Stormy Daniels' lawyer charged with trying to extort $20m from Nike

Michael Avenatti was also hit with fraud and embezzlement charges in the US District Court in Los Angeles

Lawyer Michael Avenatti walks out of federal court in New York, New York, U.S., March 25, 2019.   REUTERS/Carlo Allegri

Michael Avenatti, the lawyer who represented adult film star Stormy Daniels in her legal battles with US President Donald Trump, was charged on Monday with what prosecutors said was an attempt to "shake down" Nike for more than $20 million (Dh73.4m).

Mr Avenatti, who was also hit with other embezzlement and fraud charges in US District Court in Los Angeles, was arrested in New York.

A federal magistrate judge ordered him to be released on $300,000 bond during a hearing in US District Court in New York. The subdued lawyer appeared in the courtroom wearing a dark grey suit and sat with federal public defenders.

"When due process occurs I will be fully exonerated and justice will prevail," Mr Avenatti said outside the court.

Prosecutors said he and another lawyer, who was not identified in court papers, met Nike's attorneys on March 19 and told them that they had a client, a former amateur coach, who had evidence that Nike employees bribed top high school players to play for Nike-sponsored university teams.

The other lawyer was identified by The New York Times and The Wall Street Journal as high-profile Los Angeles attorney and CNN contributor Mark Geragos.

Mr Geragos did not respond to a request for comment. A spokeswoman for CNN said he was no longer with the network.

Prosecutors said Mr Avenatti told Nike he would go public unless it paid his client $1.5m and hired him and the other lawyer to conduct an internal investigation for between $15m and $25m.

They said Mr Avenatti also offered to accept a $22.5m payment for his silence, prosecutors said.

A former executive at Nike rival Adidas was recently convicted in federal court in Manhattan of taking part in a similar scheme.

The charges are part of an investigation by prosecutors into corruption surrounding the National Collegiate Athletic Association. The case has involved several prominent basketball coaches.

The complaint said that in one call, Mr Avenatti threatened: "I'll go take $10 billion off your client's market cap."

Mr Geragos, who has represented celebrities including Michael Jackson and Winona Ryder, is defending the actor Jussie Smollett, who is charged with falsely reporting he was the victim of a racially motivated attack in Chicago.

It was not clear why Mr Geragos has not been charged in the Nike case.

The charges came shortly after Mr Avenatti said on Twitter that he would hold a news conference on Tuesday to reveal "a major high school/college basketball scandal" reaching "the highest levels of Nike".

"A suit and tie does not mask the fact that, at its core, this was an old-fashioned shakedown," said Geoffrey Berman, the US attorney in Manhattan.

Nike said it would "not be extorted" and alerted investigators to Mr Avenatti's claimed demands immediately.

Federal prosecutors in California unveiled separate charges against Mr Avenatti on Monday, accusing him of misusing a client's $1.6m settlement to pay for his expenses and those of his coffee business.

He was also charged with defrauding a Mississippi bank of $4.1m in loans by submitting false tax returns for 2011-2013 that inflated his income.

Mr Avenatti faces up to 30 years in prison on the most serious charge in California, and up to 20 years for the top charge in New York.

He gained international notoriety for representing Daniels, who Mr Trump is accused of paying off during the 2016 presidential campaign to keep quiet about an alleged affair.

Mr Trump has denied having an affair with Daniels, whose real name is Stephanie Clifford.

Clifford, 48, who is no longer represented by Mr Avenatti, said she was "saddened but not shocked" by his arrest, adding she fired him after learning he had acted "dishonestly" with her.