Politics

Michael Avenatti charged with ripping off porn star Stormy Daniels, trying to extort Nike in new indictments

Key Points
  • Controversial lawyer Michael Avenatti was indicted Wednesday in separate cases charging him with stealing about $300,000 from his former porn star client Stormy Daniels, and with trying to extort athletic shoe giant Nike out of tens of millions of dollars by threatening to go public with embarassing information about the company.
  • Prosecutors claim that Avenatti ripped off Daniels by taking payments for her book sales and paying her just half of what she was owed. The indictment accuses him of spending some of the money he allegedly swindled from Daniels on a lease payment for his Ferrari, travel expenses, dry cleaning and $56,000 in payroll at his law firm.
  • Avenatti also faces an unrelated indictment in federal court in California on charges of ripping off clients and tax crimes. He gained notoriety last year for his full-throated representation of porn star Stormy Daniels in her lawsuits against President Donald Trump and his former personal lawyer and fixer Michael Cohen.
Adult-film actress Stephanie Clifford, also known as Stormy Daniels speaks US Federal Court with her lawyer Michael Avenatti (R) on April 16, 2018, in Lower Manhattan, New York.
Eduardo Munoz Alvarez | AFP | Getty Images

Controversial lawyer Michael Avenatti was indicted Wednesday in separate cases charging him with stealing about $300,000 from his former porn star client Stormy Daniels, and with trying to extort athletic shoe giant Nike out of tens of millions of dollars by threatening to go public with claims the company was facilitating payments to the families of high school basketball stars.

While the Nike-related indictment was expected because it mirrors allegations in a criminal complaint executed against Avenatti in March, the claims related to Daniels were brand new.

Avenatti, who last year was mulling a run for the White House, is now charged in three separate federal indictments, including one pending in California related to alleged theft of client funds and other crimes, and faces the possibility of many years in prison if convicted.

According to one of the new indictments in New York, Avenatti allegedly forged Daniels' signature on a document that gave wire fund transfer information to her literary agent, which helped direct the money paid out for the book sales to a bank account controlled by Avenatt.

The lawyer had become widely known and notorious last year for his representation of Daniels, who was paid $140,000 on the eve of the 2016 presidential election by President Donald Trump's then-personal lawyer Michael Cohen to keep her quiet about her alleged  sexual tryst with Trump a decade earlier. Trump denies having sex with her.

Prosecutors claim that Avenatti ripped off Daniels by taking payments for her book sales and paying her just half of what she was owed.

The indictment, which charges him with wire fraud and aggravated identity theft, accuses him of spending some of the money he allegedly swindled from Daniels on a lease payment for his Ferrari, travel expenses, dry cleaning and $56,000 in payroll at his law firm.

"Michael Avenatti abused and violated the core duty of an attorney – the duty to his client," said Manhattan U.S. Attorney Geoffrey S. Berman.

"As alleged, he used his position of trust to steal an advance on the client's book deal. As alleged, he blatantly lied to and stole from his client to maintain his extravagant lifestyle, including to pay for, among other things, a monthly car payment on a Ferrari. Far from zealously representing his client, Avenatti, as alleged, instead engaged in outright deception and theft, victimizing rather than advocating for his client."

Watch CNBC's full interview with Michael Avenatti
VIDEO9:1709:17
Watch CNBC's full interview with Michael Avenatti

Avenatti is also accused in the other indictment of telling lawyers for Nike "I'll take ten billion dollars off your client's market cap" by publicly accusing the company's employees of authorizing and funding payments to families of top high school basketball players if Nike did not fork over millions of dollars to his client and to him personally.

Attorney Michael Avenatti makes his way to an awaiting vehicle after addressing the media outside the Santa Ana federal courthouse in Santa Ana, California on May 7, 2019
Frederic J. Brown | AFP | Getty Images

Avenatti, in a response to an email requesting comment from CNBC, wrote:

No monies relating to Ms. Daniels were ever misappropriated or mishandled. She received millions of dollars worth of legal services and we spent huge sums in expenses. She directly paid only $100.00 for all that she received. I look forward to a jury hearing the evidence.

I look forward to a jury hearing all of the evidence and passing judgment on my conduct. At no time was any money misappropriated or mishandled. I will be fully exonerated once the relevant emails, contracts, text messages, and documents are presented. I was entitled to any monies retained relating to a book per my agreement with the client. It was part of my agreement for representation and compensation.

Avenatti later tweeted: "I was entitled to any monies retained per my agreement with the client. My agreement for representation and compensation included a percentage of any book proceeds."

In the Nike-related indictment unsealed Wednesday in U.S. District Court in Manhattan, Avenatti is charged with extortion, conspiracy to commit extortion, conspiracy to transmit interstate communications with intent to extort, and transmission of interstate communications with intent to extort.

Read the new Nike indictment against Michael Avenatti here: