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Michael Avenatti arrested and charged with extortion and fraud in 2 separate federal cases

In one case, he tried to extort more than $20 million from Nike, according to prosecutors.

by Rex Santus
Mar 25 2019, 6:04pm

Celebrity attorney Michael Avenatti has been arrested and charged with federal wire fraud and bank fraud in California as well as four counts of extortion in New York, prosecutors from two separate districts announced Monday.

Avenatti tried to extort more than $20 million from Nike, according to a federal complaint filed in New York’s Southern District. In a second, apparently unrelated case, Avenatti embezzled a client’s money to, in part, pay off expenses for his coffee business, Global Baristas US LLC, which operated Tully’s Coffee stores, according to federal prosecutors in California.

Avenatti purchased the coffee stores in 2013 with actor Patrick Dempsey, who sued Avenatti that same year to break their business partnership. The prosecutors in California also accused the lawyer of defrauding a bank with phony tax returns to obtain millions of dollars in loans.

Avenatti is facing 50 years in federal prison over the charges in California. He will have his initial court appearance in New York on Monday, and he’s scheduled to have another in California at a later date.

In an attempt to extort money from NIke, Avenatti threatened to hold a press conference on the eve of Nike’s quarterly earnings call and announce allegations of misconduct by Nike employees, prosecutors said. "I'll go take ten billion dollars off your client's market cap,” Avenatti told Nike’s attorneys on March 19, according to the complaint. “I'm not fucking around."

Avenatti posted about the news conference on Twitter about an hour before he was arrested.

Avenatti allegedly laid out to Nike executives what he would do if they did not comply with his demands: that he would lead a public-relations assault against the corporation — even if the allegations were “bullshit.”

"Now, 90 percent of that is going to be bullshit because it's always bullshit 90 percent of the time, always, whether it's R. Kelly or Trump, the list goes on and on,” he said, according to the complaint.

“But 10 percent of it is actually going to be true, and then what's going to happen is that this is going to snowball ... and every time we got more information, that's going to be in the Washington Post, the New York Times, ESPN, a press conference, and the company will die — not die, but they are going to incur cut after cut after cut after cut, and that's what's going to happen as soon as this thing becomes public."

Avenatti is no stranger to run-ins with the law. He was arrested for felony domestic violence in Los Angeles last November, though prosecutors announced last month that he would not face charges, due to insufficient evidence.

Most famous for representing porn star Stormy Daniels in her lawsuit against President Donald Trump, Avenatti was also involved in the recent controversy surrounding R. Kelly. Avenatti represented a client who said he was a “whistleblower” against Kelly and provided video to prosecutors he said depicted Kelly having sex with underage girls.

Cover image: Stormy Daniels and her lawyer Michael Avenatti hold a press conference at the Federal Courthouse in New York City following the hearing for President Donald Trump's lawyer, Michael Cohen, at the US District Court for the Southern District of New York State. (Dennis Van Tine/STAR MAX/IPx)