NEW YORK (FOX 5 NY) - Celebrity lawyer Michael Avenatti is accused of trying to extort more than $20 million in payments from Nike by threatening to use his ability to garner publicity in an effort to hurt the company's reputation and finances. But he said he expects to be "exonerated."
Federal prosecutors in New York and California have charged Avenatti with extortion and bank and wire fraud.
FBI agents arrested Avenatti Monday in New York City. The U.S. Attorney for the Southern District of New York spoke about the charges on Monday afternoon.
"Avenatti used illegal and extortionate threats for the purpose of obtaining millions of dollars in payments for himself," U.S. Attorney Geoffrey Berman said. "Avenatti repeatedly pressured the company to agree to pay or risk having Avenatti hold a press conference that he claimed would dramatically drive down the stock price of the company and its market value."
In the New York case, Avenatti is accused of threatening to use his ability to get publicity to harm Nike, the sports apparel and shoe giant.
"Avenatti made clear that he was approaching the company at a time intended to maximize the potential financial damage of such a press conference, namely on the eve of the annual NCAA tournament and the company's quarterly earnings call," Berman said. "Avenatti told the company it could skip paying for an internal investigation, if instead, it simply paid him $22.5 million. Then, Avenatti said he would 'ride off into the sunset.'"
Avenatti appeared briefly in federal court Monday evening. A magistrate judge ordered him released on $300,000 bond. Avenatti did not enter a plea but told reporters outside the courthouse that he expects to be "fully exonerate" and will "never stop fighting the good fight" against powerful people and corporations.
Nike said it has been cooperating with the federal investigation of college basketball for more than a year. The company issued a statement Monday saying that it "will not be extorted or hide information that is relevant to a government investigation."
In the California case, a criminal complaint alleges that Avenatti embezzled a client's money in order to pay his own expenses and debts—as well as those of his coffee business and law firm—and also defrauded a bank by using phony tax returns to obtain millions of dollars in loans. A felony complaint charges him with wire and bank fraud.
Avenatti had represented porn star Stormy Daniels in her failed lawsuit against President Trump.
The charges were revealed shortly after Avenatti announced a Tuesday press conference to discuss claims against Nike related to what he claimed was a "major high school/college basketball scandal" he claimed was being carried out by the shoe company.
Law enforcement wiretapped calls between Avenatti and lawyers for Nike as part of the investigation.
In a call on March 20, 2019, prosecutors say Avenatti told lawyers from Nike that if his demands were not met "I'll go take ten billion dollars off your client's market cap...I'm not f***ing around."