Former Stormy Daniels attorney Michael Avenatti has been released on $300,000 bail just hours after he was charged with attempting to extort $25million from Nike.
Avenatti was hit with the extortion charge in court papers filed earlier on Monday by the US Attorney’s Office for the Southern District of New York.
Those charges are the result of Avenatti’s alleged attempt to receive millions in payments from Nike based on damning information obtained by his client, a college basketball coach.
A second defendant is listed as a cooperating witness and not identified in the filings, though it is stated that he is a male and a lawyer who represents high profile clients.
A source who spoke with DailyMail.com said that the lawyer is Mark Geragos, who has had a long career representing high-profile clients including Michael Jackson, Colin Kaepernick and Jussie Smollett.
Now Geragos might need a defense attorney himself after being named in the case.
Geragos has yet to be charged with any crime but two people familiar with the investigation confirmed Monday that he is the unidentified co-conspirator in court papers charging Avenatti with attempting to shake down Nike for $25million by threatening the company with bad publicity.
Michael Avenatti (pictured Monday night) said he’s ‘highly confident’ that he will be fully exonerated for allegedly trying to extort $25million from Nike to keep quiet about the ‘college basketball scam’
A second defendant is listed as a cooperating witness and not identified in the filings. A source who spoke with DailyMail.com said that the lawyer is Mark Geragos (pictured), who has had a long career representing high-profile clients including Colin Kaepernick and Jussie Smollett
The people spoke on condition of anonymity because the information was not made public by prosecutors.
Geragos, 61, didn’t respond to requests for comment.
For decades the media savvy attorney has defended headline-grabbing cases involving troubled Hollywood stars like Winona Ryder and Chris Brown and wife killer Scott Peterson.
A longtime CNN contributor, Geragos appeared on the network this month to discuss the case against his client Smollett, the Empire actor accused of fabricating a racist, anti-gay attack in Chicago.
Within hours of the extortion case breaking, CNN cut ties with him.
CNN did announced on Monday that he was no longer a commentator for the network.
Shortly after his release Monday night, Avenatti told reporters that he’s ‘highly confident’ that he will be fully exonerated for allegedly trying to extort $25million from Nike.
‘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,’ Avenatti said.
‘I am highly confident that when all of 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 added.
Geragos (pictured in 2014, representing Chris Brown) has yet to be charged with any crime but two people familiar with the investigation confirmed Monday that he is the unidentified co-conspirator in court papers charging Avenatti with attempting to shake down Nike for $25M
‘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,’ Avenatti told reporters in New York during a press conference Monday night
Avenatti was released on $300,000 bail Monday night after being hit with the charges earlier in the day
Avenatti was charged with extortion earlier on Monday by the US Attorney’s Office for the Southern District of New York. He’s seen in court sketch on Monday
The charges against Avenatti were announced shortly after he tweeted: ‘Tmrw at 11 am ET, we will be holding a press conference to disclose a major high school/college basketball scandal perpetrated by @Nike that we have uncovered. This criminal conduct reaches the highest levels of Nike and involves some of the biggest names in college basketball.’
A source who has been briefed on the situation told DailyMail.com that federal agents were expecting that tweet, and took Avenatti into custody within minutes of him posting on the social media platform.
That tweet was shared just a few days after Avenatti spoke with Nike’s attorney, and declared what would happen if his demands were not met, according to the complaint.
‘I’ll go take ten billion dollars off your client’s market cap,’ Avenatti allegedly said during the call.
He later noted: ‘I’m not f***ing around.’
That is not the only case filed against Avenatti either, with a second case accusing the lawyer of bank and wire fraud was also filed on Monday in the Central District of California.
He is facing 50 years in prison for allegedly lying about a settlement amount top s client and defrauding a bank.
Speaking out: A complaint was filed on Monday by the US Attorney’s Office for the Southern District of New York shortly after Avenatti tweeted about the company (above)
That tweet was shared just a few days after Avenatti spoke with Nike’s (file image) attorney, and declared what would happen if his demands were not met, according to the complaint
DELIGHTED DON JR
These bi-coastal complaints come in the wake of the Mueller probe concluding that neither President Donald Trump or his son Donald Trump Jr had colluded with Russia during the election.
Avenatti, who represented President Trump’s former paramour Daniels in her lawsuit against the real estate scion, had previously tweeted that he knew Don Jr would be indicted as a result of a federal investigation.
#MAGA – Michael Avenatti Getting Arrested!!!; Good news for my friend @MichaelAvenatti, if you plead fast enough, you might just get to share a cell with Michael Cohen!; Karmas a b***h huh. #basta
– Don Trump Jr tweeted at Avenatti
‘Donald Trump Jr. will be indicted before his birthday on 12-31-18. If you doubt my prediction, please check my record over the last 7 months. #Winning,’ wrote Avenatti last year.
Don Jr wasted no time in responding to the news of Avenatti’s legal woes on Monday by retweeting the lawyer’s post from last year and stating: ‘How’d that work out for you buddy? #basta.’
He also tossed out a few other tweets, including: ‘#MAGA – Michael Avenatti Getting Arrested!!!’; ‘Good news for my friend @MichaelAvenatti, if you plead fast enough, you might just get to share a cell with Michael Cohen!’; ‘Karmas a b***h huh. #basta.’
His former client also showed little love for the lawyer on Monday.
‘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,’ said Daniels.
‘I ask that the media respect my decision to withhold further public comment regarding Mr. Avenatti at this time.’
LAWYER FOR JUSSIE SMOLLETT AND COLIN KAEPERNICK’S INVOLVEMENT
The events that led to Avenatti’s arrest all played out over the past week.
Avenatti allegedly told the attorneys for Nike that he would release damaging information about the company unless they agreed to make multimillion-dollar payments to himself and a second defendant.
A source claims his co-conspirator is Geragos. Last year, Geragos helped negotiate a multiyear, multimillion-dollar deal between Nike and Kaepernick, the former NFL player known for inspiring other players to protest police brutality, racial inequality and other social issues.
In announcing the agreement on Twitter, Geragos called Kaepernick an ‘All American Icon’.
Geragos’ website bio describes him as ‘the only lawyer besides Johnnie Cochran ever named “Lawyer of the Year” in both Criminal and Civil arenas’.
He was admitted to the bar in 1983 and made his name in the 1990s when he got an acquittal in an embezzlement case against Susan McDougal, who was previously convicted in the Whitewater scandal involving President Bill Clinton.
A few years later he represented Clinton’s brother, Roger Clinton, in a drunken-driving case.
He got probation for Winona Ryder after the actress was convicted by a jury in a felony grand theft case, and for Chris Brown, the singer who pleaded guilty to assaulting his then-girlfriend Rihanna.
I’m not f***ing around with this, and I’m not continuing to play games,’ declared Avenatti according to court documents … you guys know enough to know you’ve got a serious problem, and it’s worth more in exposure to me to just blow the lid on this thing. I’m just being really frank with you.
– Avenatti to Nike lawyers
Perhaps most prominently, Geragos represented Michael Jackson after the pop superstar was accused of child molestation.
Jackson ultimately replaced Geragos, saying he wanted a lawyer who would devote his full time to the case.
Geragos was simultaneously representing Scott Peterson, a California fertilizer salesman who was eventually found guilty of murdering his pregnant wife.
He later represented Jackson in a separate case and settled a lawsuit for $2.5million against the owner of a charter jet company that secretly recorded the singer while he flew on a private plane.
A Los Angeles native with Armenian roots, he’s been a champion of efforts to have the 1915 Armenian Genocide recognized at the national level.
It’s unclear what his connection is with Avenatti, the bellicose attorney best known for representing porn actress Stormy Daniels in lawsuits against President Donald Trump.
But it was Geragos who first reached out to Nike and the company’s lawyers back on March 13.
Two days later he spoke with an attorney for the company and stated that he and Avenatti had information they wished to share with Nike’s legal team in person.
The two men then approached Nike on behalf of their client, who is identified as an AAU basketball coach at a California college that previously had a $72,000 deal with Nike.
During that March 19 meeting, court papers claim that Avenatti said that he had proof Nike had made illegal payments to at least three high school basketball player’s families.
Those allegations are similar to the ones that have been made against Nike’s rival Adidas.
Freaky Monday: The arrest of Avenatti comes after the lawyer stated as fact that Donald Trump Jr would be indicted and tried to take down his father (President Trump above on Monday)
Karma: Avenatti, who represented President Trump’s former paramour Daniels in her lawsuit against the real estate scion, had previously tweeted that he knew Don Jr would be indicted as a result of a federal investigation
Fall from grace: Geoffrey Berman (above), the US Attorney for the Southern District of New York speaks during a news conference announcing charges
LET’S MAKE A F***ING DEAL
In exchange for his silence, Avenatti allegedly demanded that his client get a $1.5million payment and that he and the other lawyer be brought on to investigate these claims – and be paid between $15 to $25million.
There would also be a provision in that contract stating Avenatti would be paid double the price of any other law firm brought on to work at the company.
Nike’s lawyers were not given much time to think this over either, with Avenatti demanding an answer later that day, it is claimed.
He allegedly informed lawyers at the end of the meeting that if his demands were not met, he would go public with his allegations the next day.
I’m not f***ing around with this thing anymore. So if you guys think that you know, we’re gonna negotiate a million five, and you’re gonna hire us to do an internal investigation, but it’s going to be capped at 3 or 5 or 7 million dollars, like let’s just be done… and I’ll go and I’ll go take 10 billion dollars off your client’s market cap.
-Avenatti to Nike counsel
That was March 20, which marked the first day of the NCAA Tournament, as well as the day prior to Nike’s release of their quarterly report.
In a call to Avenatti on March 19, Nike’s lawyer managed to buy two more days to mull over the offer, at which point the US Attorney’s Office was contacted by members of the company.
That was how agents were able to hear the March 20 call between Avenatti and Nike’s lawyers.
In that recorded call, Avenatti stated he wanted ‘a million five for our guy’ and to be ‘hired to handle the internal investigation’.
He then informed the lawyers for Nike that if they were not willing to do these things ‘we’re done here’.
Avenatti later launched into an expletive-filled rant, according to the complaint.
‘I’m not f***ing around with this, and I’m not continuing to play games,’ declared Avenatti, according to court documents.
‘[Y]ou guys know enough to know you’ve got a serious problem, and it’s worth more in exposure to me to just blow the lid on this thing. I’m just being really frank with you.’
He later continued: ‘I’m not f***ing around with this thing anymore. So if you guys think that you know, we’re gonna negotiate a million five, and you’re gonna hire us to do an internal investigation, but it’s going to be capped at 3 or 5 or 7 million dollars, like let’s just be done… and I’ll go and I’ll go take 10 billion dollars off your client’s market cap.’
Avenatti also informed the lawyers that an internal investigation for a company like Nike could cost upwards of $100million, presenting himself as a relative bargain by requesting a tenth of that and saying he would agree to any deal that paid more than $9million.
Ghosted: Stormy Daniels revealed that she had quietly dropped Avenatti as her lawyer (pair above in April 2018)
Passing storm: ‘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,’ said Daniels (above)
The following day, when Avenatti met with the lawyers, that amount had gone up a considerable amount.
In that meeting, Avenatti allegedly said that he and his co-counsel would need to receive a $12million retainer and ultimately be paid between $15 and $25million for the investigation.
The attorney for Nike informed Avenatti that Nike had never conducted an investigation that cost more than $10million, and had never once paid out a $12million retainer.
The documents claim Avenatti then asked the lawyer if he had ever ‘held the balls of your client in your hand where you could take five to six billion dollars market cap off them?’
When asked if Nike could perhaps just pay Avenatti’s client and not have to hand over millions to him and his co-counsel, the idea was quickly dismissed.
Avenatti allegedly said that it did not make sense to pay his client an ‘exorbitant sum of money’ in the case, ‘in light of his role in this’.
He then conferred with co-counsel, and upon returning stated: ‘If [Nike] wants to have one confidential settlement and we’re done, they can but us for twenty-two-and-a-half-million dollars and we’re done.’
That was followed by another threat according to the complaint, this time detailing how things would play out after he went public with the allegations against Nike.
R KELLY AND TRUMP ACCUSERS ARE LIARS
‘I just wanna share with you what’s gonna happen, if we don’t reach a resolution. As soon as this becomes public, I am going to receive calls from all over the country from parents and coaches and friends and all kinds of people – this is always what happens and they are all going to say I’ve got an email or a text message or – now, 90% of that is going to be bulls*** because it’s always bulls*** 90% of the time, always, whether it’s R. Kelly or Trump, the list goes on and on – but 10% of it is actually going to be true, and then what’s going to happen is that this is going to snowball,’ said Avenatti, who spoke of the scandal being covered in the Washington Post, the New York Times and on ESPN.
He allegedly said that the company would ‘die,’ but then modified that a bit and stated: ‘not die but they are going to incur cut after cut after cut after cut, and that’s what’s going to happen as soon as this thing becomes public.’
Avenatti asked that the deal be on appear by Monday, and was set to go to Nike’s office where he would sign the deal.
Instead, he was arrested and taken into custody after a warrant for his arrest was signed on Sunday.
FEDERAL AUTHORITIES WEIGH IN
‘As alleged, Avenatti used illegal and extortionate threats for the purpose of obtaining millions of dollars in payments from a public company. Calling this anticipated payout a retainer or a settlement doesn’t change what it was – a shakedown,’ said Manhattan US Attorney Geoffrey S. Berman.
‘When lawyers use their law licenses as weapons, as a guise to extort payments for themselves, they are no longer acting as attorneys. They are acting as criminals, and they will held responsible for their conduct.’
The federal agent who oversaw the investigation also commented on Monday.
‘As alleged, Michael Avenatti approached Nike last week with a list of financial demands in exchange for covering up allegations of misconduct on behalf of the company. The lofty price tag included a $1.5million payoff for Avenatti’s client and upwards of tens of millions of dollars for the legal services of his firm – services Nike never requested,’ said FBI Assistant Director in Charge William F. Sweeney Jr.
‘This is nothing more than a straightforward case of extortion. In the event anyone needs to be reminded, this type of behavior is illegal and it will not be tolerated – especially when committed by a lawyer who is supposed to use his license to practice law, not to willfully violate it.’
Nike said in a statement that the company ‘firmly believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors’.
SKIMMING FROM THE TOP
In the complaint filed in Central California, Avenatti is accused of lying to a client about the amount the man received in a settlement.
It is a story that was first reported earlier this year by The Daily Beast.
Avenatti allegedly embezzled a sizable portion of a client’s settlement to help fund his struggling coffee business, telling the man he was set to receive an initial payment of $1.6million when it was in fact $1.9million per court documents.
At the same time, he also lied about his assets and holdings to secure a $4.1million loan for a Mississippi bank.
He did this by submitting false tax forms according to prosecutors.
‘In these purported tax returns, Avenatti claimed that he earned $4,562,881 in adjusted gross income in 2011, $5,423,099 in adjusted gross income in 2012, and $4,082,803 in adjusted gross income in 2013,’ states the 196-page complaint, which is signed by IRS Agent Remoun Karlous.
‘He also claimed that he had paid to the IRS $1,600,000 in estimated tax payments in 2012, and $1,250,000 in estimated tax payments in 2013. However, Avenatti never filed personal income tax returns for the 2011, 2012, and 2013 tax years, and did not make any.’
This could land Avenatti in jail for 50 years, and will certainly derail his plans to run for president.
‘A lawyer has a basic duty not to steal from his client,’ said United States Attorney Nick Hanna.
‘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.’
It has been determined that Avenatti will face the charges in New York first, followed by California.
‘Professionals, including attorneys, who create elaborate schemes that have no purpose other than to mislead others and defraud both their clients and federally insured financial institutions, run the very high risk of prosecution,’ said Special Agent in Charge Ryan Korner of IRS-Criminal Investigation.
‘The criminal complaint unsealed today shows a pattern of selfish behavior that paints Mr. Avenatti as a lawyer who only represents his own self interests.’