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.”



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.