Michael Avenatti arrested on federal charges of wire fraud and extortion

Attorney Michael Avenatti has been arrested on federal charges in two separate cases in California and New York, federal prosecutors in both states said Monday.

The U.S. attorney in Los Angeles announced Avenatti faces bank and wire fraud charges in the Central District of California for allegedly embezzling money from a client and defrauding a bank through fake tax returns.

The U.S. attorney for the Southern District of New York announced separate charges that Avenatti allegedly tried to extort Nike for $20 million. Prosecutors said he threatened to release damaging information about the company if it did not meet his demands.

The criminal complaint says Avenatti told attorneys for Nike on a phone call he would “go take $10 billion off your client’s market cap … I’m not f—ing around.”

In the California case, prosecutors charged Avenatti with wire fraud, saying he negotiated a $1.6 million settlement for a client but lied about when the payment was due to be made, telling the client it was coming two months later than it actually did. Prosecutors say he used the money in the intervening months to pay expenses for his coffee business and personal use.

Avenatti is also charged with bank fraud in California. According to the criminal complaint, Avenatti lied about his income to obtain more than $4 million in loans from a Mississippi bank in 2014. The complaint alleges Avenatti gave The Peoples Bank bogus tax returns showing more than $14 million in earnings for the three preceding years. In fact, the complaint alleges, Avenatti never filed returns for those years, and owed the IRS $850,000 from prior years.

An attorney for Avenatti did not immediately respond to a request for comment. Prosecutors in both offices planned press conferences Monday afternoon to detail the charges.

Avenatti came to prominence for his representation of Stormy Daniels, the adult film star who alleged she had an affair with President Trump and was paid for her silence in the weeks before the 2016 election. On Monday, Daniels said she cut ties with Avenatti more than a month ago “after discovering that he had dealt with me extremely dishonestly.”

Lex Haris contributed to this report.

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