UPDATE 4-Trump critic Michael Avenatti arrested in $20 mln Nike 'shake down' -prosecutors
Avenatti, who lives in Los Angeles, could not be reached for comment. Prosecutors said Avenatti and an unnamed co-conspirator met with Nike's attorneys on March 19 and said they had a client, a former amateur athletic coach, who had evidence that Nike employees had bribed top high school players to play for Nike-sponsored teams.
A former executive at Nike rival Adidas was recently convicted in federal court in Manhattan of participating in a similar scheme, part of a sweeping probe by prosecutors of corruption surrounding the National Collegiate Athletic Association. The case, which is ongoing, has ensnared several prominent basketball coaches. Avenatti told Nike he would go public unless it paid his client $1.5 million and hired him to conduct an internal investigation for between $15 million and $25 million, according to the complaint. Avenatti also offered to accept a $22.5 million payment for his silence, prosecutors said.
In one call, Avenatti threatened, "I'll go take ten billion dollars off your client's market cap... I'm not fucking around," according to the complaint. 'OLD-FASHIONED SHAKE-DOWN'
The charges were revealed shortly after Avenatti said on Twitter that he would hold a news conference on Tuesday to reveal "a major high school/college basketball scandal" that reached "the highest levels of Nike." "A suit and tie does not mask the fact that, at its core, this was a old-fashioned shake-down," Geoffrey Berman, the U.S. Attorney in Manhattan, said at a news conference.
Nike said in a statement that it "will not be extorted" and alerted investigators to Avenatti's demands immediately. Federal prosecutors in California unveiled separate charges against Avenatti on Monday, accusing him of misusing a client's $1.6 million settlement to pay for his own expenses as well as those for his coffee business.
He was also charged with defrauding a Mississippi bank of $4.1 million in loans by submitting false tax returns for 2011-2013 that inflated his income. 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, the porn star whom Trump is accused of paying off shortly before the 2016 election to keep quiet about an alleged affair. Trump has denied having an affair with Daniels, whose real name is Stephanie Clifford. Daniels, who is no longer represented by Avenatti, 48, said she was "saddened but not shocked" by his arrest.
"I made the decision more than a month ago to terminate Michael's services after discovering that he had dealt with me extremely dishonestly," Daniels said on Twitter. Avenatti became one of Trump's most visible foils as a result of the Daniels scandal, frequently appearing on cable television and publicly flirting with a presidential campaign.
His arrest came a day after the U.S. attorney general released a summary of Special Counsel Robert Mueller's findings clearing the president's 2016 campaign of conspiring with Russia. Prosecutors dismissed any suggestion that Monday's charges were politically motivated.
"This office doesn't take politics into account when it decides to pursue a case," Berman said. Trump's eldest son, Donald Trump Jr., reacted with glee to the news on Twitter, coining a new version of his father's campaign slogan, Make America Great Again: "#MAGA - Michael Avenatti Getting Arrested!!!" (Reporting by Joseph Ax and Brendan Pierson in New York; additional reporting by Daniel Trotta and Jonathan Stempel in New York, Brendan O'Brien in Milwaukee and Nivedita Balu in Bengaluru; editing by Scott Malone, Susan Thomas Leslie Adler and Dan Grebler)
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