Just after midday on Monday afternoon, Michael Avenatti, the attorney known for representing adult film star Stormy Daniels in her lawsuit against President Donald Trump, tweeted about an upcoming press conference that would apparently reveal a bombshell scandal perpetuated by Nike. Less than 15 minutes later, he was arrested in Manhattan—for allegedly attempting to extort Nike for over $20 million dollars.
According to the United States Attorney's Office for the Southern District of New York, Avenatti, who was also slapped with interstate threat charges, threatened to "use his ability to garner publicity to inflict substantial financial and reputational harm on the company if his demands were not met."
Part of this, as a complaint notes, was Avenatti's threat to hold a press conference the night before Nike’s quarterly earnings call and the start of the NCAA tournament that would unearth alleged misconduct by employees of the athletic apparel giant. The complaint goes on to say that Avenatti said he would call off the press conference if the company both agreed to pay out $1.5 million to a client of his, and if they hired Avenatti and said client to conduct an unsolicited "internal investigation," for which they were demanding somewhere between $15 and $25 million. The Associated Press notes that according to court papers, said client looks to be the California coach of an amateur athletic union men’s basketball team.
The SDNY outlined the timeline of Avenatti's alleged threats against the company during a press conference on Monday afternoon. The lawyer first apparently threatened the athletic apparel giant on March 19th, and the United States Attorney’s Office for the Southern District of New York says Nike got in touch with them then. The office then began looking into the incident along with the FBI.
— US Attorney SDNY (@SDNYnews) March 25, 2019
Avenatti allegedly doubled down on his threat on a March 20th phone conversation recorded by officials, saying: "You guys know enough now to know you’ve got a serious problem. And it’s worth more in exposure to me to just blow the lid on this thing. A few million dollars doesn’t move the needle for me. I’m just being really frank with you." The following day, Avenatti and Nike representatives met once again, during which prosecutors say he repeated his threats and stated he would need a $12 million retainer posthaste. When an attorney for Nike told Avenatti that that kind of retainer money had never been seen, Avenatti is said to have asked said attorney if they had ever “held the balls of the client in your hand where you could take five to six billion dollars market cap off of them?”
Additionally, Avenatti was simultaneously arrested and charged by the U.S. Attorney's Office for Central California on Monday, for wire and bank fraud. In a press conference, the Central California U.S. Attorney, Nick Hanna, said that Avenatti allegedly fed a bank falsified income tax returns, and never paid them.
Avenatti is being charged with one count of extortion, as well as one count of conspiracy to transmit interstate communications with intent to extort, one count of conspiracy to commit extortion, one count of transmission of interstate communications with intent to extort. All told, Avenatti could see up to 47 years in prison, AP reports.
“As alleged, Avenatti used illegal and extortionate threats for the purpose of obtaining millions of dollars in payments from a public company," said Manhattan U.S. Attorney Geoffrey S. Berman said in a press release. "Calling this anticipated payout a retainer or a settlement doesn’t change what it was - a shakedown. When lawyers use their law licenses as weapons, as a guise to extort payments for themselves, they are no longer acting as attorneys. They are acting as criminals, and they will held responsible for their conduct.”
BREAKING: Attorney Michael Avenatti criminally charged with four counts of extortion and related conspiracy counts.
Press conference at 2:30 pm. pic.twitter.com/dXUXqITQMZ
— Adam Klasfeld (@KlasfeldReports) March 25, 2019
Daniels said today that she was "saddened but not shocked" to learn that her former attorney was arrested, tweeting that Avenatti had "dealt with" her "extremely dishonestly."
Avenatti is set to appear today in a Manhattan federal court.