Attorney Michael Avenatti arrested in alleged Nike extortion scheme: Prosecutors

"At its core, this was an old-fashioned shakedown," prosecutors said Monday.

March 25, 2019, 8:31 PM

Federal prosecutors in New York and California announced charges against Michael Avenatti on Monday in separate cases targeting the former personal attorney for adult film actress Stormy Daniels.

Avenatti, who was arrested in New York City on Monday morning, stands accused of attempting to extort Nike for $20 million and faces additional charges of bank- and tax-fraud.

Charges in the separate cases were announced almost simultaneously. In a press conference on Monday, U.S. Attorney for the Central District of California Nick Hanna said investigators in California and New York coordinated the release of charges and Avenatti’s arrest, though the cases were pursued separately.

Avenatti was charged with two counts of extortion and two counts of conspiracy to extort from the Southern District of New York, as well as one count of bank fraud and one count of wire fraud from the Central District of California.

Michael Avenatti appears on "Good Morning America," Sept. 27, 2018.
ABC News

Prosecutors in New York wrote in a criminal complaint filed Sunday that Avenatti and an unnamed co-conspirator threatened to release damaging information about Nike if the sportswear giant refused to make multi-million dollar payments to them and an additional $1.5 million payment to an individual Avenatti claimed to represent.

In a phone call with lawyers for Nike last week, Avenatti and the unnamed co-conspirator allegedly said if those demands were not met, "I'll go take $10 billion dollars off your client's market cap. I'm not f***ing around," according to the criminal complaint.

ABC News has learned that the alleged unnamed co-conspirator referenced in the New York case against Avenatti is celebrity attorney Mark Geragos. He has not been charged or arrested, and he did not reply to a request for comment.

The U.S. Attorney's Office, citing its policy of not naming people who are not charged, declined to comment. An attorney for Geragos, Benjamin Brafman, declined to comment. Avenatti was not immediately available for a comment.

"At its core, this was an old-fashioned shake-down," U.S. Attorney for the Southern District of New York Geoffrey Berman said at a press conference on Monday.

Nike said in a statement that the company “will not be extorted or hide information that is relevant to a government investigation," adding that "when Mr. Avenatti attempted to extort Nike over this matter, Nike with the assistance of outside counsel at Boies Schiller Flexner, aided the investigation."

Earlier Monday, Avenatti tweeted plans to hold a press conference "to disclose a major high school/college basketball scandal perpetrated by @Nike."

Federal investigators told ABC News that Avenatti was taken into custody approximately 15 minutes later.

He was ordered released on $300,000 bond Monday evening and was required to surrender his American and Italian passports. He did not enter a plea in court Monday.

Upon his release from custody, Avenatti said he was confident at when the evidence is known "I will be fully exonerated and justice will be done."

Avenatti will next appear in court on the New York charges on April 25 and in California on April 1. His travel will be restricted to the Southern and Eastern Districts of New York and the Central District of California

In addition to the extortion charges in New York, prosecutors in California filed an affidavit over the weekend accusing Avenatti of stealing funds from a client to pay off his own expenses and "defrauded a bank in Mississippi by submitting to the lender false tax returns in order to obtain three loans totaling $4.1 million."

"[Avenatti] violated the principals of honesty and fairness," Hanna said Monday.

Avenatti, 48, gained prominence for representing Daniels in a defamation lawsuit against President Donald Trump. In December, a federal judge in California ordered Daniels to pay Trump just under $300,000 in legal fees after throwing out her defamation suit in October.

Earlier this year, Daniels announced that Avenatti no longer represented her. In a statement from Daniels and her current attorney, Clark Brewster, on Monday, the adult film star said she was "saddened but not shocked by news reports that he has been criminally charged today."

"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," Daniels said. "I ask that the media respect my decision to withhold further public comment regarding Mr. Avenatti at this time."

ABC News' Joshua Hoyos and Lauren Pearle contributed to this report.

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