LOS ANGELES (CBSLA) – Newport Beach attorney Michael Avenatti was jailed Monday on charges of bank fraud, embezzling a customer’s cash and attempting to obtain more than $20 million from athletic equipment giant Nike in cases filed in Santa Ana and New York.
Avenatti, 48, of Century City, was arrested in New York on a two-count felony complaint declared wire fraud and bank fraud, according to U.S. Lawyer Nicola Hanna.
He also was detained in a separate federal case submitted in New York, in which he was accused of threatening to use his capability to get promotion to harm Nike. District attorneys say he demanded that the clothing company offer him $10 million.
If convicted on both charges, Avenatti would face up to 50 years in federal jail.
Less than an hour prior to he was apprehended Monday early morning, Avenatti tweeted that he was holding a news conference Tuesday to announce that he had exposed a college basketball scandal “perpetrated by Nike.”
“This bad guy conduct reaches the greatest levels of Nike and involves some of the biggest names in college basketball”, Avenatti tweeted.
At a news conference Monday early morning, federal district attorneys stated Avenatti’s declared monetary criminal activities funded a “lavish lifestyle” that consisted of more than $200,000 in regular monthly expenses and owning a $5 million home in Laguna Beach.
According to prosecutors, Avenatti negotiated a settlement which called for $1.6 million in settlement money to be paid on January 10, 2018, but then provided the customer a fake settlement agreement with a incorrect payment date of March 10, 2018.
The bad guy complaint alleges Avenatti misappropriated his customer’s settlement money and used it to pay costs for his coffee organisation, Worldwide Baristas US LLC, which operated Tully’s Coffee shops in California and Washington state, as well as for his own costs.
When the phony March 2018 deadline passed and the client inquired about the funds, Avenatti continued to hide that the payment had already been gotten, court documents declared.
Prosecutors state Avenatti likewise supposedly defrauded a bank in Mississippi by submitting to the lending institution incorrect tax returns in order to get three loans totaling $4.1 million for his law firm and coffee company in 2014.
“A legal representative has a basic duty not to take from his client,” stated U.S. Lawyer Nick Hanna. “Mr. Avenatti is dealing with severe criminal charges alleging he misused customer trust funds for his personal use and he defrauded a bank by submitting phony tax returns in order to get millions of dollars in loans.”
Avenatti’s preliminary court look is scheduled for Monday afternoon in New York. He is expected to face the criminal charges in the California case in U.S. District Court in Santa Ana at a later on date.
Porn star Rainy Daniels, who was previously represented by Avenatti, stated she was “saddened however not stunned” over his arrest.
In a declaration Monday on Twitter, Daniels states she fired Avenatti a month ago after “discovering that he had dealt with me exceptionally dishonestly,” however wouldn’t elaborate.
Celebrity lawyer Mark Geragos was named as a co-conspirator in Avenatti’s declared extortion of Nike, The Associated Press verified Monday afternoon.
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