Embattled attorney Michael Avenatti will have a busy day in Manhattan federal court Tuesday afternoon -- but as a defendant, not as counsel.
Avenatti, 49, is scheduled to be arraigned on charges that he stole nearly $300,000 from adult film actress Stormy Daniels, the client who rocketed him to national prominence. Approximately three-and-a-half hours later, Avenatti is scheduled to be arraigned on charges that he tried to extort up to $25 million from athletic apparel giant Nike by threatening to expose claims that the shoemaker paid off high school basketball players to steer them to Nike-sponsored colleges.
In the Nike case, Avenatti is charged with one count of extortion, one count of sending interstate communications with intent to extort and two counts of conspiracy. In the Stormy Daniels case, he is charged with one count of wire fraud and one count of aggravated identity theft. If convicted on all counts, Avenatti could face a total of 69 years in prison.
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Avenatti repeatedly has denied any wrongdoing and is expected to plead not guilty to all charges. He initially was arrested on March 25 at a New York law firm where he had scheduled a meeting with Nike executives.
Six days earlier, prosecutors said, Avenatti and a co-conspirator identified by several news outlets as celebrity attorney Mark Geragos met with attorneys for Nike on March 19 and "threatened to release damaging information" if the company did not agree to make multi-million dollar payments to them, as well as an additional $1.5 million payment to a California youth basketball coach Avenatti claimed to represent.
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According to the government, Avenatti threatened to hold a news conference on the eve of Nike's quarterly earnings call and the start of the NCAA tournament to announce allegations of misconduct by Nike employees, at one point telling Nike's lawyers he would "take ten billion dollars off your client's market cap... I'm not f---ing around."
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Avenatti was indicted formally in the Nike matter this past Wednesday. That same day, prosecutors indicted him in the Daniels case, in which they claimed Avenatti stole two payments totaling $297,500 from an advance Daniels was supposed to receive from a book deal in the summer of 2018.
Court documents said Avenatti gave Daniels' literary agent a doctored letter with her signature directing the agent to divert the money to an account controlled by Avenatti. The lawyer then allegedly spent the money "on airfare, hotels, car services, restaurants and meal delivery, online retailers, payroll for his law firm and another business he owned, and insurance."
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The indictment said that after Daniels asked Avenatti why she had not received the first payment, Avenatti falsely claimed he was still trying to extract the money from the publisher. Weeks later, the lawyer allegedly "used funds recently received from another source" to pay Daniels the amount she was owed -- $148,750.
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Soon after, prosecutors said Avennatti received another payment of $148,750 from Daniels' agent and used the money on personal expenses, including a lease payment on a Ferrari. When Daniels asked for the remaining money, Avenatti allegedly misled her to believe that the book's publisher was refusing to pay the amount to Daniels' literary agent.
Avenatti's legal issues have been daunting, but his troubles are not limited to New York.
In March, federal prosecutors in Southern California accused Avenatti of committing bank fraud and wire fraud by embezzling settlement money from five clients, including a paraplegic man, to pay personal expenses and debts — as well as those of his coffee business and law firm.
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According to U.S. Attorney Nick Hanna, Avenatti also obtained $4.1 million in loans from a Mississippi bank by using fraudulent tax returns stating he made more than $14 million between 2011 and 2013 and had paid more than $1 million in estimated taxes to the IRS in 2012 and 2013. In fact, investigators said, Avenatti owed the IRS $850,438 plus interest and penalties for the years 2009 and 2010, paid no personal income taxes for 2011, 2012 and 2013 and paid no estimated taxes in 2012 and 2013.
If convicted of all 36 counts in the California case, Avenatti faces up to 335 years in prison.
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