Michael Avenatti Arrested In New York, Facing Federal Charges

AUDIE CORNISH, HOST:

Federal prosecutors say they've exposed a scheme to extort $20 million from Nike, the sports apparel giant. The person they say who is behind that scheme - lawyer Michael Avenatti. Best known for representing adult film star Stormy Daniels in a suit against President Trump, Avenatti was arrested today in New York and released on $300,000 bond. He says he's confident he will, quote, "never stop fighting the good fight."

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MICHAEL AVENATTI: When it is all known, when due process occurs, then I will be fully exonerated, and justice will be done.

CORNISH: This case in New York is just one of two federal criminal cases against Avenatti that were announced today. NPR's Joel Rose has been following both cases. He joins us now from New York. And Joel, let's start with the charges there. What are prosecutors saying?

JOEL ROSE, BYLINE: Well, they've described this as a, quote, "old fashioned shakedown." They say that the case actually came together very fast. They allege Avenatti contacted Nike and its lawyers last week and said, I have this source, an amateur basketball coach, and we have proof that Nike was paying off the families of high school basketball players. Court documents don't go into a great deal of detail here, but basically the allegation is that this is something similar to the big scandal in college sports a few years ago when Nike's rival Adidas was charged with paying high school players to commit to college programs because they wore Adidas gear.

CORNISH: So allegedly Avenatti calls Nike. And then what did Nike's lawyers do?

ROSE: Well, prosecutors say they turned around and called the U.S. Attorney's office in New York, which then started recording their conversations with Avenatti. According to prosecutors, Avenatti is heard on the tape threatening Nike lawyers that he'll go public with the allegations, saying he will, quote, "take $10 billion off your clients' market cap," unquote, if they don't accede to his demands which included paying Avenatti more than $20 million. Avenatti tweeted today that he was planning to go public with allegations about Nike at a press conference tomorrow. And shortly after that, he was arrested.

CORNISH: So the extortion case is out of New York. But I know Michael Avenatti's also facing criminal charges in California. What's going on there?

ROSE: Prosecutors in Los Angeles announced wire fraud and bank fraud charges against Avenatti today as well. This is a totally separate case, one that came together slowly, prosecutors say, actually over the course of several years thanks to investigators in the IRS and the U.S. Attorney's office. Here's U.S. Attorney Nick Hanna announcing those charges.

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NICK HANNA: Mr. Avenatti describes himself as attorney advocate fighter for good. But the allegations in this case describe something different - a corrupt lawyer who instead fights for his own selfish interests.

ROSE: So in this case, Avenatti is charged with embezzling more than a million dollars from one of his clients and also with faking documents in order to get bank loans to support prosecutors say - what prosecutors call his lavish lifestyle. And some of the documents he's accused of faking were tax returns. And IRS investigators say they knew that those returns were fraudulent because Avenatti never actually filed tax returns for those years.

CORNISH: We heard a little bit of audio of Michael Avenatti earlier. Can you tell us more about how he's responded to all this?

ROSE: Right. Well, Avenatti spoke to reporters after appearing in court in New York to face the extortion charges. He was released, like you said, on $300,000 bond. Avenatti did not enter a plea at the hearing, but he told reporters outside the courthouse that he's confident he'll be fully exonerated of all the charges in both cases. And he told reporters that he plans to never stop fighting the good fight against powerful people and corporations.

CORNISH: That's NPR's Joel Rose. Thanks for your reporting.

ROSE: Hey. You're welcome.

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