Say, remember that brief moment in the not-so-distant past,
when the left was actually toying with the idea of holding attorney Michael Avenatti
up as a possible contender for the Democrat presidential nomination?
Just to refresh our memories, Avenatti is the bombastic legal
eagle who stepped up to represent former Trump mistress, Stormy Daniels, in her
case against the president.
He got her a lot of publicity and made a lot of media waves, but when it came to the actual case, he failed her, miserably. For those paying attention, it would appear that this was a clear case of an opportunist glomming on to the story of the day, in order to up his own profile.
Daniels split with him weeks ago, after an apparent falling out.
I’ll admit, I found Avenatti entertaining, but not all
entertainers are good people, once you get past the surface.
And now Mr. Avenatti’s character has landed him in trouble.
On Monday, Avenatti was arrested in New York City on a host
of serious charges, with possibly the most shocking being that he attempted to
extort $25 million from Nike.
His play was to claim he had evidence that Nike employees
were authorizing payments to the families of top high school basketball
He apparently got the idea from a similar, legitimate
scandal, involving Adidas and their attempts to defraud several colleges, the
University of Louisville and the University of Kansas, by paying off basketball
recruits to those colleges. The aim was to eventually get those recruits inked
to Adidas endorsement deals.
Avenatti signaled his intent to ride this train with a tweet last week.
Imagine that. It wasn’t even an original scam.
Avenatti also was separately charged in a second federal case in Los Angeles with embezzling a client’s money “in order to pay his own expenses and debts” and those of his law firm and coffee company, and of “defrauding a bank in Mississippi,” prosecutors said.
He faces almost 100 years in prison if convicted in both cases as well as possible disbarment as a lawyer.
He’s looking at 100 years in prison. If he gets even half of
that, my guess is he’s never working as a lawyer, again.
On Monday, the Manhattan federal court brought the hammer down.
He was ordered to give up his U.S. and Italian passports, and his travel is
limited to New York City, Long Island, several counties north of Manhattan, and
the Central District of California.
He’s not allowed to transfer more than $5,000 from any of
his bank accounts, without approval, and he is to have no contact with his
co-conspirator in the scam, attorney Mark Geragos.
He was released on a $300,000 personal recognizance bond.
OH – if the name “Mark Geragos” seems familiar, he was a CNN
contributor (the network says no longer) and the attorney representing actor
Jussie Smollett in his false racial attack case.
So, how did the arrest of Avenatti go down?
He was in the Midtown Manhattan law offices of Boies
Schiller Flexner, who represent Nike. The trap was sprung, and the FBI came in
and swept him up at around 12:30pm.
As the case goes, on Tuesday of last week, Avenatti began
his shakedown, reaching out and threatening to hold one of those press
conferences of his, in order to present the claim that Nike was slipping
illegal payoffs to amateur athletes.
He ramped up those threats in the days that followed.
Avenatti allegedly timed his threats to coincide with Nike’s quarterly earnings call and the kickoff the National Collegiate Athletic Association’s national championship basketball tournament.
According to a criminal complaint, Avenatti offered to refrain from that press conference “only if Nike made a payment of $1.5 million to a client of Avenatti’s in possession of information damaging to Nike … and agreed to ‘retain’ Avenatti and [the co-conspirator] to conduct an ‘internal investigation’ — an investigation that Nike did not request — for which Avenatti and [the co-conspirator] demanded to be paid, at a minimum, between $15 [million] and $25 million.”
The client of Avenatti’s is “a coach of an amateur athletic union … men’s basketball program based in California,” who for a number of years had a sponsorship agreement with Nike, the complaint said.
The complaint says that on Wednesday, Avenatti and a cooperating witness spoke by phone with lawyers for Nike “during which Avenatti stated, with respect to his demands for payment of millions of dollars, that if those demands were not met ‘I’ll go take ten billion dollars off your client’s market cap … I’m not f—ing around.’”
That’s just the New York case!
In Los Angeles, California, he faces bank and wire fraud
charges, which will be presented at a later time.
In the Los Angeles federal case, Avenatti is accused in a 197-page complaint of negotiating a $1.6 million settlement for a client in a civil case, but then giving the client “a bogus settlement agreement with a false payment date of March 10, 2018.”
The U.S. Attorney’s Office in Los Angeles said “Avenatti misappropriated his client’s settlement money and used it to pay expenses for his coffee business, Global Baristas US LLC, which operated Tully’s Coffee stores in California and Washington state, as well as for his own expenses.”
“When the fake March 2018 deadline passed and the client asked where the money was, Avenatti continued to conceal that the payment had already been received,” according to prosecutors.
“Mr. Avenatti is facing serious criminal charges alleging he misappropriated client trust funds for his personal use and he defrauded a bank by submitting phony tax returns in order to obtain millions of dollars in loans,” U.S. Attorney Nick Hanna said.
He also defrauded a Mississippi bank in 2014 by turning in
fake tax returns, in order to secure $4.1 million in loans for his law firm and
Dirty, man. So dirty.
And we’re not talking about a simple fudge of the numbers.
We’re talking about major amounts.
The tax returns indicated that he had “substantial income even though he had never filed any such returns with the Internal Revenue Service,” the prosecutor’s office said. “The phony returns stated that he earned $4,562,881 in adjusted gross income in 2011, $5,423,099 in 2012, and $4,082,803 in 2013. … Avenatti allegedly also claimed he paid $1.6 million in estimated tax payments to the IRS in 2012 and paid $1.25 million in 2013.”
“In reality, Avenatti never filed personal income tax returns for 2011, 2012 and 2013 and did not make any estimated tax payments in 2012 and 2013,” Hanna’s office said.
“Instead of the millions of dollars he claimed to have paid in taxes, Avenatti still owed the IRS $850,438 in unpaid personal income tax plus interest and penalties for the tax years 2009 and 2010. Avenatti also submitted a fictitious partnership tax return for his law firm,” the investigators said.
This is not small stuff. This is the kind of thing that separates
people from their freedom and puts a government number across their chest.
It was a long con gone horribly wrong.
And you know what else?
There are apparently phone recordings of Avenatti’s
thuggery, so he won’t be able to finesse his intent in court.
Avenatti tweeted out his big plan approximately 15 minutes before his meeting with Nike’s lawyers on Monday, causing a drop in Nike stock (which they later recovered), not knowing that he was about to be swept up by authorities.
Serves him right.
In a statement, Nike said, “Nike will not be extorted or hide information that is relevant to a government investigation.”
“Nike has been cooperating with the government’s investigation into NCAA basketball for over a year,” the company said. “When Nike became aware of this matter, Nike immediately reported it to federal prosecutors. When Mr. Avenatti attempted to extort Nike over this matter, Nike with the assistance of outside counsel at Boies Schiller Flexner, aided the investigation.”
“Nike firmly believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors,” the company said.
Ethical and fair play.
It’s good to hear, now watch the law do their thing.