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UNDER ARREST

Feds Arrest Avenatti for Allegedly Extorting $20 Million From Nike

Stormy Daniels’ attorney also allegedly used $1.6 million of a client’s settlement for his own purposes.

Kate Briquelet3.25.19 1:11 PM ET

Lawyer Michael Avenatti was hit with a slew of federal charges in Los Angeles and New York on Monday—including an allegation he tried to extort Nike for up to $25 million and an accusation he used a client’s settlement cash to solve personal money problems.

The bombshell announcements by federal authorities come nearly two weeks after Stormy Daniels dumped Avenatti as her lawyer, and follows a steady stream of legal troubles, including allegations from a former colleague that Avenatti secreted funds from a bankruptcy court.

As a criminal complaint was made public in the Southern District of New York, federal prosecutors in Los Angeles were planning to announce bank fraud and wire fraud charges against the fame-hungry lawyer, who became a celebrity after representing Daniels in her lawsuit against President Donald Trump and his onetime fixer.

In a statement posted to her Twitter account, Daniels said she was “saddened by not shocked” by the news and claimed that Avenatti had been dishonest in his dealings with her.

According to the New York criminal complaint, Avenatti and others conspired to extort Nike by threatening to damage the company’s reputation if it didn’t agree to make multimillion dollar payments to Avenatti and an alleged co-conspirator, who isn’t identified in the documents, except as “an attorney licensed to practice in the state of California, and similarly known for representation of celebrity and public figure clients.”

As part of Avenatti’s alleged extortion, he demanded $1.5 million for his client, a men’s basketball coach for an amateur team in California.

The threats allegedly began on March 19, when Avenatti and the unnamed conspirator met with Nike’s attorneys. The next day, Avenatti and the alleged accomplice spoke with the lawyers for Nike by phone. During the conversation, Avenatti warned the shoe brand’s counsel there would be hell to pay if his demands for millions weren’t met.

“I’ll go take ten billion dollars off your client’s market cap … I’m not fucking around,” Avenatti said, according to the criminal complaint.

In an affidavit connected to the complaint, FBI Special Agent Christopher Harper, Avenatti “used threats of economic and reputational harm to extort Nike.”

“Specifically, Avenatti threatened to hold a press conference on the eve of Nike’s quarterly earnings call and the start of the annual [NCAA] tournament at which he would announce allegations of misconduct by employees of Nike,” Harper added.

Avenatti then offered to cancel the press conference if Nike made a $1.5-million payment to Avenatti’s client, who claimed to have damning information on the company.

Avenatti also demanded Nike “retain” him and his co-conspirator to conduct an “internal investigation” on the matter, prosecutors say. They demanded to be paid at least $15 million to $25 million for their work, the complaint alleges.

If Nike didn’t want to “retain” the pair, the company could pay $22.5 million to “resolve any claims” the client might have. The millions would also ensure Avenatti’s silence on the damaging information, court papers allege.

In court papers, prosecutors said the client is a coach of an amateur athletic union (AAU) men’s basketball program based in California.

The AAU program was coached by Avenatti’s client and had a sponsorship agreement that resulted in Nike paying the program $72,000 annually.

Avenatti is charged with extortion, along with conspiracy to transmit interstate communications with intent to extort; conspiracy to commit extortion; and transmission of interstate communications with intent to extort.

The complaint filed in Los Angeles says that Avenatti used a client’s $1.6 million settlement to pay his own debts and then lied to client and said he never got the settlement money.

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