Legal

Michael Avenatti Arrested For Bank, Wire Fraud

Attorney Michael Avenatti has been charged in two federal cases with wire and bank fraud, as well as allegedly attempting to extort more than $20 million from Nike.

The Wall Street Journal (WSJ) reported that the U.S. attorney’s office in Los Angeles filed a criminal complaint, accusing Avenatti — best known perhaps as Stormy Daniels' lawyer — of embezzling a client’s money to pay his own expenses and debts. He is also charged with supposedly defrauding a bank through fake tax returns.

In addition, federal prosecutors in Manhattan charged Avenatti with extortion and conspiracy after he allegedly threatened Nike's lawyers, reportedly saying that he and an unnamed co-conspirator would release damaging information about the company unless it forked over millions of dollars. Two sources said that the co-conspirator is Attorney Mark Geragos, who couldn’t be immediately reached for comment.

“Nike will not be extorted or hide information that is relevant to a government investigation,” Nike said in a statement on Monday (March 25).

Avenatti reportedly represented a client identified in the complaint as the coach of an amateur men’s basketball program in California, which had a sponsorship agreement with Nike. One source claimed that the client is Gary Franklin Sr., who coached a team called California Supreme. Avenatti alleged that his client had evidence that Nike was making secret payments to high school basketball players.

According to the complaint, Avenatti and Geragos supposedly met with Nike attorneys in New York on March 19 and threatened to release the damaging information, unless the company agreed to pay the two lawyers millions of dollars to conduct an internal investigation, as well as another $1.5 million to Avenatti's alleged client.

Working with federal prosecutors, Nike's lawyers then reportedly agreed to record another conversation with Avenatti. On a March 20 phone call, Avenatti allegedly made the monetary demands again, and if they weren't met, he supposedly warned, “I’ll go take $10 billion off your client’s market cap. … I’m not f—ing around.”

——————————

NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

TRENDING RIGHT NOW