Michael Avenatti Gets Bad News, Judge Orders Him to Face Fraud Charge as Nike Trial Looms

Michael Avenatti Gets Bad News, Judge Orders Him to Face Fraud Charge as Nike Trial Looms


A U.S. judge on Thursday rejected celebrity
lawyer Michael Avenatti’s bid to dismiss a criminal charge that he defrauded a client
who he said knew about improper payments that Nike allegedly made to families of college
basketball recruits. U.S. District Judge Paul Gardephe in Manhattan
ruled three days after refusing to dismiss two extortion charges accusing Avenatti of
threatening a news conference about the payments unless Nike paid him up to $25 million. Nike has denied wrongdoing. “When the actual evidence is heard at trial
rather than the baseless allegations in the indictment, I will be fully cleared because
I did nothing wrong,” Avenatti, 48, said in a text message. “I am innocent.” A spokesman for U.S. Attorney Geoffrey Berman
in Manhattan declined to comment. Known for representing porn star Stormy Daniels
and criticizing President Donald Trump, Avenatti faces a Jan. 21 trial over his dealings with
Nike, and two criminal trials this spring on unrelated charges. He has pleaded not guilty to all charges. Prosecutors accused Avenatti of telling Nike
last March he would not publicize his client Gary Franklin’s claims about the payments
if the sportswear company would pay Franklin $1.5 million, and him up to $25 million to
conduct an internal probe. They said Avenatti also failed to tell Franklin,
who coached a youth basketball team in a Nike-sponsored league, that Nike offered to settle the coach’s
claims without paying Avenatti, and instead used those claims to secure riches for himself. Prosecutors said this fraudulently deprived
Franklin of Avenatti’s “honest services.” Avenatti said the charge should have been
thrown out because it did not mention a “bribe” or “kickback,” which he said was necessary
under a 2010 Supreme Court case involving former Enron Corp Chief Executive Jeffrey
Skilling. Gardephe, however, said the absence of those
words had no “talismanic significance,” and it was enough for the government to accuse
Avenatti of violating a “known legal duty” to Franklin even if Nike never paid Avenatti
a cent. “The indictment pleads facts sufficient
to demonstrate that Avenatti violated the legally cognizable duties a lawyer owes to
his client,” Gardephe wrote. The fraud count and one extortion count carry
maximum 20-year prison terms. Avenatti also faces an April 21 trial in Manhattan
for allegedly cheating Daniels out of proceeds from a book contract, and a May 19 trial in
Santa Ana, California for allegedly defrauding clients out of millions of dollars and lying
to the Internal Revenue Service. The case is U.S. v. Avenatti, U.S. District
Court, Southern District of New York, No. 19-cr-00373.

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