Federal prosecutors in New York have arrested and charged celebrity attorney Michael Avenatti with attempting to extort more than $20 million in payments from 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.
Avenatti, 48, had previously represented adult film star Stormy Daniels in her lawsuit against President Donald Trump and his former lawyer Michael Cohen.
According to the complaint, Avenatti threatened to hold a press conference on the eve of Nike’s quarterly earnings call and the start of the NCAA men’s basketball tournament at which he would announce allegations of misconduct by Nike employees.
“Avenatti stated that he would refrain from holding the press conference and harming Nike only if Nike made a payment of $1.5 million to a client of Avenatti’s in possession of information damaging to Nike … and agreed to ‘retain’ Avenatti and [an unidentified co-conspirator] to conduct an ‘internal investigation’ — an investigation that Nike did not request, for which Avenatti and [the co-conspirator] demanded to be paid, at a minimum, between $15 [million] and $25 million,” the complaint said.
Nicholas Biase, spokesman for the Southern District of New York, told ESPN in a statement Monday that “the defendant was arrested earlier today and is in custody. He is expected to be presented in Manhattan federal court [Monday] afternoon.”
Federal prosecutors identified the co-conspirator as “an attorney licensed to practice in the state of California, and similarly known for representation of celebrity and public figure clients.”
The complaint says Avenatti’s client is a “coach of an amateur athletic union (‘AAU’) men’s basketball program based in California.”
“For a number of years, the AAU program coached by Client-1 had a sponsorship agreement with Nike pursuant to which Nike paid the AAU program approximately $72,000 annually,” the complaint says.
Federal prosecutors announced the charges against Avenatti less than an hour after he tweeted that he was holding a press conference on Tuesday morning “to disclose a major high school/college basketball scandal perpetrated by @Nike that we have uncovered. This criminal conduct reaches the highest levels of Nike and involves some of the biggest names in college basketball.”
Avenatti was also charged in California on Monday with wire and bank fraud, pursuant to a criminal complaint alleging he embezzled a client’s money in order to pay his own expenses and debts — as well as those of his coffee business and law firm — and also defrauded a bank by using phony tax returns to obtain millions of dollars in loans.
The Associated Press contributed to this report.