Feds: Avenatti tried to extort $20M from Nike

Avenatti charged with trying to extort more than $20M from Nike (1:35)

Mark Schlabach reports on attorney Michael Avenatti being charged with extortion against Nike. (1:35)

Federal prosecutors in New York and California have charged celebrity attorney Michael Avenatti with extortion and bank and wire fraud.

In the New York case, Avenatti was charged with attempting to extort more than $20 million in payments from Nike by threatening to use his ability to garner publicity to inflict substantial financial and reputational harm on the company if his demands were not met.

Avenatti, 48, had previously represented adult film star Stormy Daniels, whose real name is Stephanie Clifford, in her lawsuit against President Donald Trump and his former lawyer Michael Cohen.

Avenatti appeared in court Monday evening and was released on $300,000 bond. He is barred from having any contact with an unidentified co-conspirator in the case. He also must report any financial transactions of more than $5,000.

His next court appearance is scheduled for April 1 in a federal court in Los Angeles.

"For the entirety of my career, I have fought against the powerful: powerful people and powerful corporations," Avenatti told reporters after his release. "I will never stop fighting that good fight. I am highly confident that when all of the evidence is laid bare in connection with these cases, when it is all known, when due process occurs, that I will be fully exonerated and justice will be done."

In the early hours of Tuesday morning, Avenatti again tweeted that he is innocent.

The U.S. attorney in New York, Geoffrey S. Berman, said Avenatti engaged in "a shakedown.''

"When lawyers use their law licenses as weapons, as a guise to extort payments for themselves, they are no longer acting as attorneys. They are acting as criminals,'' Berman said.

Prosecutors in New York said their investigation began only last week and was complete within days.

According to the New York complaint, Avenatti last week threatened to hold a news conference on the eve of Nike's quarterly earnings call and the start of the NCAA men's basketball tournament, at which time he would announce allegations of misconduct by Nike employees.

"Avenatti stated that he would refrain from holding the press conference and harming Nike 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 complaint said.

Federal prosecutors identified the co-conspirator as "an attorney licensed to practice in the state of California, and similarly known for representation of celebrity and public figure clients."

According to multiple reports, celebrity attorney Mark Geragos is the unnamed co-conspirator. His clients include Colin Kaepernick, who agreed to a settlement last month in his collusion grievance against the NFL, as well as late pop star Michael Jackson, singer Chris Brown and "Empire" star Jussie Smollett.

Nike launched an advertising campaign last year centered around Kaepernick, after the former NFL quarterback began a national conversation by kneeling during the national anthem to protest social inequality and police brutality.

Geragos also was a legal analyst for CNN, but on Monday, a spokesman for the network said Geragos is no longer a contributor.

The U.S. attorney's office, meanwhile, said the allegations Avenatti made about Nike's possible role in a widespread college basketball recruiting scandal also are being looked at. "Our investigation is continuing," a U.S. Attorney's Office spokesperson said.

The complaint said Avenatti's client is a "coach of an amateur athletic union ('AAU') men's basketball program based in California."

"For a number of years, the AAU program coached by Client-1 had a sponsorship agreement with Nike pursuant to which Nike paid the AAU program approximately $72,000 annually," the complaint said.

Sources told ESPN that the AAU coach is Gary Franklin of the California Supreme program in Los Angeles. Franklin's former players include NBA players Deandre Ayton (who played at the University of Arizona) and De'Anthony Melton (USC) of the Phoenix Suns, Solomon Hill (Arizona) of the New Orleans Pelicans and Aaron Holiday (UCLA) of the Indiana Pacers. Franklin also has coached several current college players, including Oregon's Bol Bol and UCLA's Shareef O'Neal.

Franklin didn't immediately respond to text messages from ESPN.

In the California case, Avenatti was accused of embezzling a client's money to pay his own expenses and debts -- as well as those of his coffee business and law firm. The U.S. attorney's office also said he defrauded a bank by using phony tax returns to obtain millions of dollars in loans.

Federal prosecutors announced the charges against Avenatti on Monday less than an hour after he tweeted that he was holding a news conference on Tuesday morning.

According to the complaint, the co-conspirator contacted Nike and said he wished to speak to representatives of the company and that the discussion should occur in person, not over the phone, as it pertained to a sensitive matter.

During a meeting with Nike's lawyers in New York this past Tuesday, Avenatti said the AAU coach, whose contract Nike had recently decided not to renew, had evidence that "one or more Nike employees had authorized and funded payments to the families of top high school basketball players and/or their families and attempted to conceal those payments, similar to conduct involving a rival company [Adidas] that had recently been the subject of a criminal prosecution in this district. Avenatti identified three former high school players, in particular, and indicated that his client was aware of payments to others, as well."

According to prosecutors, Avenatti demanded Nike pay his client $1.5 million to remain silent regarding any claims the coach might have about Nike's alleged payments to top players and their families and said Nike must hire Avenatti and the co-conspirator to conduct an internal investigation, with the stipulation that if the company hired another firm to conduct the inquiry, it would still have to pay Avenatti and the co-conspirator "at least twice the fees of any other firm hired."

"At the end of the meeting, Avenatti and [the co-conspirator] indicated that Nike would have to agree to accept those demands immediately or Avenatti would hold his press conference," the complaint said.

Later that day, Nike's attorneys contacted the co-conspirator to tell him the company needed more time. Avenatti and the co-conspirator agreed to give Nike two days to consider the offer. Nike's attorneys contacted the Southern District of New York and made prosecutors aware of Avenatti's threats and extortion demands.

On Wednesday, one of Nike's attorneys sent the co-conspirator a text message to schedule a telephone call later that day. The call was recorded and monitored by law enforcement. During a three-way call later that day, Avenatti reiterated that he expected to "get a million five for our guy" and be "hired to handle the internal investigation."

"If you don't wanna do that, we're done here," Avenatti told Nike's attorneys.

"I'm not f---ing around with this, and I'm not continuing to play games," Avenatti said during the call, according to the complaint. "You guys know enough now to know you've got a serious problem. And it's worth more in exposure to me to just blow the lid on this thing. A few million dollars doesn't move the needle for me. I'm just being really frank with you. So if that's what, if that's what's being contemplated, then let's just say it was good to meet you, and we're done. And I'll proceed with my press conference tomorrow.

"I'm not f---ing around with this thing anymore. 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. ... And I'll go, and I'll go take 10 billion dollars off your client's market cap. But I'm not f---ing around."

During a meeting with Nike's attorneys the next day, Avenatti said he and his co-conspirator would require a $12 million retainer to be paid immediately and to be "deemed earned when paid," with a minimum guarantee of $15 million in billing hours and a maximum of $25 million.

When one of Nike's attorneys asked Avenatti if the sneaker company could pay one lump sum and not hire them to conduct the internal investigation, Avenatti 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. ... Full confidentiality, we ride off into the sunset."

Avenatti told Nike's attorneys: "I just wanna share with you what's going to happen if we don't reach a resolution. ... As soon as this becomes public, I am going to receive calls from all over the country from parents and coaches and friends and all kinds of people. This is always what happens. And they are all going to say, 'I've got an email or a text message.' Now, 90 percent of that is going to be bulls--- because it's always bulls--- 90 percent of the time, always, whether it's R. Kelly or Trump. The list goes on and on. But 10 percent of it is actually going to be true, and then what's going to happen is that this is going to snowball. That's going to be the Washington Post, the New York Times, ESPN, a press conference, and the company will die -- not die, but they are going to incur cut after cut after cut after cut, and that's what's going to happen as soon as this thing becomes public."

On Thursday, Avenatti tweeted a link to a story about an Adidas employee being sentenced to nine months in prison for his role in a pay-for-play scheme to send high-profile recruits to Adidas-sponsored programs. Avenatti included the remark: "Something tells me that we have not reached the end of this scandal. It is likely far far broader than imagined ..."

ESPN's Paula Lavigne and The Associated Press contributed to this report.