MANHATTAN (CN) — Before uttering a word of his closing arguments, a federal prosecutor let embattled celebrity attorney Michael Avenatti’s own voice deliver the case against him.
“I’ll go take $10 billion off your client’s market cap,” Avenatti warned attorneys for Nike, in a recording played to a New York jury this morning.
For Assistant U.S. Attorney Matthew Podolsky, the remark proved the crime: “This is what extortion looks like.”
According to his federal indictment, Avenatti threatened to expose a corruption scandal at Nike unless the company paid more than $1.5 million — and hired him and co-counsel Mark Geragos to conduct an internal investigation for a retainer between $15 million and $25 million.
“It’s worth more in exposure for me to just blow the lid on this thing,” Avenatti said on tape, speaking about a plan to hold a press conference and call The New York Times. “A few million dollars doesn’t move the needle with me.”
Avenatti for his part has insisted since his March 2019 arrest that the misconduct he planned to expose was real, and that powerful forces — both in the government and in corporate America — joined up to crush him for it.
The Southern District of New York previously sent three executives from another sportswear giant, Adidas, to jail, and that prosecution later spun off into a grand jury investigation into Nike, probing possible offenses like bribery, mail fraud, wire fraud and money laundering.
Prosecutor Podolsky called that backstory a distraction, arguing that truth is no defense to extortion.
Avenatti’s attorney Scott Srebnick countered that Nike’s actions form the heart of the case.
“This is not a distraction,” Srebnick asserted. “It’s an extraction, an extraction of the truth.”
The Securities and Exchange Commission continues to investigate Nike’s conduct.
Summations from both parties largely circled around Avenatti’s client Gary Franklin, an amateur basketball coach who founded a nonprofit basketball program called California Supreme that Nike sponsored.
Avenatti’s relationship with his former client went south. Franklin turned star witness for the prosecution, despite his previously high opinion of the celebrity lawyer.
“I just thought he was a good attorney, a good lawyer, and I thought he could go in and represent my case,” Franklin testified last week.
Franklin and his associate, consultant Jeffrey Auerbach, both testified that Avenatti left them in the dark about negotiations that benefitted him more than his client. They said their demands were much smaller than the contracts drawn up by Avenatti for the internal Nike investigation.
“Michael Avenatti, facing a mountain of debts, saw a light at the end of the tunnel,” Podolsky told the jury. “He saw a meal ticket named Gary Franklin.”
The trajectory of Avenatti’s professional relationship with Franklin and Auerbach mirrors that of his most famous client: adult-film star Stormy Daniels, who became a household name after accusing President Trump of making hush-money payments to her to conceal their affair.
Like Daniels, Franklin and Auerbach at first admired Avenatti’s talent for gaining media attention.
“Publicity, exposure: That’s what they were looking for from Michael Avenatti,” Srebnick told jurors, referring to the men.
By that time, Avenatti and Daniels already had become cable news fixtures after intervening in the case of Trump’s now-incarcerated attorney Michael Cohen and suing the president for calling Daniels a liar, an act described in their lawsuit as defamation. Social media stardom followed, with adoring fans who funded Avenatti’s political aspirations.
Text messages presented as evidence at trial showed that Franklin and Auerbach believed they could not afford Avenatti and his co-counsel Geragos, except by appealing to the men’s reputations for taking on Goliaths.
“We will appeal to their sense of justice and duty,” Auerback texted.
Another high-powered defense attorney from Los Angeles, Geragos is known for advocating on behalf of victims of the Armenian genocide and representing Susan McDougal, a former business partner of President Bill Clinton convicted in the Whitewater scandal. The lawyer’s interests in sports and politics also collided in his representation of activist ex-NFL star Colin Kaepernick, whose promising career nosedived amid controversy when he kneeled during the National Anthem.
Avenatti’s defense team often uses the words “brash,” “aggressive” and “bullish” to describe their client, who was fond of branding his litigation style as “Flight Club.”
“In the words of Nike itself, he went in there to ‘Just do it’ for his client,” Howard Srebnick, a partner the firm Black Srebnick, quipped.
The two Srebnick brothers delivered their defense summations on Avenatti’s behalf back-to-back on Tuesday afternoon.
Whatever the outcome of this trial, Avenatti’s criminal exposure is not over, nor are the ranks of his aggrieved clients.
Daniels also turned against her famous lawyer, accusing him of trying to cheat her out of a publishing advance on her book deal. Those allegations are at the heart of a separate prosecution of Avenatti, also in Manhattan Federal Court.