Michael Avenatti Arrested on Bank Fraud and Extortion Charges

Source: Variety:

March 25, 2019 at 13:34

CREDIT: MICHAEL OWEN BAKER/AP/SHUTTERSTOCK

According to the complaint, Avenatti demanded that Nike pay his client $1.5 million because Nike was not renewing his client's contract and that Nike hired Avenatti to conduct an internal investigation. Avenatti's client is not named in the complaint.

Attorney Michael Avenatti was arrested Monday and is facing federal charges on both coasts of bank fraud, misappropriating client funds, and trying to extort a publicly traded company, according to federal prosecutors.

The Southern District of New York has scheduled a press conference to announce charges against Avenatti for trying “to extract more than $20 million in payments” 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 tweeted Monday morning that he would hold a press conference on Tuesday “to disclose a major high school/college basketball scandal perpetrated by @Nike.”

Prosecutors in Los Angeles announced that Avenatti is also facing federal charges of bank fraud and wire fraud. Avenatti is accused of misappropriating a $1.6 million settlement to fund his coffee business, Global Baristas US LLC, and for personal expenses. He is also accused of obtaining $4.1 million in loans from a Mississippi bank by submitting false tax returns.

Avenatti rose to fame representing adult film actress Stormy Daniels in her effort to void a hush-money settlement with attorney Michael Cohen and President Donald Trump. Last year, Avenatti flirted with running for president before deciding against it.

In recent months, he has suffered a series of setbacks. Three weeks ago, he put his former law firm, Eagan Avenatti, into bankruptcy for the second time in two years. The firm was under the control of a receiver at the time.