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Lawyer Michael Avenatti: ‘For the entirety of my career I have fought against the powerful’. Photo: AFP

‘Old-fashioned shakedown’: Trump nemesis Michael Avenatti is arrested, accused of blackmailing Nike for US$22.5 million

  • Michael Avenatti is accused of threatening to go public with claims of bribery against Nike, unless he was paid US$22.5 million
  • Avenatti, who was separately accused of embezzlement and fraud, faces decades in prison
Crime
Agencies

A year ago, Michael Avenatti’s star was rising as the combative, media-savvy lawyer representing porn actress Stormy Daniels in her legal battles against US President Donald Trump.

He hammered the president as a regular fixture on cable news and baited and bashed critics on Twitter while flirting with his own run for the White House.

Those days seemed like a distant memory as Avenatti was arrested Monday and federal prosecutors on both coasts announced charges that could send him to prison for the rest of his life.

Geoffrey Berman, the US Attorney for the Southern District of New York details the alleged extortion scheme. Photo: Photo: Reuters

Avenatti tried to shake down Nike for as much as US$25 million by using his prominent position to threaten the company with bad publicity, federal prosecutors said.

He was also accused of stealing a client’s settlement money to pay his own expenses and filing fake tax returns to get US$4 million in loans from a Mississippi bank to fund a lavish lifestyle.

He was arrested at a New York law firm where he had gone to meet with Nike executives. It was just minutes after he tweeted that he planned to hold a news conference Tuesday to “disclose a major high school/college basketball scandal perpetrated by @Nike that we have uncovered.”

“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,” said Geoffrey Berman, the US attorney in New York.

Adult film actress Stormy Daniels, a former client of Michael Avenatti, said she was ‘saddened but not shocked’ over the arrest of her former lawyer. Photo: AP

Prosecutors in New York said their investigation began only last week while California investigators had been building a tax case against Avenatti for more than a year.

The allegations “paint an ugly picture of lawless conduct and greed,” said US Attorney Nick Hanna in Los Angeles.

Avenatti describes himself on Twitter as “fighter for good”, but the accusations describe “a corrupt lawyer who instead fights for his own selfish interests”.

Avenatti, 48, was ordered released on US$300,000 bond after a brief court appearance Monday evening in New York. He did not enter a plea. Emerging from the courthouse, he said he expected to be cleared of the charges.

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“For the entirety of my career I have fought against the powerful. Powerful people and powerful corporations. I will never stop fighting that good fight,” he said.

“I am highly confident that when all the evidence is laid bare in connection with these cases, when it is all known, when due process occurs, that I will be fully exonerated and justice will be done.”

Lawyer Michael Avenatti joins protesters outside the White House on July 17, 2018. Photo: Reuters

He gained international fame for representing Daniels, the porn star whom Trump is accused of paying off during the 2016 presidential campaign to keep quiet about an alleged affair. Trump has denied having an affair with Daniels, whose real name is Stephanie Clifford.

Daniels, who is no longer represented by Avenatti, 48, said she was “saddened but not shocked” by his arrest, adding that she fired him after learning he had acted “dishonestly” with her.

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Prosecutors said Avenatti and a co-conspirator initially approached Nike on behalf of a client who coached an Amateur Athletic Union basketball programme sponsored by the company in California.

They claimed to have evidence of misconduct by Nike employees and threatened to hold a news conference last week on the eve of a company’s quarterly earnings call and the start of the NCAA tournament.

According to the criminal complaint, Avenatti told Nike he would go public unless it paid his client US$1.5 million and hired him and the other lawyer to conduct an internal investigation for between US$15 million and US$25 million.

Avenatti also offered to accept a $22.5 million payment for his silence, prosecutors said.

Two people familiar with the investigation confirmed the unidentified co-conspirator was Mark Geragos , a Los Angeles criminal defence lawyer known for his work with celebrities.

Convictions on all charges carry up to 47 years in the New York case and 50 years in the California case, prosecutors said.

Associated Press and Reuters

This article appeared in the South China Morning Post print edition as: ‘Nike target of extortion bid’ by top US lawyer
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