Lawyer Michael Avenatti is facing charges related to an alleged multi-million extortion attempt against Nike, according to a complaint filed by the FBI in the Southern District of New York.
A federal complaint said Avenatti was charged with extortion, conspiracy to commit extortion, conspiracy to transmit interstate communications with intent to extort, and transmission of interstate communications with intent to extort.
Federal prosecutors in Los Angeles have also filed separate charges of wire fraud and bank fraud against Avenatti.
Avenatti was taken into custody shortly after noon in New York City, according to CNBC.
The complaint filed by New York prosecutors said Avenatti sought millions from Nike and $1.5 million for an unnamed co-conspirator.
The complaint said that Avenatti told Nike attorneys that if it did not pay, “I’ll take ten billion dollars off your client’s market cap … I’m not f—ing around.”
The complaint alleged that Avenatti planned to hold a media event timed to Nike’s quarterly earnings announcement and the NCAA basketball tournament to publicly announce that he had discovered employee misconduct at Nike.
Avenatti tweeted about the event shortly before news broke of the charges filed against him.
Tmrw at 11 am ET, we will be holding a press conference 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.
— Michael Avenatti (@MichaelAvenatti) March 25, 2019
According to the complaint, Nike was targeted because it was not renewing a sponsorship contract it had with an amateur team coached by Avenatti’s client.
Avenatti said that he would not hold the media event if Nike agreed to hire him to conduct an internal investigation of the allegations and pay him between $15 million and $25 million, according to the complaint. If Nike did not like that option, Avenatti offered them a deal to pay $22.5 million to Avenatti and his unnamed client, the complaint stated.
Avenatti said he was prepared to tell the public that he had evidence that one or more Nike employees “had authorized and funded payments to the families of top high school basketball players and/or their families and attempted to conceal the payments,” the complaint stated.
After that meeting, Nike’s attorneys contacted the U.S. Attorney’s Office for the Southern District of New York.
According to the complaint, investigators began monitoring communications between Avenatti and Nike. The complaint quotes Avenatti at one point displeased that his demands were not being met.
“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,” Avenatti said, according to the complaint. “A few million dollars doesn’t move the needle for me. I’m just being really frank with you. So if that’s what, if that’s what’s being contemplated, then let’s just say it was good to meet you, and we’re done. And I’ll proceed with my press conference tomorrow.
“I’m not f—ing around with this thing anymore. So if you guys think that you know, we’re gonna negotiate a million five, and you’re gonna hire us to do an internal investigation, but it’s gonna be capped at 3 or 5 or 7 million dollars, like, let’s just be done,” he said, according to the complaint.
The charges against Avenatti from California involve allegedly defrauding a bank in Mississippi and embezzling money from a client, according to a Justice Department news release.
“A lawyer has a basic duty not to steal from his client,” United States Attorney Nick Hanna said. “Mr. Avenatti is facing serious criminal charges alleging he misappropriated client trust funds for his personal use and he defrauded a bank by submitting phony tax returns in order to obtain millions of dollars in loans.”
“Professionals, including attorneys, who create elaborate schemes that have no purpose other than to mislead others and defraud both their clients and federally insured financial institutions, run the very high risk of prosecution,” Special Agent in Charge Ryan Korner of IRS-Criminal Investigation said in the news release.
“The criminal complaint unsealed today shows a pattern of selfish behavior that paints Mr. Avenatti as a lawyer who only represents his own self interests.”
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