Michael Avenatti at a press conference on February 22, 2019 in Chicago, Illinois.
Photo: Scott Olson / Getty Images
It’s becoming a truism in American scandals these days: you won’t have to see too much far in a salacious and high-profile legal situation to find attorney Michael Avenatti getting involved to some extent. On Monday, US attorneys in New York and Los Angeles indicted former Stormy Daniels attorney with extortion and bank and wire fraud. While the LA accusations were fairly mundane – Avenatti allegedly withheld some $ 800,000 in money from his coffee company from the IRS – the New York extortion charge involves the attorney attempting to blackmail Nike for his alleged practice of paying NCAA recruits to attend schools they sponsor. .
On Monday, Avenatti was arrested in New York, just minutes after Tweeter that he would hold a press conference tomorrow to “disclose a major high school / college basketball scandal perpetrated by @Nike that we discovered”. But in his tweet, he didn’t mention he tried to extort some $ 26.5 million from the company in return for his silence.
Avenatti was released Monday evening with $ 300,000. Speaking to reporters, he proclaimed his innocence and said he “will never stop fighting the good fight”. US attorney Nicola T. Hanna said the bicoastal cases were unrelated, although prosecutors in California and New York collaborated to arrest Avenatti and simultaneously execute search warrants. Below are the nine most astounding details of criminal complaints in new York and Los Angeles.
FBI agent involved in the case says Avenatti and an unindicted and unidentified co-conspirator (“CC-1”) “threatened to hold a press conference on the eve of the quarterly earnings call of Nike and the start of the National Collegiate Athletic Association’s annual tournament. during which he would announce allegations of misconduct by Nike employees. “
Avenatti’s client is an AAU trainer in California who was sponsored by Nike for $ 72,000. According to the criminal complaint, Nike recently decided not to renew the coach’s sponsorship, at which point it claimed it had proof that “Nike employees authorized and funded payments to the families of top players in high school basketball ‘in a manner consistent with that of Adidas employees who were recently sentenced to nine months in prison for paying recruits to attend schools sponsored by their companies.
According to the criminal complaint, “Avenatti said he would refrain from holding the press conference… only if Nike made a payment of $ 1.5 million to an Avenatti customer. … And agreed to “retain” Avenatti and CC-1 to be paid, at a minimum, between 15 and 25 million dollars. Alternatively, and instead of such a service contract, Avenatti and CC-1 demanded a total payment of $ 22.5 million from Nike… to purchase Avenatti’s Silence.
According to “a person familiar with the investigation” who speak with New York Times, Avenatti’s co-conspirator is Mark Geragos, the lawyer who represented Colin Kaepernick in his recently settled collusion case against the NFL. Geragos also represented Kaepernick in his contract negotiations with Nike, which made him one of the highest paid football players in the company. As the Times Says: “Geragos, a CNN contributor, has a client list that includes Michael Jackson, Winona Ryder, Scott Peterson and most recently Jussie Smollett, the actor accused of fabricating a racist and anti-gay attack in Chicago.” On Monday afternoon, Geragos would have been fall as a CNN contributor.
On March 20, 2019, Avenatti and the co-conspirator – allegedly Mark Geragos – spoke on the phone with Nike’s lawyers, demanding that the company submit to the payment agreement. Avenatti gave Nike the above quote, which is quite consistent with the language of an alleged extortionist.
According to the criminal complaint, during a phone call on March 20, Avenatti was frustrated by attempts by Nike’s legal team to block: “I’m not messing around with this, and I don’t continue to play games. … You know enough. now to know that you have a serious problem. And it’s more worth the exposure for me to blow the lid off this thing. A few million dollars doesn’t move the needle for me. I’m just very frank with you. The next day, in a meeting with Nike attorneys, Avenatti asked a lawyer if he ever “held the client’s balls in your hand where you could withdraw $ 5-6 billion in market capitalization?”
Avenatti and his co-conspirator agreed to meet with Nike on Monday, March 25, saying he would hold his press conference on Tuesday if his demands were not met: “If it’s not documented on Monday, we’ll be done. I don’t want to hear from anyone on a bike trip. I don’t want to hear that someone did it, that someone’s grandmother died, or… that the dog ate my homework. I don’t want to hear – none of this is going to go anywhere unless someone is killed in a plane crash. But Avenatti’s Monday turned out a little different: He was arrested minutes after tweeting about a press conference to report Nike’s alleged misconduct.
The first athlete to be involved in this scandal is Deandre Ayton, the 20-year-old center for the Phoenix Suns. In a tweet accusing Nike of misleading investigators, Avenatti wrote: “Ask DeAndre Ayton and Nike about cash payments to his mother and others.” Ayton played for a year at the University of Arizona, which has a clothing contract with Nike. By turning pro, he signed an endorsement with Puma.
Showing just how legally exposed Avenatti was in his alleged extortion attempt, his first contact with Nike was on March 19 – six days later he was under arrest.
The lawyer has handed over his US and Italian passports and can only visit parts of New York and California pending his next court date. He is also limited to spending no more than $ 5,000 on any of his bank accounts.
The, the criminal complaint states that Avenatti provided the People’s Bank of Biloxi, Mississippi, with false federal personal income tax returns from 2011 to 2013, although “Avenatti never filed personal income tax returns for years of taxation 2011, 2012 and 2013 ”.
According to LA’s criminal complaint, in January 2018 – two months before filing a lawsuit against the president on behalf of Stormy Daniels – Avenatti arranged a $ 1.5 million settlement to be transferred to a newly attorney’s trust account. open. The complaint states: “Rather than passing its client’s share of the settlement proceeds to its client, Avenatti used the entire $ 1.6 million for its own purposes, including paying for GBUS-related expenses. [the company which operated Tully’s Coffee]. Avenatti allegedly lied to his client, claiming that payment for the settlement was not due until March 2018; at the end of this period, Avenatti “made his client believe that the payment of 1.6 million dollars had never been received”.
According to LA’s criminal complaint:
There are likely reasons to believe that Avenatti took a number of positive warnings to obstruct IRS collection action regarding unpaid GBUS payroll taxes, among other things, by lying to a revenue officer at the IRS… and asking employees to deposit over $ 800,000 in cash with Tully’s. stores… in a bank account associated with a separate entity to avoid privileges and withdrawals by the IRS.
A number of former BGUS employees have expressed fears that Avenatti will seek revenge on them if he learns that they were cooperating with the government investigation.