Michael Avenatti facing jail time on wire fraud, bank fraud and extortion charges

Michael Avenatti facing jail time on wire fraud, bank fraud and extortion charges

Michael Avenatti is accused by federal prosecutors in New York of operating “an old-fashioned shakedown” by trying to extort between $15 and $25 million from Nike, part of a string of bombshell claims against the celebrity lawyer.

The former attorney for adult-film star Stormy Daniels also was charged with wire fraud and bank fraud in a separate case out of California. Avenatti was taken into custody and expected to appear in court later on Monday in New York City.

Prosecutors said Avenatti 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.”

“As alleged, Michael Avenatti approached Nike last week with a list of financial demands in exchange for covering up allegations of misconduct on behalf of the company,” FBI Assistant Director in Charge William Sweeney Jr. said in a statement. “The lofty price tag included a $1.5 million payoff for Avenatti’s client and upwards of tens of millions of dollars for the legal services of his firm – services Nike never requested. This is nothing more than a straightforward case of extortion”

The counts against Avenatti in the New York case are extortion, transmission of interstate communications with intent to extort, conspiracy to transmit interstate communications with intent to extort, and conspiracy to commit extortion. He faces up to 47 years in prison if convicted on all charges.

Manhattan U.S. Attorney Geoffrey S. Berman said at a news conference Monday that Avenatti used illegal tactics and threats in an effort to obtain millions of dollars for himself. He said if Nike did not meet his demands, “the company might die.”

“Our system of justice requires and relies on attorneys, members of the bar, to not simply follow the law, but uphold its finest principles and ideals,” Berman told reporters. “But when lawyers use their law licenses as weapons, as a guise to extort payments for themselves, they are no longer acting as attorneys. They are acting as criminals, and they will be held responsible for their conduct.”

Avenatti and a co-conspirator – who is still unidentified – met with attorneys for Nike on March 19, 2019, and “threatened to release damaging information” if the company did not agree to make multi-million dollar payments to them, as well as an additional $1.5-million payment to a client Michael Avenatti claims to represent.

He told the attorneys that if his demands were not met, he would “go take ten billion dollars off your client’s market cap … I’m not f—ing around.”

The complaint said Michael 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.

Which he did:

“Nike will not be extorted or hide information that is relevant to a government investigation,” the company said in a statement. “Nike has been cooperating with the government’s investigation into 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.

“Nike firmly believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors.”

The co-conspirator was eventually identified as an attorney licensed to practice in the state of California, and was ” also known for representation of celebrity and public figure clients.” Meanwhile, the alleged client was identified as a coach for an amateur athletic union men’s basketball program based in California.

On top of that, at a completely separate news conference in California, federal investigators announced that additional criminal charges against Avenatti.

In that case in California, federal investigators said Avenatti embezzled a client’s settlement money to pay his own expenses and debts — as well as those of his coffee business and law firm.

U.S. Attorney Nick Hanna said Michael Avenatti was charged with wire fraud and tax fraud stemming from a two-year IRS tax investigation after he allegedly obtained $4.1 million in loans for his law firm and coffee business from a Mississippi bank by using phony tax returns stating that he had made $4,562,881 in 2011, $5,423,099 in 2012, and $4,082,803 in 2013.

Avenatti also stated that he had paid more than $1 million in estimated taxes to the IRS in 2012 and 2013 when, according to prosecutors, but he actually owed the IRS $850,438 plus interest and penalties for the years 2009 and 2010. In addition to that, authorities say, Avenatti paid no personal income taxes for 2011, 2012 and 2013 and paid no estimated taxes in 2012 and 2013.

“[Avenatti] is a corrupt lawyer who instead fights for his own selfish interest,” Hanna said, adding that the allegations against the attorney “paint an ugly picture of lawlessness and greed.”

Stormy Daniels released a statement on Monday saying she was not at all “shocked” by the charges against Avenatti.

“Knowing what I know now about Michael Avenatti, I am saddened but not shocked by news reports that he has been criminally charged today,” Daniels said. “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.”

Charles Harder, who represented President Trump in the Stormy Daniels case, told Fox News Avenatti’s arrest marked “a great day for the American justice system.”

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