A few months ago he was teasing a run for president on the Democratic ticket; now he's out on $300,000 bond with the agreement not to run from the feds. On Monday, celebrity lawyer Michael Avenatti — the former attorney of porn star Stormy Daniels who was given inordinate amounts of airtime on mainstream media outlets to level accusations against Donald Trump — was arrested and charged with extortion and bank and wire fraud in an alleged "shakedown" attempt of one of the world's most influential companies. His alleged co-conspirator is reportedly none other than fellow celebrity attorney Mark Geragos, who has represented embattled actor and singer Jussie Smollett and former NFL QB Colin Kaepernick.
More details about the case have come to light and the old saw that "(alleged) truth is stranger than fiction" comes to mind. The charges against Avenatti have been brought by prosecutors from deep blue states on both coasts: New York and California. Their claims are straight out of a movie: Avenatti attempted to extort tens of millions from Nike with the threat that he'd use his celebrity status to do massive financial and PR damage to them if they didn't "retain" him and his partner to conduct a faux internal investigation into alleged illegal actions by Nike employees.
The way the feds obtained evidence to charge him — over a period of just a few days — is remarkable. In his complaint submitted to the Southern District of New York, FBI Special Agent Christopher Harper details both the allegations and the way in which the FBI quickly ensnared Avenatti.
Harper writes that "in or about March 2019," Avenatti and an unnamed co-conspirator ("CC-1," allegedly Geragos) "devised a scheme to extort a company by means of an interstate communication by threatening to damage the company's reputation if the company did not agree to make multi-million dollar payments to Avenatti and CC-1, and further agree to pay $1.5 million to a client of Avenatti's."
The complaint states that on March 19, Avenatti and his co-conspirator met with attorneys for Nike Inc. and threatened to release their damaging allegations about Nike employees if they didn't agree to pay them to "'retain' Avenatti and CC-1 to conduct an 'internal investigation' — an investigation that Nike did not request, for which Avenatti and CC-1 demanded to be paid, at a minimum, between $15 and $25 million." Avenatti and his partner then spoke again with Nike's attorney the next day by phone, Avenatti threatening, "I'll take ten billion dollars off your client's market cap...I'm not f***ing around."
The only hiccup for Avenatti and his celebrity attorney partner in the alleged "shakedown" scheme is that Nike had tipped off the FBI early on.
After Avenatti's co-conspirator contacted Nike and demanded an in-person meeting with their legal representatives to discuss a "sensitive matter," the two attorneys met with Nike's lawyers on Tuesday in Gerago's office in New York and presented what they said was evidence that one or more of Nike's employees had "authorized and funded payments to the families of top high school basketball players and/or their families and attempted to conceal those payments, similar to conduct involving a rival company [Adidas] that had recently been the subject of a criminal prosecution in this district."
If Nike didn't agree to pay their client $1.5 million and "retain" the two lawyers for an internal investigation, Avenatti said he'd "hold his press conference" and present the accusations.The complaint states that Nike's attorney reached out to Avenatti's partner and asked for more time; Avenatti gave them two more days.
It was at this point that Nike got the feds involved. As a result, the complaint contains a lot of details, including direct quotes from Avenatti threatening Nike if they didn't agree to his demands.
On a secretly recorded March 20 call, Avenatti told Nike's attorneys that he expected to "get a million five for our [first client]," threatening, "if you don't wanna do that, we're done here." After reiterating that he wanted at least $10 million not to hold the press conference, the complaint quotes Avenatti as declaring: "I'm not f***ing around with this, and I'm not continuing to play games ...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. 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. ... And I'll go, and I'll go take 10 billion dollars off your client's market cap. But I'm not f***ing around."
The next in-person meeting was videotaped. Harper quotes the transcript as documenting Avenatti telling Nike's attorneys: "I just wanna share with you what's going to happen if we don't reach a resolution ... As soon as this becomes public, I am going to receive calls from all over the country from parents and coaches and friends and all kinds of people. This is always what happens. And they are all going to say, 'I've got an email or a text message.' Now, 90 percent of that is going to be bullsh** because it's always bullsh** 90 percent of the time, always, whether it's R. Kelly or Trump. The list goes on and on. But 10 percent of it is actually going to be true, and then what's going to happen is that this is going to snowball. That's going to be the Washington Post, the New York Times, ESPN, a press conference, and the company will die — not die, but they are going to incur cut after cut after cut after cut, and that's what's going to happen as soon as this thing becomes public."
In a final meeting on March 25, which was also recorded by the FBI, Avenatti told Nike, "If this is not papered on Monday, we're done. I don't want to hear about somebody on a bike trip. I don't want to hear that somebody has, that somebody's grandmother passed away or ... the dog ate my homework, I don't want to hear — none of it is going to go anywhere unless somebody was killed in a plane crash, it's going to go zero, no place with me..."
Avenatti denies the charges, stating Monday that he's "highly confident that when all of the evidence is laid bare in connection with these cases, when it is all known, when due process occurs, that I will be fully exonerated and justice will be done."