Michael Avenatti, the attorney best known for representing porn star Stormy Daniels, was arrested Monday by federal law enforcement officials on charges stemming from two separate cases in Los Angeles and New York.
Federal prosecutors in Los Angeles say Avenatti embezzled a client’s money in order to pay his own expenses and debts as well as defrauding a bank by using fake tax returns. He faces two felony counts of wire fraud and bank fraud.
According to a criminal complaint filed by the Central District of California, Avenatti negotiated a $1.6 million settlement on behalf of his client, but gave the client a “bogus settlement agreement with a false payment date.” He then used the client’s settlement money to pay his own expenses, including putting money toward his coffee business, prosecutors say.
Avenatti is also accused of defrauding a bank in Mississippi by submitting false tax returns in 2014 to obtain $4.1 million worth of loans for his law firm and coffee business.
Meanwhile, federal prosecutors in New York say Avenatti attempted to extort $20 million out of Nike by threatening to release damaging information about the company if it did not meet his demands.
“I’ll go take ten billion dollars off your client’s market cap,” Avenatti told attorneys for Nike on March 19, according to a complaint filed by the Southern District of New York. “I’m not fucking around.”
Avenatti did not immediately return HuffPost’s request for comment.
See the Southern District of New York’s full complaint below.
Avenatti announced shortly after noon on Twitter that he planned to hold a press conference “to disclose a major high school/college basketball scandal” perpetrated by Nike.
“The criminal conduct reaches the highest levels of Nike and involves some of the biggest names in college basketball,” he tweeted.
Nike did not immediately respond to HuffPost’s request for comment.
Avenatti rose to national fame in recent years for representing Daniels, who has alleged she had an affair with President Donald Trump in 2006 and that he paid her to stay silent about it ahead of the 2016 election.
Earlier this month, Avenatti’s office said he was no longer representing Daniels, citing “various reasons that we cannot disclose publicly due to the attorney-client privilege.”
Daniels said Monday that she was “saddened but not shocked” by Avenatti’s arrest.
“I made the decision more than a month ago to terminate Michael’s services after discovering that he had dealt with me extremely dishonestly,” she said in a statement. “There will be more announcements to come.”
This is a developing story. Check back for updates.