NEW YORK —A day after he was charged with trying to extort millions of dollars from Nike, attorney Michael Avenatti has launched a new public attack on the company.
In a string of tweets Tuesday, the lawyer accused Nike of "trying to divert attention from their own crimes."
Ask DeAndre Ayton and Nike about the cash payments to his mother and others. Nike’s attempt at diversion and cover-up will fail miserably once prosecutors realize they have been played by Nike and their lawyers at Boies. This reaches the highest levels of Nike.
— Michael Avenatti (@MichaelAvenatti)
March 26, 2019 Prosecutors say Avenatti approached Nike last week and threatened to expose rules violations involving an amateur youth team sponsored by the company unless it paid him up to $25 million.
Nike wouldn't answer questions but said it has been cooperating with a federal investigation into NCAA basketball for a year.
In his tweets, Avenatti denied that the company was cooperating, "unless you count lying in response to subpoenas and withholding documents as 'cooperating.'"
He said "Nike's attempt at diversion and cover-up will fail miserably."
Avenatti rose to prominence representing porn actress Stormy Daniels in her legal battles against President Donald Trump.
Trump critic Michael Avenatti, 48, of Century City, was arrested in New York City today pursuant to a two-count felony complaint charging him with wire fraud and bank fraud. He also was arrested pursuant to a separate federal case filed in New York.
In a statement from the Department of Justice (U.S. Attorney Central District California): According to an affidavit filed with the criminal complaint in this case, Avenatti negotiated a settlement which called for $1.6 million in settlement money to be paid on January 10, 2018, but then gave the client a bogus settlement agreement with a false payment date of March 10, 2018. The affidavit states that Avenatti misappropriated his client’s settlement money and used it to pay expenses for his coffee business, Global Baristas US LLC, which operated Tully’s Coffee stores in California and Washington state, as well as for his own expenses. When the fake March 2018 deadline passed and the client asked where the money was, Avenatti continued to conceal that the payment had already been received, court documents said.
Avenatti also allegedly defrauded a bank in Mississippi by submitting to the lender false tax returns in order to obtain three loans totaling $4.1 million for his law firm and coffee business in 2014. According to the affidavit, Avenatti obtained the loans by submitting fabricated individual income tax returns (Forms 1040) for 2011, 2012, and 2013, reporting substantial income even though he had never filed any such returns with the Internal Revenue Service. The phony returns stated that he earned $4,562,881 in adjusted gross income in 2011, $5,423,099 in 2012, and $4,082,803 in 2013, according to the affidavit. Avenatti allegedly also claimed he paid $1.6 million in estimated tax payments to the IRS in 2012 and paid $1.25 million in 2013. In reality, Avenatti never filed personal income tax returns for 2011, 2012 and 2013 and did not make any estimated tax payments in 2012 and 2013. Instead of the millions of dollars he claimed to have paid in taxes, Avenatti still owed the IRS $850,438 in unpaid personal income tax plus interest and penalties for the tax years 2009 and 2010, court papers state. The affidavit also alleges that, as part of his loan applications, Avenatti also submitted a fictitious partnership tax return for his law firm.
“A lawyer has a basic duty not to steal from his client,” said United States Attorney Nick Hanna. “Mr. Avenatti is facing serious criminal charges alleging he misappropriated client trust funds for his personal use and he defrauded a bank by submitting phony tax returns in order to obtain millions of dollars in loans.”
“Professionals, including attorneys, who create elaborate schemes that have no purpose other than to mislead others and defraud both their clients and federally insured financial institutions, run the very high risk of prosecution,” said Special Agent in Charge Ryan Korner of IRS-Criminal Investigation. “The criminal complaint unsealed today shows a pattern of selfish behavior that paints Mr. Avenatti as a lawyer who only represents his own self interests.”
If convicted on both charges, Avenatti will face a statutory maximum sentence of 50 years in federal prison. Avenetti’s initial court appearance will be today in New York. He is expected to face the criminal charges in the California case in United States District Court in Santa Ana at a later date.My statement regarding my former attorney Mr. Avenatti.. pic.twitter.com/9aKYCPNN6y
— Stormy Daniels (@StormyDaniels)
March 25, 2019 While prosecutors did not name the co-conspirator, The Wall Street Journal reports it is celebrity attorney Mark Geragos.
Geragos, who was hired as a member of the legal defense team of "Empire" actor Jussie Smollett, who has been charged over allegedly inventing a fake hate crime against himself, in February, per CBS Chicago.
In the U.S. District for the Southern District of New York, Avenatti and a client, a former A.A.U. basketball coach, are accused of attempting to extort money "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," prosecutors said in a statement.
Prosecutors say Michael Avenatti's alleged financial crimes funded his "lavish lifestyle," including more than $200,000 in spending a month and owning a $5 million home in Laguna Beach https://t.co/HuSzfp0oip pic.twitter.com/P9pMpqNvU3
— CBS News (@CBSNews)
March 25, 2019 Court documents were filed just hours after Avenatti tweeted an announcement to hold a news conference on Tuesday to accuse Nike of “a major high school/college basketball scandal.”
Tmrw at 11 am ET, we will be holding a press conference 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.
— Michael Avenatti (@MichaelAvenatti)
March 25, 2019 (AP, KNX 1070, CBS)
