Michael Avenatti Accused of Trying to Extort Nike for $25M
March 29, 2019
This week has been an extremely eventful week in the realm of American politics. While the majority of media outlets focus has been strictly on the Russia-Trump investigation, Michael Avenatti has claimed a spot in the headlines after he was arrested and federally charged for allegedly attempting to extort Nike for up to $25 million. Avenatti became a public figure in early 2018, when his client Stormy Daniels filed a lawsuit against President Trump, claiming that a nondisclosure agreement between the two was invalid.
Avenatti was taken into custody on Monday, March 25, and was officially charged with wire fraud, bank fraud and attempted extortion of the mega-corporation Nike. The wire fraud and bank fraud came from a separate case in California and was not related to the extortion charges made against him. He appeared Monday evening in Manhattan federal court and did not enter into a plea. He was released on a $300,000 bond.
If convicted in both cases, Avenatti faces up to 100 years in prison. He maintains his innocence, and he believes that he will be exonerated by the courts.
Avenatti and Nike
According to prosecutors, Avenatti allegedly tried to extort Nike “by threatening to use his ability to garner publicity to inflict substantial financial and reputational harm on the company if his demands were not met.” The complaint filed said Avenatti threatened to hold a news conference on the eve of Nike’s quarterly earnings call and the start of the NCAA tournament to announce allegations of misconduct by Nike employees.
Nike made it clear in their statement to Fox News that they would not be threatened in any way by Avenatti. “Nike will not be extorted or hide information that is relevant to a government investigation,” said the company. “Nike has been cooperating with the government’s investigation into the NCAA basketball for over a year. When Nike became aware of this matter, Nike immediately reported it to federal prosecutors. When Mr. Avenatti attempted to extort Nike over this matter, Nike with the assistance of outside counsel at Boies Schiller Flexner, aided the investigation.”
It was also revealed that a co-conspirator worked alongside Avenatti in an attempt to aid the alleged extortion against the company. The co-conspirator was identified by The Associated Press and The Wall Street Journal as Mark Geragos, a high-profile attorney that has represented celebrities such as Michael Jackson and “Empire” star Jussie Smollett.
According to the New York complaint, Avenatti and Geragos met with Nike’s attorneys on March 19 and threatened to release “damaging information” if the company did not agree to make a multi-million-dollar payment to each of them, as well as an additional $1.5 million payment to a client that Avenatti supposedly represented.
That “damaging information” turned out to be accusations from Avenatti that Nike had been illegally arranging payments to high school basketball players. He allegedly told the attorneys that if his demands were not met, he would “go make ten billion dollars off your client’s market cap… I’m not f—ing around.” The law office of Geragos & Geragos has not officially commented on the allegations that Geragos co-conspired with Avenatti to extort the company.
Avenatti’s Rise to Fame
Avenatti quickly became a household name after he was hired by adult film actress Stormy Daniels, whose real name is Stephanie Clifford, to represent her in her case against President Donald Trump and his then-attorney Michael Cohen. CNN and other mainstream media outlets had Avenatti on their show over 70 times as he discussed the scandal between his client Daniels and President Trump.
Consequently, Avenatti became a well-known public figure and gained a large number of followers on Twitter and other social media platforms. His follower count on Twitter shot up right before the summer of 2018, where he managed to gain over half a million followers in just a few weeks. He managed to become a key figure in the “resistance” led by those who oppose President Trump. However, Daniels and Avenatti cut ties in February of 2019.
Daniels Speaks Out
Daniels made a public statement regarding the arrest of Avenatti on Twitter. She stated that although she was “saddened” to hear the news of his arrest, the situation did not “surprise” her. She spoke about her decision to terminate Avenatti’s legal services in February and stated that he is not one to be trusted.
“Knowing what I know now about Michael Avenatti, I am saddened but not shocked by news reports that he has been criminally charged today,” said Daniels in her Tweet.
“I made the decision more than a month ago to terminate Michael’s services after discovering that he had dealt with me extremely dishonestly and there will be more announcements to come. I ask that the media respect my decision to withhold further public comment regarding Mr. Avenatti at this time”.
Like Avenatti, Daniels became a household name after she challenged the President of the United States. She claimed that a nondisclosure agreement between her and President Trump was invalid because the President never signed it himself. She was ordered to stay quiet about a supposed affair that President Trump had with her in 2006. The alleged affair took place while First Lady Melania Trump was pregnant with Baron Trump.
Geragos Dropped by CNN
Shortly after The Wall Street Journal identified him as a co-conspirator working alongside Avenatti, CNN cut ties with Geragos. He was a CNN contributor who frequently appeared on the program to discuss a variety of topics. His name was scrubbed from the CNN Profiles page, a page that features the faces and profiles of each CNN employee and contributor.
Geragos is a prominent attorney to troubled Hollywood stars. He currently represents former “Empire” star Jussie Smollett, who was accused of paying two men to attack him in what police say was a scheme to raise his profile and salary on the Fox series. Charges against Smollett were recently dropped early this week.
Avenatti Lashes Out on Twitter
Avenatti was quick to make statements on Twitter following his release from custody in Manhattan on Monday. “I want to thank all of my supporters for your kind words and support today,” Avenatti’s statement began. “It means a lot to me. I am anxious for people to see what really happened. We never attempted to extort Nike & when the evidence is disclosed, the public will learn the truth about Nike’s crime and coverup.”
Avenatti also insisted that Nike’s claim of “cooperating with investigators for over a year” was false and that the company has been lying and withholding documents from said investigators. He accused Nike of trying to “divert attention from their own crimes.”
He also appeared on CBS This Morning to discuss the criminal charges filed against him. When asked about the case, Avenatti stated that he is “nervous” and “scared” about the possibility of going to prison. However, he also said he was confident that the “truth” would come out.
When asked about what the truth is, he focused more on what he was accusing Nike of, rather than what he was being accused of. “The truth is, for years Nike and its executives have been funneling payments to amateur players, high school players and their handlers and family members in an effort to get them to go to colleges that were Nike colleges and ultimately to the NBA so they can sign a shoe deal with Nike,” Avenatti said.
Prosecutors Are Confident Avenatti is Guilty
Despite Avenatti’s claims of his innocence, both New York and California prosecutors are confident that they have a strong case against him and will be able to convict him on all charges. He faces up to 47 years in prison for the charges he received from New York and up to 50 years in prison for the charges he received in California.
There are several financial documents and text messages between Avenatti and Geragos that contain evidence of a conspiracy to commit extortion as well as bank and wire fraud.
