Michael Avenatti became a familiar face on cable news shows when he represented adult film star Stormy Daniels in her case against Donald Trump. Avenatti loudly voiced his distaste for the president, and even toyed with the idea of taking on Trump in the 2020 election.
Now, in what can only be called a spectacular fall from grace, he has been charged with extortion, bank fraud, wire fraud – and, oh, the IRS claims he owes almost a million dollars in unpaid taxes.
Things began to go south for Avenatti on March 25th, when he was arrested in New York and charged with extortion for attempting a shakedown of Nike, to the tune of $25 million. He was released that night on $300,000 bond.
Meanwhile, back in California, another group of federal prosecutors simultaneously charged him with bank fraud and wire fraud. It was not a good day for Mr. Avenatti.
Extortion Charges In New York
According to the charges, Avenatti placed a phone call to two Nike attorneys – and unbeknownst to him, an FBI agent who just happened to be listening in and recording the call. Avenatti claimed to represent a youth basketball coach who claimed he had knowledge – and evidence – of payments made to top college basketball players by Nike. These supposed payments would not only violate NCAA rules, but could also violate federal law.
In exchange for his client’s silence, Avenatti demanded $1.5 million – and an additional $15-$25 million to be paid to himself for conducting an internal investigation of Nike. Apparently Avenatti believed that revealing the allegations would cause the value of all Nike stock to drop by as much as $10 billion – a belief that industry insiders find unlikely at best.
Avenatti maintains his innocence. His stance is that the FBI is simply attempting to portray his hardball – yet perfectly legal – negotiations as a crime. According to the prosecutor, the investigation is ongoing.
Nike has neither confirmed nor denied Avenatti’s allegations.
Fraud Charges In California
While the above drama unfolded in New York, federal prosecutors in Los Angeles were busy slapping him with charges of bank fraud and wire fraud.
According to the wire fraud charges, Avenatti received $1.6 million as part of a settlement agreement for one of his clients, but never told his client about the settlement – and never gave the money to his client.
As for the bank fraud charges, it is alleged that Avenatti obtained over $4 million in loans from a bank, which he allegedly secured by using phony tax returns from previous years.
Speaking Of Tax Returns…
When it rains, it pours. Adding to the deluge of drama for Mr. Avenatti, federal prosecutors claim that he has not filed personal income tax returns since 2010 – even though tens of millions of dollars have flowed into his bank account over those years. Two of his law firms have also not filed tax returns for a number of years.
And lest we forget, Avenatti was arrested – but never prosecuted – for suspicion of domestic abuse in November of last year. And a few days after that, his law firm was evicted for owing over $200,000 in rent.
All said, Mr. Avenatti’s detractors – particularly those in the White House – must find his swift fall from grace to be exceedingly convenient. Still, the charges haven’t yet been proven, and they must play out in the justice system just like any other case.
At least he won’t have to look far to find a defense lawyer.