LOS ANGELES (CBSLA) – Newport Beach attorney Michael Avenatti was detained Monday on charges of bank fraud, embezzling a client’s loan and trying to obtain more than $20 million from athletic devices 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 grievance declared wire fraud and bank scams, according to U.S. Attorney Nicola Hanna.
He also was arrested in a different federal case filed in New York, in which he was implicated of threatening to usage his ability to get promotion to damage Nike. District attorneys state he required that the clothing company provide him $10 million.
If founded guilty on both charges, Avenatti would face up to 50 years in federal prison.
Less than an hour before he was jailed Monday early morning, Avenatti tweeted that he was holding a news conference Tuesday to reveal that he had uncovered a college basketball scandal “perpetrated by Nike.”
“This crook conduct reaches the greatest levels of Nike and includes some of the greatest names in college basketball”, Avenatti tweeted.
At a news conference Monday early morning, federal district attorneys stated Avenatti’s declared monetary crimes funded a “lavish way of life” that consisted of more than $200,000 in month-to-month expenditures and owning a $5 million house 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 offered the customer a fake settlement contract with a incorrect payment date of March 10, 2018.
The bad guy grievance alleges Avenatti abused his customer’s settlement cash and used it to pay expenditures for his coffee organisation, International 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 inquired about the funds, Avenatti continued to hide that the payment had already been gotten, court files declared.
Prosecutors say Avenatti also presumably defrauded a bank in Mississippi by sending to the lending institution false tax returns in order to obtain three loans amounting to $4.1 million for his law firm and coffee organisation in 2014.
“A lawyer has a basic task not to take from his client,” stated U.S. Lawyer Nick Hanna. “Mr. Avenatti is facing serious criminal charges alleging he misused client trust funds for his personal usage and he defrauded a bank by submitting phony tax returns in order to obtain millions of dollars in loans.”
Avenatti’s preliminary court appearance is scheduled for Monday afternoon in New York. He is anticipated to face the criminal charges in the California case in U.S. District Court in Santa Ana at a later on date.
Porn star Stormy Daniels, who was formerly represented by Avenatti, said she was “saddened but not shocked” 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 extremely dishonestly,” but wouldn’t fancy.
Celebrity attorney Mark Geragos was named as a co-conspirator in Avenatti’s alleged extortion of Nike, The Associated Press confirmed Monday afternoon.
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