Disgraced lawyer Michael Avenatti, who rose to fame representing porn star Stormy Daniels in lawsuits against President Donald Trump, was found guilty Friday of trying to extort up to $25 million from Nike.
The jury's decision in U.S. District Court in Manhattan came after a three-week trial for the California lawyer, who faces a statutory maximum of 42 years in prison when he is sentenced in June.
“Today a unanimous jury found Michael Avenatti guilty of misusing his client’s information in an effort to extort tens of millions of dollars from the athletic apparel company Nike," U.S. Attorney Geoffrey Berman said in a statement. "While the defendant may have tried to hide behind legal terms and a suit and tie, the jury clearly saw the defendant’s scheme for what it was — an old-fashioned shakedown.”
Avenatti glared at the jurors as the verdict was being announced, but didn't say anything. Afterward, he shook hands with his lawyers and told them, “great job."
One of his lawyers, Scott Srebnick, declined to comment but said he would appeal the conviction. Later, he released a statement to NBC News.
“Michael Avenatti has been a fighter his entire life. The inhumane conditions of solitary confinement he has endured over the past month would break anyone but he remains strong," Srebnick said. " We are all obviously deeply disappointed by the jury’s verdict. We believe there are substantial legal grounds for the appeal that he plans to pursue.”
Avenatti was arrested in March after he and an uncharged conspirator threatened to hold a news conference to ruin Nike’s reputation and crater its stock price unless it agreed to pay him and his client millions of dollars, the court papers said.
The next day, the FBI captured him on a recorded call hurling expletives as he pressured Nike reps to pay up, court papers said.
“I’m not f---ing around with this, and I’m not continuing to play games,” Avenatti told Nike reps, according to court papers. “You guys know enough now 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. A few million dollars doesn’t move the needle for me.”
“This is what extortion sounds like,” Assistant U.S. Attorney Matthew Podolsky said after repeatedly playing Avenatti's recorded demands.
Avenatti still faces other legal hurdles, including federal charges in California for defrauding clients and absconding with payments to them that he was able to obtain, including theft from a quadriplegic man. He also faces a separate federal case in New York tied to allegations that he kept $300,000 in money from a book publisher that was supposed to be paid to Stormy Daniels.
He rose to fame almost two years ago when he brought a lawsuit on behalf of Stormy Daniels, whose legal name is Stephanie Clifford, saying her ‘hush agreement’ with President Trump was invalid because he never personally signed it. Daniels has said that she had an extramarital affair with the Trump prior to his candidacy, an affair the president has strenuously denied.
In the Nike case, prosecutors said Avenatti demanded that the sportswear behemoth pay a client of his $1.5 million and compensate him and his co-conspirator $15 million to $25 million to conduct an "internal investigation" for the company.
The lawyer allegedly had debt of over $11 million at the time of his extortion scheme.
He had met with Nike representatives on March 19 claiming to represent a youth basketball coach who had information that Nike employees made illicit payments to the families of high school athletes, and threatening to hold a news conference to expose the company unless it agreed to pay him and his client millions of dollars, according to court papers.
Avenatti had pleaded not guilty. His lawyers said he was simply pursuing an honest negotiation with the company on behalf of a client, Gary Franklin, an amateur basketball coach who wanted Nike to clean up its act.
During closing arguments, one of his attorneys, Howard Srebnick, urged jurors to disregard the California attorney's four-letter words. “This was exactly what the clients wanted. He acted in good faith," Srebnick said. "Not guilty.”
“In the words of Nike itself, he went in there to ‘Just Do It,’ for his client," he added with flourish.
But prosecutors drilled down on Avenatti's debt, and said he was looking out for his bottom line, not his client. “Michael Avenatti, facing a mountain of debt, saw light at the end of the tunnel,” Podolsky said. “He saw a meal ticket: Gary Franklin.”
Avenatti's former law firm office manager had testified that money was so tight there that some employees had been forced to leave their offices and work from home.
He owed the IRS $850,438 in unpaid taxes, plus interest and penalties, prosecutors said.
Daniels was owed money from a book deal, and Avenatti allegedly used a "fraudulent document purporting to bear his client’s name and signature to convince his client’s literary agent to divert money owed to Avenatti's client to an account controlled by Avenatti," according to a statement by federal prosecutors.
Prosecutors, who say he pocketed nearly $300,000 in the scheme, accused him of spending the money lavishly, like to pay off his Ferrari.
"No monies relating to Ms. Daniels were ever misappropriated or mishandled. She received millions of dollars worth of legal services and we spent huge sums in expenses. She directly paid only $100.00 for all that she received. I look forward to a jury hearing the evidence," Avenatti responded when he was charged in May.
Both the case involving Daniels in New York and the case alleging fraud in Los Angeles federal court are scheduled to go to trial in the spring.