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Porn Star Atty Michael Avenatti Charged by NY Feds With Extortion, Bank & Wire Fraud

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Attorney Michael Avenatti, who gained notoriety while representing adult film star Stormy Daniels in her lawsuit against President Donald Trump, was charged Monday with a slew of federal crimes by federal prosecutors in both New York and California.

Federal prosecutors in New York alleged in a criminal complaint that Mr. Avenatti attempted to extort Nike, a corporation traded on the New York Stock Exchange, for more than $20 million dollars if demands made by him and his client were not met. Mr. Avenatti went as far as to threaten to “inflict substantial financial and reputational harm” against Nike, according to a statement released by prosecutors in the Southern District of New York.

“Today we announced criminal extortion charges against Michael Avenatti,” Geoffrey Berman, the United States Attorney for the Southern District of New York, said Monday afternoon at a press conference. “The charges are based on Avenatti’s scheme to extract more than $20,000,000 in payments from a public company by threatening to use his ability to garner publicity to inflict financial and reputable harm on the company.”

Mr. Avenatti threatened that if his financial demands for a settlement were not met he would hold a press conference with the intent to damage Nike’s quarterly earnings.

He told company representatives that if his client, a former basketball coach, was not compensated $1.5 million dollars as part of a settlement, and that, if Nike did not agree to retain Mr. Avenatti to conduct an internal investigation into claims brought by his client with the promise of being paid between $15 and $25 million dollars for such services, that he would move forward with his press conference.

He threatened to hold his press conference on March 21, the same day which Nike’s quarterly earnings phone call occurred.

Mr. Avenatti also demanded to be paid at least $10 million dollars for the sole purpose of not holding his damaging press conference, according to the criminal complaint.

Later Monday afternoon, federal prosecutors in the Central District of California released a statement and subsequent court documents charging Mr. Avenatti with bank and wire fraud.

Prosecutors alleged in that charging document that Mr. Avenatti embezzled money obtained from a client settlement to fund a lavish lifestyle and that he submitted fraudulent tax returns to a federally-insured bank in order to obtain loans for his law firm and a coffee shop.

“A lawyer has a basic duty not to steal from his client,” Nick Hanna, the United States Attorney for the Central District of California, said in a statement. “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,” Ryan Korner, a Special Agent in Charge of IRS Criminal Investigations, said at a press conference Monday afternoon. “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.”

Mr. Avenatti faces up to fifty years in prison on the charges leveled against him in California. He will make his first court appearance Monday evening before a federal judge in Manhattan.

In a statement released to the media, Nike said, “Nike will not be extorted or hide information that is relevant to a government investigation. 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.”

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