MANHATTAN (CN) — Less than a year after his representation of Stormy Daniels signaled the downfall of the president's personal fixer, attorney Michael Avenatti received a one-two punch from federal prosecutors on both coasts Monday.
The complaint in New York charges Avenatti with trying to extort more than $20 million from Nike, and another brought in Los Angeles says he embezzled a client’s money to pay personal expenses.
Prosecutors say the extortion scheme began with a meeting with an unnamed co-conspirator on March 19.
Avenatti, 48, allegedly threatened Nike’s attorneys over the phone the next day: “I'll go take 10 billion dollars off your client's market cap ... I’m not fucking around.”
At a rare press conference this afternoon, Manhattan U.S. Attorney Geoffrey Berman displayed a timeline where he showed that the celebrity lawyer had tweeted a teaser about a potential college basketball scandal.
“Something tells me that we have not reached the end of this scandal,” Avenatti tweeted on March 21. “It is likely far far broader than imagined...”
Referring to that post, Berman said: “This was Michael Avenatti’s shot across Nike’s bow.”
Shortly before firing off that tweet, Avenatti appeared in New York for a meeting with lawyers.
Prosecutors say Avenatti demanded a $12 million retainer at that meeting, which was recorded consensually, and that the other participants responded that Nike had never done an investigation that “breaks $10 million.”
In response, according to the complaint, Avenatti asked whether that attorney ever “held the balls of the client in your hand where you could take 5 to 6 billion dollars market cap off of them?”
Laying out the terms of a $22.5 million confidential deal, Avenatti said: “Full confidentiality, we ride off into the sunset,” according to the complaint.
Berman asserted that these hardball tactics were something stronger than zealous advocacy for a client.
“A suit and tie doesn’t mask the fact that at its core, this was an old fashioned shakedown,” Berman added.
A spokesman for Nike echoed that sentiment in a statement.
“Nike will not be extorted or hide information that is relevant to a government investigation,” the spokesman said, adding that the company cooperated in the NCAA corruption investigation for more than a year.
“When Nike became aware of this matter, Nike immediately reported it to federal prosecutors,” he added. “When Mr. Avenatti attempted to extort Nike over this matter, Nike with the assistance of outside counsel at Boies Schiller Flexner, aided the investigation.”
On the eve of Nike’s quarterly earnings call and the NCAA tournament, prosecutors say, Avenatti threatened to hold a press conference announcing allegations of employee misconduct unless the company made a deal.
“Avenatti stated that he would refrain from holding the press conference and harming Nike only if Nike made a payment of $1.5 million to a client of Avenatti’s in possession of information damaging to Nike, i.e., Client-1, and agreed to ‘retain’ Avenatti and CC-1 to conduct an ‘internal investigation’ – an investigation that Nike did not request — for which Avenatti and CC-1 demanded to be paid, at a minimum, between $15 and $25 million,” the 11-page complaint states.
The Wall Street Journal names that unidentified co-conspirator as Mark Geragos, a fellow celebrity attorney known for his activism in the Armenian-American community and for representing such Hollywood icons as Michael Jackson, Winona Ryder and Gary Conduit. Geragos declined to comment.
“Alternatively, and in lieu of such a retainer agreement, Avenatti and CC-1 demanded a total payment of $22.5 million from Nike to resolve any claims Client-1 might have and additionally to buy Avenatti’s silence,” it continues.
Over in Los Angeles, prosecutors leveled two charges of wire and bank fraud. They say Avenatti negotiated a $1.6 million settlement to be paid on Jan. 10 this year, but then gave the client a bogus deal with a false payment date of March 10.