Michael Avenatti has been arrested and charged with trying to extort $20 million out of Nike.
The feds claim Avenatti told Nike’s lawyers if they didn’t pay him between $15 million and $25 million he would hold a news conference on the eve of Nike’s quarterly earnings call and the start of March Madness and announce allegations of misconduct by employees at the shoe company.
According to the complaint, Avenatti demanded Nike hire him to conduct an internal investigation for the enormous salary.
The U.S. Attorney for the Southern District of New York says Avenatti was representing a client who was the coach of an AAU Youth Club basketball team.
Prosecutors say Avenatti gave Nike an option … don’t hire him but pay $22.5 million to resolve the dispute and buy his silence.
The complaint says Avenatti claimed the AAU coach had evidence that one or more Nike employees had funded payments to the families of top high school basketball players and attempted to conceal those payments.
According to prosecutors, there was a call on March 20th between Avenatti and Nike during which Avenatti said, “I’m not f**king around with this, and I’m not continuing to play games … you guys know enough now to know you’ve got a serious problem … 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 gonna be capped at 3 or 5 or 7 million dollars, like let’s just be done.”
Prosecutors say then Avenatti makes a threat …”I’ll go and I’ll go take 10 billion dollars off your client’s market cap. But I’m not f**king around.”
The U.S. Attorney says the call was recorded and there’s video of a meeting between Avenatti and Nike attorneys on March 21st. In that meeting, Avenatti allegedly said, “If Nike wants to have one confidential settlement and we’re done, they can buy that for $22.5 million and we’re done.”
That’s not the end of it … Avenatti was just arrested for more federal crimes … bank and wire fraud. The U.S. Attorney in the Central District of California claims Avenatti embezzled client money to cover expenses for his coffee corporation which operates Tully”s Coffee stores in CA and Washington.
We reached out to Avenatti, but we could not get through.