What to Know
Attorney and prominent Trump opponent Michael Avenatti is charged in NY with trying to extort millions of dollars from Nike, prosecutors say
In addition to the New York charges, Avenatti is also facing bank and wire fraud charges in California for alleged embezzlement
Avenatti was arrested at the midtown Manhattan law offices of Boies Schiller Flexner, a firm whose website says it has done work for Nike
Former Stormy Daniels attorney and prominent Trump critic Michael Avenatti has been charged in New York with trying to extort Nike for more than $20 million as well as bank and wire fraud in California, according to separate complaints from federal prosecutors on opposite coasts.
Avenatti was arrested early Monday afternoon at the midtown Manhattan law offices of Boies Schiller Flexner, a firm whose website says it has done past work for Nike. The federal complaint against Avenatti notes that he was scheduled to meet with the attorney for the company on Monday.
In that case, he's accused of trying to extract millions in payments from Nike by threatening to use his ability to garner publicity to inflict substantial financial and reputational harm on the company if his demands were not met.
Avenatti appeared briefly in court Monday evening in New York and was ordered released on $300,000 bond. He did not enter a plea. Emerging from the courthouse, he thanked the federal agents who arrested him for being courteous and professional.
"As all of you know, 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."
The extortion complaint against Avenatti lists him and "a co-conspirator not named as a defendant herein," who is identified only as CC-1. Two law enforcement sources familiar with the case identified CC-1 as famed celebrity attorney Mark Geragos. Both Geragos and his firm declined comment to NBC News.
In a statement, Geragos' attorney said: "It is important to note that Mr Geragos has not been charged with any criminal conduct whatsoever."
In addition to the New York charges, Avenatti is facing bank and wire fraud charges in Los Angeles for alleged embezzlement.
The FBI allegedly became aware of a multi-million extortion scheme in which Avenatti used threats "of economic and reputational harm to extort Nike." The complaint said Avenatti threatened to hold a news conference on the eve of Nike's quarterly earnings call and the start of the NCAA tournament to announce allegations of misconduct by Nike employees.
The alleged scheme took place in the span of three days.
Shortly before his arrest, Avenatti had tweeted that he would be holding a news conference Tuesday "to disclose a major high school/college basketball scandal perpetrated by @Nike that we have uncovered. This criminal conduct reaches the highest levels of Nike and involves some of the biggest names in college basketball."
Avenatti and a co-conspirator allegedly demanded to be paid a minimum of $15 to $25 million and an additional $1.5 million for an Avenatti client to remain silent, the complaint said. The court papers said the alleged co-conspirator, who was not identified in court papers, is also an attorney licensed to practice in California. It said the co-conspirator, like Avenatti, represents celebrities and public figures.
The court papers said the client is a coach of an amateur athletic union men's basketball program in California. The complaint said the AAU program coached by the Avenatti client was sponsored by Nike for $72,000 annually.
The federal complaint claims there was a meeting between Avenatti and Nike on March 19, 2019. Avenatti, who was representing the AAU coach whose team previously had a contractual relationship with Nike that the company decided not to renew, said his client had evidence that one or more Nike employees authorized and funded payments to families of top high school basketball players and the families attempted to conceal those payments, the complaint said.
The federal complaint further states that Avenatti told Nike that he would hold a press conference about the alleged payments to high school players' families, but that he would "refrain" from holding the conference if Nike agreed to pay $1.5 million to his client and that the company must hire him and his co-conspirator to conduct an internal investigation of Nike.
It was after the March 19 meeting, that Nike immediately contacted federal prosecutors in New York to tell them about the alleged extortionist threats made against them, United States Attorney for the Southern District of New York Geoffrey Berman said in a press conference Monday afternoon.
In a subsequent March 21 meeting, according to the complaint, Avenatti had another meeting with Nike attorneys in which he said that "he would require a $12 million retainer to be paid immediately and to be "deemed earned when paid," with a minimum guarantee of $15 million in billings and a maximum of $25 million, "unless the scope changes.""
It was at that March 21 meeting, the complaint says, that Avenatti agreed to meet once again with the attorney for the company on Monday.
Avenatti was charged in the New York case with conspiracy to transmit interstate communications with intent to extort, conspiracy to commit extortion, transmission of interstate communications with intent to extort and extortion. The charges carry a potential penalty of 47 years in prison.
"By engaging in the conduct alleged in the complaint, Avenatti was not acting as an attorney," Berman said. "A suit and tie does not mask the fact that at its core, this was an old-fashioned shakedown."
Assistant Director-in-Charge of the New York Office of the FBI William F. Sweeney Jr. said that Avenatti's alleged behavior "is illegal and it will not be tolerated, especially when committed by a lawyer who is supposed to use his license to practice law not to willfully violate it."
In a statement, Nike said that it "will not be extorted or hide information that is relevant to a government investigation. Nike has been cooperating with the government’s investigation into NCAA basketball for over a year." The company added that it "firmly believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors.”
In the California case, Avenatti allegedly 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, according to prosecutors in California.
Berman said the investigation and charges in the New York case and California case are entirely different and not related.
Avenatti rose to national prominence representing Daniels in her claims against President Trump, though the attorney said earlier this month that he no longer represents her. Avenatti also claimed to have evidence showing singer R. Kelly sexually attacking young girls, a claim Kelly has denied.
In a statement shortly after his news broke of his arrest, Daniels said she was "saddened but not shocked" by the criminal allegations.
"I made the decision more than a month ago to terminate Michael's services after discovering that he had dealt with me extremely dishonestly and there will be more announcements to come," Daniels said.
Avenatti was arrested on a felony domestic violence charge in Los Angeles in November but the district attorney declined to press felony charges.