking the media respect her decision to withhold further public comment.

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