In the California case, Avenatti allegedly misused a client's money to pay his debts and those of his coffee business and law firm. Federal prosecutors said he also defrauded a bank by using phony tax returns to obtain millions of dollars in loans.
Avenatti allegedly threatened to hold a news conference last week on the eve of Nike's quarterly earnings call and the start of the NCAA tournament to announce allegations of misconduct by Nike employees. The attorney and a co-conspirator demanded to be paid $15 million to $25 million and an additional $1.5 million for an Avenatti client to remain silent, the complaint said.
A person familiar with details of the investigation confirmed that the unidentified co-conspirator was Mark Geragos, a Los Angeles criminal defense lawyer known for his work with celebrities. The person spoke on condition of anonymity because the information was not made public by prosecutors.
Geragos, a CNN contributor, has a client list that has included Michael Jackson, Winona Ryder, Scott Peterson and most recently Jussie Smollett, the actor accused of fabricating a racist, anti-gay attack in Chicago. Geragos did not respond to messages seeking comment.
The Avenatti client is a coach of an amateur athletic union men's basketball program in California, according to the papers. The AAU program coached by the client was sponsored by Nike for $72,000 annually, the complaint said.
Shortly before the charges came to light, Avenatti tweeted that he planned to hold another news conference regarding Nike on Tuesday. Less than 45 minutes later, prosecutors announced the extortion case.
Nike officials told investigators that Avenatti claimed to know of rules violations by an amateur basketball team sponsored by Nike. Executives immediately reported the threats to federal authorities.
The company "firmly believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors," Nike said in a statement.
Avenatti was in custody and did not respond to an email requesting comment or phone calls and text messages from The Associated Press.
He rose to national prominence by representing Daniels, whose real name is Stephanie Clifford, in a lawsuit to break a confidentiality agreement to speak about her alleged affair with Trump. He also made headlines in recent weeks for representing two women who accused R&B star R. Kelly of sexual abuse, and he briefly explored the idea of a presidential bid last year.
Daniels said she was "saddened but not shocked" by the arrest. She issued a statement Monday on Twitter saying she fired Avenatti a month ago after "discovering that he had dealt with me extremely dishonestly." She said she would not elaborate.
- Associated Press
