What to Know
Attorney and prominent Trump opponent Michael Avenatti is charged in NY with trying to extort millions of dollars from Nike, prosecutors say
In addition to the New York charges, Avenatti is also facing bank and wire fraud charges in California for alleged embezzlement
Avenatti was arrested at the midtown Manhattan law offices of Boies Schiller Flexner, a firm whose website says it has done work for Nike
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, claiming the sneaker giant made cash payments to high school basketball stars and their families during their recruitment.
In a string of tweets Tuesday, the lawyer accused Nike of "trying to divert attention from their own crimes."
Avenatti alleged that Nike made payments to Phoenix Suns rookie Deandre Ayton's "mother and others." Ayton, the No. 1 pick in the 2018 NBA draft, played one season for the Arizona Wildcats — a Nike-outfitted team — before turning pro.
In another tweet, Avenatti claimed University of Oregon center Bol Bol and "his handlers also received larges sums from Nike."
"A lot of people at Nike will have to account for their criminal conduct, starting with Carlton DeBose & moving higher up. The diversion charade they orchestrated against me will be exposed," he added.
Avenatti provided no evidence to support his claims. But during last year's college basketball corruption trial, defense attorneys for two Adidas executives and a sports agent charged in the pay-for-play case named Oregon and Arizona as some of the Nike-sponsored schools willing to pay for recruits who were also being sought by colleges outfitted by Adidas, according to the Arizona Daily Star.
A former Adidas shoe consultant and fixer testified that he paid a family friend of Ayton's $15,000 to pass along to Ayton's mother when the basketball star was a high school junior. Five months later, Ayton committed to Arizona instead of the Adidas-sponsored University of Kansas, the Star reported. He has previously denied allegations of receiving payments while he was a high school athlete being recruited by universities.
A spokesperson for Ayton did not immediately respond to an email request for comment. Ducks head coach Dana Altman told reporters Tuesday ahead of Oregon's flight to Louisville, where they'll face Virginia Thursday in the NCAA Tournament Sweet 16 matchup, that he wasn't aware of any payments.
"I don’t have any information on that," Altman said of Avenatti's claims. "I have no reason to believe any of its accurate. So, until I get more information, I just don’t have anything to comment on that."
The University of Oregon released a statement saying it was "unaware of any evidence that would support" Avenatti's allegations.
"Diligent inquiry last summer into the amateur status of our student-athletes revealed no indication of improper payments made to any student-athletes or their families," the statement said.
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 said in a statement to NBC News that it "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."
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, who rose to prominence representing porn actress Stormy Daniels in her legal battles against President Donald Trump, was arrested Monday and federal prosecutors on both coasts announced charges that could send him to prison for the rest of his life.
Federal prosecutors in New York said Avenatti tried to shake down Nike for millions by using his prominent position to threaten the company with bad publicity. He was also accused by California prosecutors of stealing a client's settlement money to pay his own expenses and filing fake tax returns to get $4 million in loans from a Mississippi bank to fund a lavish lifestyle.
If convicted of the charges in California and New York, Avenatti could face up to nearly 100 years in prison.
He was at the Boies Schiller Flexner law firm in New York, where he had gone to meet with Nike executives, at the time of his arrest. It was just minutes after he tweeted that he planned to hold a news conference Tuesday to "disclose a major high school/college basketball scandal perpetrated by @Nike that we have uncovered."
Avenatti, 48, appeared briefly in court Monday evening in New York and was ordered released on $300,000 bond. He did not enter a plea. Emerging from the courthouse, he thanked the federal agents who arrested him for being courteous and professional.
"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," he said. "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."
Avenatti's fame from the Daniels case made him a leading figure in the anti-Trump movement, with relentless cable news appearances, a hard-punching style and a knack for obtaining information about others' wrongdoing.
His sharp reversal of fortune led critics to hit back on Twitter. Donald Trump Jr., whom Avenatti inaccurately predicted would be charged in the investigation into ties between his father's 2016 presidential campaign and Russia, gloated.
"Good news for my friend @MichaelAvenatti, if you plead fast enough, you might just get to share a cell with Michael Cohen!" he wrote, referring to the former Trump lawyer set to go to prison next month for crimes that include orchestrating hush-money payments to Daniels. Trump Jr. mocked Avenatti by ending with the lawyer's trademark hashtag #basta, an Italian word meaning "enough."
In a statement shortly after news broke of his arrest, Daniels said she was "saddened but not shocked" by the criminal allegations. Avenatti said earlier this month that he no longer represents her.
"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.
While Avenatti's lawsuit effectively tore up the gag order that threatened financial penalties if Daniels spoke about the case, a defamation lawsuit filed on her behalf against Trump backfired, and a court ordered her to pay the president's $293,000 in legal fees.
Avenatti himself has been dogged with tax and financial troubles in recent years.
A U.S. bankruptcy court ordered his former firm to pay $10 million to a lawyer who claimed it had misstated its profits.
The bank fraud case involved $4 million in loans he got from The Peoples Bank in Biloxi, which prosecutors said he obtained by filing fraudulent tax returns claiming $14 million in income over three years. However, he never filed tax returns those years, nor paid the $2.8 million he reported on the forms. In fact, he still owed more than $850,000 to the IRS at the time for previous income.
Mark Pearson, the assistant agent in charge of IRS criminal investigations in Los Angeles, said Avenatti's crimes supported a $200,000-a-month lifestyle, a car racing venture and pricey homes in the wealthy Orange County communities of Newport Beach and Laguna Beach.
Prosecutors in California had been building a tax case against Avenatti for more than a year while New York investigators said their probe only began last week.
In that case, prosecutors said Avenatti and a co-conspirator initially approached Nike on behalf of a client who coached an Amateur Athletic Union basketball program sponsored by the company in California.
They claimed to have evidence of misconduct by Nike employees and threatened to hold a news conference last week on the eve of a company's quarterly earnings call and the start of the NCAA tournament. Avenatti told Nike the company could either pay them $15 million to $25 million to investigate the allegations, or pay him more than $22 million for his silence, the criminal complaint said.
Two people familiar with the investigation confirmed the unidentified co-conspirator was Mark Geragos , a Los Angeles criminal defense lawyer known for his work with celebrities. The people spoke on condition of anonymity because the information was not made public by prosecutors.
Geragos, a CNN contributor, has a client list that has included Michael Jackson, Winona Ryder, Scott Peterson, Colin Kaepernick and most recently Jussie Smollett, the actor accused of fabricating a racist, anti-gay attack in Chicago. Geragos did not respond to messages seeking comment. Within hours, CNN cut ties with him.
While lawyers sometimes make demands to seek out-of-court settlements, it crosses the line to extortion if they threaten to go public with damaging information to get something of value or gain leverage in a civil dispute, attorney Neama Rahmani said.
"The Department of Justice historically has been very cautious when charging attorneys, so they likely have evidence that Avenatti seriously crossed this line," said Rahmani, a former federal prosecutor.
Nike officials told investigators Avenatti claimed to know of rules violations by an amateur basketball team sponsored by Nike. Executives immediately reported the threats to federal authorities.
The company "firmly believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors," Nike said in a statement.
Avenatti was arrested on a felony domestic violence charge in Los Angeles in November but the district attorney declined to press felony charges.