New York—On Monday afternoon, Michael Avenatti, the former attorney for adult film actress Stormy Daniels was arrested and charged by two different courts on two different chargesextortion and embezzlement.

Case #1: Just Do It (Or Don’t)—Nike Won’t Be Extorted By Anyone

[U.S. v. Avenatti, Case No. 19-MJ-2927]

New York federal prosecutors for allegedly extorting more than $20 million from Nike in exchange for keeping quiet about allegations of misconduct surrounding certain Nike employees.

According to Prosecutors, he and another attorney, clamed to be Mark Geragos by both CBS News and The Wall Street Journal, threatened to release damaging information about the company if it didn’t meet their demands.

While, Geragos was not charged in the complaint, he was soon dropped by CNN after being identified as Avenatti’s co-conspirator. Geragos currently represents the former “Empire” star, Jussie Smollett, who was accused of paying two men to attack him in his own scheme to raise his professional profile and salary on the Fox series.

Avenatti was released after signing his own $300,000 personal recognizance bond, as to both the New York and California cases, and ordered to surrender his passport. The attorney will not have to remain in custody so long as he keeps his $300,000 promise to appear in court when he is supposed to. Avenatti has also been instructed to report any transactions that exceed $3,000 or more to the court.

In the complaint, it is alleged that Avenatti threatened to extort Nike, Inc. on the eve of its quarterly earnings call if Nike didn’t pay his client $1.5 million and hire Avenatti and another attorney (Geragos), to conduct an internal investigation costing between $15 million and $25 million.

To view the Complaint, please click here.

Case #2: California Hits Hard With Embezzlement Charges

[U.S. v. Avenatti, Case No.: 19-MJ-241]

Separate and apart from the New York indictment, Los Angeles federal prosecutors on Monday also charged Avenatti with embezzling client funds to pay his own debts and expenses. According to the government, the attorney further defrauded a Mississippi bank by submitting false tax returns in order to obtain $4.1 million in loans.

Prosecutors say that after negotiating a $1.6 million settlement for a client, the attorney then was accused of giving the client a false settlement agreement stating the funds were to be paid three months later than the actual settlement agreement called for. He then allegedly used those settlement funds to pay for his expenses and those of his coffee business, Global Baristas US LLC.

What’s Avenatti Got to Say?

Emerging from court, the attorney addressed reporters and said in part, “as all of you know, for the entirety of my career I have fought against the powerful, powerful people and powerful corporations. I will never stop fighting that good fight. I am highly confident that when all the evidence is laid bare in connection with these cases, when it is all known, when due process occurs, that I will be fully exonerated and justice will be done.”

He later followed up on Twitter thanking his supports and denying any wrong-doing pertaining to Nike.

According to the Manhattan U.S. Attorney General, Geoffrey S. Berman, Avenatti’s conduct “had nothing to do with zealous advocacy or any other kind of legitimate legal work. Instead, [he] used illegal, extortionate threats for the purpose of obtaining millions of dollars in payments for himself.”

The Manhattan AG later went on to add that “by engaging in [this] conduct, Avenatti was not acting as an attorney, [..] a suit and tie does not mask that at its core, this was an old-fashioned shakedown.”

But, what prompted all this?

Prosecutors believe that back on March 19, Avenatti met with Nike attorneys, claiming to represent the coach of a youth basketball team that was previously sponsored by the company. Avenatti claimed the coach had information about Nike employees who were involved in illegal payments being made to the families of high school student athletes and threatened to hold a press conference to announce the allegations if the demands weren’t met.

Immediately following this encounter, Nike contacted the Manhattan U.S. attorney’s office, which launched an investigation alongside the FBI.

What’s Nike Doing About It?

If anything is clear, it’s that Nike isn’t afraid of a fight. In its statement, the company made clear that it wouldn’t be extorted nor would it 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,” the company said.

Avenatti is scheduled to appear in court in California on April 1, with preliminary hearings in New York set for April 25.

Counsel

In the New York Case, U.S. v. Avenatti, Case No. 19-MJ-2927 in the U.S. District Court for the Southern District of New York, the government is represented by Matthew Podolsky, Robert L. Boone and Robert B. Sobelman of the Manhattan U.S. attorney’s office.

In the California case, U.S. v. Avenatti, Case No. 19-MJ-241 in the U.S. District Court for the Central District of California, the government is represented by Julian L. André and Brett A. Sagel of the U.S. Attorney’s Office for the Central District of California.

Avenatti is represented by Sylvie Levine of the Federal Defenders of New York.

Stay tuned as GritDaily is following these matters closely.