Controversial attorney Michael Avenatti became a media sensation in March 2018 when he took legal action against President Trump on behalf of an adult film star, and he was even said to be mulling a 2020 presidential bid. However, those aspirations took a major hit on March 25 when federal prosecutors in both California and New York filed felony charges against Avenatti that could put him behind bars for many years.
U.S. attorneys in New York have charged Avenatti with attempting to extort between $15 million and $25 million from the sports apparel manufacturer Nike. According to prosecutors, Avenatti threatened to go public with allegations about payments he claims Nike made to amateur basketball players if the company did not pay him and an unindicted co-conspirator millions of dollars for unneeded and unwanted legal work.
While Avenatti was being placed in custody in New York, media outlets began reporting that U.S. attorneys in California had also charged him with a raft of felony counts including embezzlement. Federal prosecutors say Avenatti ran his legal practice like a Ponzi scheme and used client funds to pay for an extravagant lifestyle that included a private jet and exotic cars. They also claim that he used the money to pay debts run up by his floundering coffee company. Avenatti is also accused of fraudulently qualifying for millions of dollars in loans by submitting falsified tax returns to a bank in Mississippi.
Media reports suggest that Avenatti was arrested just days after Nike contacted authorities about the alleged extortion scheme, but the charges filed in California likely came after a long and painstaking investigation. This is because federal prosecutors rarely take action unless they feel their evidence is strong and their cases are compelling. Criminal defense attorneys with experience in federal white-collar crime cases would likely advise individuals who believe that they may be the subject of such an investigation to retain legal counsel as soon as possible.
Source: CNBC, “Stormy Daniels’ ex-lawyer Michael Avenatti arrested for alleged $20 million extortion scheme against Nike, embezzling client’s money, defrauding bank”, Kevin Breuninger, March 26, 2019