BC-US--Michael Avenatti-Arrest,6th Ld-Writethru, US
LOS ANGELES (AP) — Michael Avenatti, the attorney best known for representing porn actress Stormy Daniels in lawsuits against President Donald Trump, was arrested Monday on charges he tried to extort millions of dollars from Nike and embezzled a client’s money to pay his own expenses.
Avenatti, 48, was charged with extortion and bank and wire fraud in separate cases in New York and California. He was arrested in New York.
The U.S. attorney in New York, Geoffrey S. Berman, said Avenatti engaged in “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,” Berman said.
The allegations “paint an ugly picture of lawless conduct and greed,” said Nick Hanna, the U.S. attorney in Los Angeles. Avenatti describes himself on Twitter as an attorney and advocate, but the accusations describe “a corrupt lawyer who instead fights for his own selfish interests.”
Prosecutors in New York said their investigation began only last week and was complete in days.
The New York case accuses Avenatti of threatening to use his ability to get publicity to harm Nike. In the California case, he allegedly misused a client’s money to pay his debts and those of his coffee business and law firm. Federal prosecutors said he also defrauded a bank by using phony tax returns to obtain millions of dollars in loans.
Avenatti allegedly threatened to hold a news conference last week 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 attorney and a co-conspirator demanded to be paid $15 million to $25 million and an additional $1.5 million for an Avenatti client to remain silent, the complaint said.
Shortly before the charges came to light, Avenatti tweeted that he planned to hold another news conference regarding Nike on Tuesday morning. Less than 45 minutes later, prosecutors announced the extortion case.
Nike officials told investigators that Avenatti claimed to know of rules violations by an amateur basketball team sponsored by Nike. Executives immediately reported the threats to federal authorities.
The company “firmly believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors,” Nike said in a statement.
The co-conspirator, who was not identified, is also an attorney licensed to practice in California who represents celebrities and public figures, court papers said. The Avenatti client is a coach of an amateur athletic union men’s basketball program in California, according to the papers.
The AAU program coached by the client was sponsored by Nike for $72,000 annually, the complaint said.
Avenatti was in custody and did not respond to an email requesting comment or phone calls and text messages from The Associated Press.
He rose to national prominence by representing Daniels, whose real name is Stephanie Clifford, in a lawsuit to break a confidentiality agreement to speak about her alleged affair with Trump. He also made headlines in recent weeks for representing two women who accused R&B star R. Kelly of sexual abuse, and he briefly explored the idea of a presidential bid last year.
Daniels said she was “saddened but not shocked” by the arrest. She issued a statement Monday on Twitter saying she fired Avenatti a month ago after “discovering that he had dealt with me extremely dishonestly.” She said she would not elaborate.