On Monday morning, attorney Michael Avenatti surfaced on Twitter promising to uncover a blockbuster scandal involving Nike and some of the biggest names in college basketball. Less than an hour later, federal prosecutors in New York announced that Avenatti was under arrest for allegedly trying to extort millions from the sports-gear giant — part of a web of criminal charges that, if proven, could send the 48-year-old lawyer to prison for decades. Even as events in Manhattan were unfolding, Avenatti was accused in Santa Ana of embezzling from a client’s $1.6-million legal settlement to cover personal expenses and buttress his troubled coffee business, a sideline that operated Tully’s outlets in California and Washington state. Avenatti also stands accused of bank fraud in the California case. Prosecutors say he gave a Mississippi bank fictitious personal tax returns to secure more than $4 million in business loans. The high-profile attorney has been in financial peril for some time. A former law partner won a $4.85-million personal judgment against him last year after Avenatti’s firm failed to pay a debt. Advertisement Together, the legal travails and Avenatti’s sudden arrest marked a precipitous fall for the flamboyant legal counsel, who gained celebrity representing adult film actress Stormy Daniels in a hush-money case stemming from her alleged 2006 sexual encounter with Donald Trump. Tmrw at 11 am ET, we will be holding a press conference to disclose a major high school/college basketball scandal perpetrated by @Nike that we have uncovered. This criminal conduct reaches the highest levels of Nike and involves some of the biggest names in college basketball. — Michael Avenatti (@MichaelAvenatti) March 25, 2019 Avenatti used the media exposure to secure clients in high-profile cases tied to Brett M. Kavanaugh’s Supreme Court confirmation hearings, President Trump’s separation of immigrant families on the U.S.-Mexico border and the sexual abuse charges against singer R. Kelly — even as he fought a raft of litigation accusing him of financial misdeeds. It was just a few months ago that Avenatti was campaigning across the country — having transformed himself into a combative fixture on cable TV — nurturing a dream, however far-fetched, of winning the 2020 Democratic nomination and replacing Trump in the White House. If convicted of all charges, Avenatti could face up to 97 years in prison. He was released Monday on $300,000 bond. Speaking to reporters as he left the Manhattan courthouse, Avenatti denied wrongdoing. “I am highly confident that when all of the evidence is laid bare in connection with these cases... that I will be fully exonerated and justice will be done,” he said. During a Los Angeles news conference, U.S. Atty. Nick Hanna contrasted Avenatti’s actions with his self-depiction on Twitter: “Attorney, Advocate, Fighter for Good.” “The allegations in this case describe something different,” Hanna said. “A corrupt lawyer who instead fights for his own selfish interests by misappropriating close to $1 million that rightfully belonged to one of his clients.” Advertisement Here are key takeaways from the criminal complaints against Michael Avenatti » Geoffrey S. Berman, the U.S. attorney in Manhattan, offered his own scathing assessment. “A suit and tie does not mask the fact that, at its core, this was an old-fashioned shakedown,” Berman told reporters. Court documents in New York referred to an “un-indicted co-conspirator” in the Nike case, and a source familiar with the investigation identified him as Mark Geragos, a Los Angeles attorney who has represented a stable of celebrity clients. Geragos’ lawyer Benjamin Brafman said he hoped prosecutors “will conclude that Mr. Geragos did not violate the law in any manner.” Daniels, who is no longer represented by Avenatti, said she was “saddened but not shocked” by his arrest. “I made the decision more than a month ago to terminate Michael’s services after discovering he had dealt with me extremely dishonestly, and there will be more announcements to come,” Daniels said in a tweet. Advertisement Stormy Daniels said she was not surprised by the arrest of Michael Avenatti, her former attorney. (Eduardo Munoz Alvarez / AFP/Getty Images) Avenatti’s foes gleefully took to social media to savor his downfall. The president’s son, Donald Trump Jr., seized on the MAGA acronym — Make America Great Again — and gave it a sarcastic and topical twist: “Michael Avenatti Getting Arrested!! !” It soon became a rallying cry of pro-Trump forces. Trump meets his match: Stormy Daniels’ combative lawyer Michael Avenatti » Advertisement Avenatti was accused of “attempting to extract more than $20 million” from Nike. He allegedly threatened to hold a news conference if Nike didn’t pay his client, an Amateur Athletic Union coach in California who alleged the company was paying families of high school basketball prospects, and hire Avenatti for an internal investigation. The coach is Gary Franklin Sr. of the California Supreme, according to two people familiar with the matter who spoke on the condition they not be identified. The program has developed a national reputation for producing top-flight players, including Deandre Ayton, last year’s No. 1 NBA draft pick. After Avenatti and Nike’s attorneys met on March 19, federal investigators launched a sting operation and began monitoring all contacts between the lawyer and the sports company, Berman said. They recorded a call on Friday, during which Avenatti allegedly threatened to take $10 billion off Nike’s market capitalization by holding a news conference if his demands were not met. “You guys know enough now to know you’ve got a serious problem,” Avenatti said, according to prosecutors. Advertisement Avenatti’s arrest came hours after what Berman termed a “final meeting” with Nike. During the encounter, Berman said, Avenatti made it clear to Nike’s representatives that the company must “cede to [his] demands or suffer the consequences.” The events Monday capped months of legal and personal drama for the once-obscure plaintiff’s attorney. Avenatti was arrested on suspicion of felony domestic violence on Nov. 14 after a former girlfriend lodged a complaint in Los Angeles. The city attorney’s office decided to settle the matter through an informal hearing. Earlier this month, his law firm, Eagan Avenatti, filed for federal bankruptcy, marking the second time in two years it sought court protection from creditors.<doc-sep>Celebrity lawyer Michael Avenatti was arrested Monday in New York City on charges of trying to extort up to $25 million from Nike by threatening to publicize claims that company employees authorized payments to the families of top high school basketball players. Avenatti also was separately charged in a second federal case in Los Angeles with embezzling a client's money "in order to pay his own expenses and debts" and those of his law firm and coffee company, and of "defrauding a bank in Mississippi," prosecutors said. He faces almost 100 years in prison if convicted in both cases as well as possible disbarment as a lawyer. The famously aggressive litigator gained widespread notoriety in the past year for representing porn star Stormy Daniels in lawsuits against President Donald Trump and his former lawyer Michael Cohen. Those cases were related to a nondisclosure agreement she signed on the eve of the 2016 presidential election to keep quiet about her alleged affair with Trump in exchange for a $130,000 payment. A court sketch of Michael Avenatti seated at defense table with his attorney Federal Defender Sylvie Levin. Elizabeth Williams | CNBC Avenatti was released from Manhattan federal court after a hearing and after signing a $300,000 personal recognizance bond. No actual money is posted for such bail. He would forfeit property or cash equivalent for the dollar amount of the bond if he fails to appear in court for future hearings. "For the entirety of my career, I have fought against the powerful — powerful people and powerful corporations," Avenatti told reporters when he was released. "I will never stop fighting that good fight." He said he was confident that when all the evidence is out, "I will be fully exonerated and justice will be done." Avenatti, who was dressed in a dark navy blue suit, dark shoes, a white shirt and a bright blue tie, was ordered by a judge to surrender his U.S. and Italian passports, and barred from traveling anywhere in the United States other than New York City, Long Island, several counties just north of Manhattan and the Central District of California, which includes the Los Angeles area. At the hearing, where he was represented by a federal public defender, Avenatti was also ordered to have no contact with his alleged co-conspirator, fellow high-profile lawyer Mark Geragos, who is not criminally charged in the case. Avenatti must appear in Los Angeles to face charges there on April 1. The judge also barred Avenatti from transferring more than $5,000 from any account he controls without first getting approval. His hearing in New York occurred in the same courthouse where Cohen pleaded guilty to criminal charges that included ones relating to the hush-money deal with Daniels. A courtroom sketch of Federal Defender Sylvie Levin, Michael Avenatti, Federal Defender Amy Gallicchio, Assistant US Attorney Robert Boone. Elizabeth Williams | CNBC Last year, Avenatti announced that he was considering running for president, but later decided not to run. Daniels replaced Avenatti as her lawyer earlier this month after a fallout with him. Daniels, in a statement released by her new lawyer Clark Brewster, told CNBC that, "Knowing what I know now about Michael, I'm saddened but not shocked regarding his arrest." "I made the decision weeks ago to terminate Michael's services after discovering that he had dealt with me extremely dishonestly, and I will have my own announcement coming soon," Daniels said. Avenatti, 48, was arrested in Midtown Manhattan at the law offices of Boies Schiller Flexner at 12:30 p.m. ET by FBI agents, about 15 minutes after he tweeted that he would be disclosing a big high school and college basketball scandal "perpetrated by" Nike that he supposedly had uncovered. Boies Schiller lawyers were representing Nike, and were scheduled to meet Monday with at their office with Avenatti and his unidentified co-conspirator to discuss Avenatti's demands, according to the company and prosecutors. Tweet Nike stock initially nose dived after Avenatti's tweet, but later recovered much of the losses. The co-conspirator was identified by sources to NBC News as Geragos, a California criminal defense lawyer. Geragos is currently representing actor Jussie Smollet in a case where the "Empire" cast member is accused of lying to Chicago cops about a purported hate-crime attack. A person who answered Geragos's office phone told CNBC, "We are not at liberty to speak on the matter. We are not releasing any comments." Geragos is being represented by prominent New York criminal defense lawyer Benjamin Brafman. Brafman declined to comment when contacted by CNBC. A CNN spokeswoman said that Geragos no longer is a contributor to that news network. Attorney Mark Geragos speaks during a news conference after his client R&B singer Chris Brown was ordered to remain in jail without bail for allegedly violating his probation at Los Angeles Superior court on March 17, 2014 in Los Angeles, California. Kevork Djansezian | Getty Images Prosecutors said Avenatti's alleged effort to shakedown Nike for millions of dollars kicked off in earnest last Tuesday, and quickly escalated over the next two days as he threatened to hold a press conference accusing the company of being involved in bribing amateur basketball players. Avenatti allegedly timed his threats to coincide with Nike's quarterly earnings call and the kickoff the National Collegiate Athletic Association's national championship basketball tournament. According to a criminal complaint, Avenatti offered to refrain from that press conference "only if Nike made a payment of $1.5 million to a client of Avenatti's in possession of information damaging to Nike ... and agreed to 'retain' Avenatti and [the co-conspirator] to conduct an 'internal investigation' — an investigation that Nike did not request — for which Avenatti and [the co-conspirator] demanded to be paid, at a minimum, between $15 [million] and $25 million." The co-conspirator is "an attorney licensed to practice in the state of California, and similarly known for representation of celebrity and public figure clients," the complaint said. The client of Avenatti's is "a coach of an amateur athletic union ... men's basketball program based in California," who for a number of years had a sponsorship agreement with Nike, the complaint said.<doc-sep>At one point in the secretly recorded negotiations, a Boies Schiller lawyer noted that he had never been paid the kind of money by Nike that Avenatti was demanding, court documents say. Prosecutors say Avenatti responded by asking whether the lawyer had ever “held the balls of the client in your hand where you could take five to six billion dollars’ market cap off of them?”<doc-sep>Mr. Avenatti was released Monday evening on $300,000 bond and under several conditions, including restrictions on travel. In a brief news conference after his release, Mr. Avenatti said he was “highly confident” that when all the evidence was presented, he would be “fully exonerated, and justice will be done.” A veteran plaintiffs lawyer, Mr. Avenatti rose to fame in March 2018 when he filed a lawsuit against Mr. Trump on behalf of Ms. Daniels, who said that she had an affair with Mr. Trump and then received a hush-money payment leading up to the 2016 election. Mr. Avenatti became a fixture on cable news, leveraging Ms. Daniels’s case to build his own profile as a foil to Mr. Trump. He was even taken half-seriously when he declared that he was interested in making a presidential run in 2020. Ms. Daniels’s suit, which sought to invalidate a nondisclosure agreement, was dismissed by a federal judge in California this month, and a separate defamation suit Mr. Avenatti filed against Mr. Trump on Ms. Daniels’s behalf was dismissed late last year. The discussion about Ms. Daniels, however, has remained a leading sore point for the Trump administration, as checks made out to her with the president’s signature on them were given to Congress last month by his former personal lawyer, Michael D. Cohen, who has pleaded guilty to federal charges. Last September, Mr. Avenatti inserted himself into the confirmation hearings of Justice Brett M. Kavanaugh. The week before Justice Kavanaugh was confirmed, Mr. Avenatti announced that he had a new client, Julie Swetnick. Ms. Swetnick said that she had witnessed sexual misconduct by Justice Kavanaugh and some of his friends at high school parties in the Washington area in the early 1980s, when she was a college student in Maryland. As Mr. Avenatti’s national profile grew, so did his legal and financial troubles. He was arrested in Los Angeles in November on suspicion of domestic violence, which he called an effort to intimidate him, though he was not charged with a crime. His firm, formerly known as Eagan Avenatti, has repeatedly filed for bankruptcy, most recently on March 7, in Santa Ana, Calif. The charging documents in the Nike case refer to an unnamed co-conspirator, another lawyer who worked with Mr. Avenatti. That lawyer is Mark Geragos, according to people familiar with the matter who requested anonymity, citing the sensitivity of the continuing investigation.<doc-sep>
"At its core, this was an old-fashioned shakedown," prosecutors said Monday. Federal prosecutors in New York and California announced charges against Michael Avenatti on Monday in separate cases targeting the former personal attorney for adult film actress Stormy Daniels. Avenatti, who was arrested in New York City on Monday morning, stands accused of attempting to extort Nike for $20 million and faces additional charges of bank- and tax-fraud. Charges in the separate cases were announced almost simultaneously. In a press conference on Monday, U.S. Attorney for the Central District of California Nick Hanna said investigators in California and New York coordinated the release of charges and Avenatti’s arrest, though the cases were pursued separately. Avenatti was charged with two counts of extortion and two counts of conspiracy to extort from the Southern District of New York, as well as one count of bank fraud and one count of wire fraud from the Central District of California. Prosecutors in New York wrote in a criminal complaint filed Sunday that Avenatti and an unnamed co-conspirator threatened to release damaging information about Nike if the sportswear giant refused to make multi-million dollar payments to them and an additional $1.5 million payment to an individual Avenatti claimed to represent. In a phone call with lawyers for Nike last week, Avenatti and the unnamed co-conspirator allegedly said if those demands were not met, "I'll go take $10 billion dollars off your client's market cap. I'm not f***ing around," according to the criminal complaint. ABC News has learned that the alleged unnamed co-conspirator referenced in the New York case against Avenatti is celebrity attorney Mark Geragos. He has not been charged or arrested, and he did not reply to a request for comment. The U.S. Attorney's Office, citing its policy of not naming people who are not charged, declined to comment. An attorney for Geragos, Benjamin Brafman, declined to comment. Avenatti was not immediately available for a comment. "At its core, this was an old-fashioned shake-down," U.S. Attorney for the Southern District of New York Geoffrey Berman said at a press conference on Monday. Nike said in a statement that the company “will not be extorted or hide information that is relevant to a government investigation," adding that "when Mr. Avenatti attempted to extort Nike over this matter, Nike with the assistance of outside counsel at Boies Schiller Flexner, aided the investigation." Earlier Monday, Avenatti tweeted plans to hold a press conference "to disclose a major high school/college basketball scandal perpetrated by @Nike." Federal investigators told ABC News that Avenatti was taken into custody approximately 15 minutes later. He was ordered released on $300,000 bond Monday evening and was required to surrender his American and Italian passports. He did not enter a plea in court Monday. Upon his release from custody, Avenatti said he was confident at when the evidence is known "I will be fully exonerated and justice will be done." Avenatti will next appear in court on the New York charges on April 25 and in California on April 1. His travel will be restricted to the Southern and Eastern Districts of New York and the Central District of California In addition to the extortion charges in New York, prosecutors in California filed an affidavit over the weekend accusing Avenatti of stealing funds from a client to pay off his own expenses and "defrauded a bank in Mississippi by submitting to the lender false tax returns in order to obtain three loans totaling $4.1 million." "[Avenatti] violated the principals of honesty and fairness," Hanna said Monday. Avenatti, 48, gained prominence for representing Daniels in a defamation lawsuit against President Donald Trump. In December, a federal judge in California ordered Daniels to pay Trump just under $300,000 in legal fees after throwing out her defamation suit in October. Earlier this year, Daniels announced that Avenatti no longer represented her. In a statement from Daniels and her current attorney, Clark Brewster, on Monday, the adult film star said she was "saddened but not shocked by news reports that he has been criminally charged today." "I made the decision more than a month ago to terminate Michael's services after discovering that he had dealt with me extremely dishonestly and there will be more announcements to come," Daniels said. "I ask that the media respect my decision to withhold further public comment regarding Mr. Avenatti at this time." ABC News' Joshua Hoyos and Lauren Pearle contributed to this report.