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Monday, 25 March 2019

Unlabelled [Reality-TV-Fanatics] Stormy Daniels' ex-lawyer Michael Avenatti arrested for alleged $20 million extortion scheme against Nike, embezzling client's money, defrauding bank

[Reality-TV-Fanatics] Stormy Daniels' ex-lawyer Michael Avenatti arrested for alleged $20 million extortion scheme against Nike, embezzling client's money, defrauding bank

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  Looks like he might be in big trouble
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Stormy Daniels' ex-lawyer Michael Avenatti arrested for alleged $20 million extortion scheme against Nike, embezzling client's money, defrauding bank

| @_DanMangan

CNBC.com


  • Celebrity lawyer Michael Avenattii is being charged with wire and bank fraud, federal authorities said Monday.
  • A press conference is scheduled to discuss the charges against Avenatti in Los Angeles on Monday afternoon.
  • Avenatti had represented porn star Stormy Daniels in her lawsuit against President Donald Trump and his former lawyer Michael Cohen.

Celebrity lawyer Michael Avenatti has been arrested on charges related to an alleged $20 million extortion of the athletic apparel company Nike, federal authorities in New York City said Monday.
Avenatti also is charged in a separate federal case out of Los Angeles, where he is accused of embezzling a client's money "in order to pay his own expense and debts," and of "defrauding a bank in Mississippi," prosecutors said.
Avenatti, 48, had represented porn star Stormy Daniels in her lawsuit against President Donald Trump and his former lawyer Michael Cohen related to a non-disclosure agreement she had 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.

Michael Avenatti


A press conference is scheduled to discuss the charges against Avenatti in Los Angeles on Monday afternoon. Avenatti is due to be presented in federal court on Monday.
"A lawyer has a basic duty not to steal from his client," said U.S. Attorney for Los Angeles Nick Hanna. "Mr. Avenatti is facing serious criminal charges alleging he misappropriated client trust funds for his personal use and he defrauded a bank by submitting phony tax returns in order to obtain millions of dollars in loans."
The charges were revealed less than an hour after Avenatti announced a press conference to discuss purported claims against Nike. An FBI agent said in the complaint in New York that the lawyer had threatened to hold a press conference on the eve of Nike's quarterly earnings call to announced "allegations of misconduct by employees of Nike."

A criminal complaint filed in New York against Avenatti says he "devised a scheme to extort a company by means of an interstate communication by threatening to damage the company's reputation if the company did not agree to make multi-million dollar payments to Avenatti and [co-conspirator], and further agree to pay an additional $1.5 million to a client of Avenatti's."
Michael Avenatti
Andrew Cullen | Reuters
Michael Avenatti
The complaint says that last Wednesday, Avenatti and a cooperating witness spoke by phone with lawyers for Nike "during which Avenatti stated, with respect to his demands for payment of milions of dollars, that if those demands were not met 'I'll go take ten billion dollars off your client's market cap ... I'm not f---ing around.' "
Nike had no immediate comment.


In the Los Angeles case, Avenatti is accused of negotiating a $1.6 million settlement for a client in a civil case, but then giving the client "a bogus settlement agreement with a false payment date of March 10, 2018," according to the U.S. Attorney's Office in Los Angeles.
That office said "Avenatti misappropriated his client's settlement money and used it to pay expenses for his coffee business, Global Baristas US LLC, which operated Tully's Coffee stores in California and Washington state, as well as for his own expenses.:
"When the fake March 2018 deadline passed and the client asked where the money was, Avenatti continued to conceal that the payment had already been received, court documents said," according to prosecutors.
"Avenatti also allegedly defrauded a bank in Mississippi by submitting to the lender false tax returns in order to obtain three loans totaling $4.1 million for his law firm and coffee business in 2014," the L.A. U.S. Attorney's Office said.
"According to the affidavit, Avenatti obtained the loans by submitting fabricated individual income tax returns (Forms 1040) for 2011, 2012, and 2013, reporting substantial income even though he had never filed any such returns with the Internal Revenue Service," the prosecutor's office said. "The phony returns stated that he earned $4,562,881 in adjusted gross income in 2011, $5,423,099 in 2012, and $4,082,803 in 2013, according to the affidavit. Avenatti allegedly also claimed he paid $1.6 million in estimated tax payments to the IRS in 2012 and paid $1.25 million in 2013."
"In reality, Avenatti never filed personal income tax returns for 2011, 2012 and 2013 and did not make any estimated tax payments in 2012 and 2013. Instead of the millions of dollars he claimed to have paid in taxes, Avenatti still owed the IRS $850,438 in unpaid personal income tax plus interest and penalties for the tax years 2009 and 2010," the U.S. Attorney's Office said. "Avenatti also submitted a fictitious partnership tax return for his law firm."
Additional reporting by Kevin Breuninger of CNBC

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