Federal prosecutors on Wednesday unveiled a new fraud charge against lawyer Michael Avenatti, accusing him of lying to a client as part of his alleged effort to extort Nike.
The prosecutors also dropped two counts of conspiracy against Avenatti from the case, which was first made public in March, according to a superseding indictment filed in federal court in Manhattan.
Avenatti was charged in federal court in Manhattan on Wednesday with extortion and wire fraud, though prosecutors dropped two conspiracy counts that were in the original indictment.
‘I am extremely pleased that the two counts alleging I engaged in a conspiracy against Nike have just been dismissed by Trump’s DOJ,’ Avenatti wrote on Twitter, referring to the U.S. Department of Justice under President Donald Trump.
‘I expect to be fully exonerated when it is all said and done.’
Avenatti did not immediately respond to a request for comment.
Michael Avenatti has been charged by federal prosecutors with conspiring to extort Nike for $25million. He has pleaded not guilty
Avenatti is best known as the former attorney for Stormy Daniels (left), an adult film star who alleges she had a sexual encounter with Donald Trump and was paid hush money to keep silent about it
The refreshed indictment returned Wednesday in Manhattan federal court adds an honest services wire fraud charge.
Avenatti is charged with transmission of interstate communications with intent to extort, extortion, and wire fraud. If convicted, he could face at least 40 years in prison.
Prosecutors had previously charged Avenatti with extortion, accusing him of threatening to publicize a claim by one of his clients, a basketball club coach, that Nike arranged for payments to elite college basketball recruits.
Avenatti demanded that the athletic wear company pay the coach $1.5million and pay himself more than $20million, prosecutors said.
Avenatti is alleged to have threatened to reveal damaging information about Nike if the shoe company didn’t pay him. A Nike logo is seen above outside a Nike shop in London
The new indictment adds a claim that Avenatti defrauded the coach.
Prosecutors said Avenatti concealed the fact that Nike agreed to pay the coach to settle the case as long as it did not have to pay Avenatti, and instead continued trying to use the case for his own benefit.
Federal prosecutors in Southern California have separately charged Avenatti with wire fraud, bank fraud and other crimes, saying he stole millions of dollars from clients.
Avenatti has pleaded not guilty to all the charges against him.
He was also charged with cheating porn star Stormy Daniels of book deal income.
Avenatti once represented Daniels over a nondisclosure deal regarding an alleged affair with President Donald Trump.
In March, Avenatti was arrested and charged with fraud, embezzlement and extortion just hours after going on Twitter and vowing to expose a major scandal involving Nike and college basketball.
After his release on bond, he followed through on his threat to expose Nike.
In a series of tweets, the lawyer named both DeAndre Ayton and Bol Bol as examples of players who received improper funds from Nike.
Ayton played a single season at the University of Arizona before becoming the first pick in the 2018 draft while Bol Bol is the son of 7ft 7in NBA great Manute Bol, who passed away back in 2010.
Avenatti claimed Bol Bol ‘and his handlers’ took ‘large sums’ to play for the University of Oregon, a Nike sponsored school.
He also implicated Ayton, writing: ‘Ask DeAndre Ayton and Nike about the cash payments to his mother and others.’
The 21-year-old Bahamian signed with the Phoenix Suns in a two-year, $17.7million contract last year.
He attended the University of Arizona, a Nike-sponsored school, for a year before signing with the Suns because he was too young to play professionally.
In February last year, ESPN reported that a University of Arizona coach was heard on a wire-tapped call discussing paying Ayton $100,000 to sign with the school. The coach denied it at the time.
A spokesperson for the University of Oregon said: ‘We are unaware of any evidence that would support these allegations.
Prosecutors say that Avenatti threatened to go public with allegations that Nike improperly paid two basketball players – Bol Bol (left) and Phoenix Suns star DeAndre Ayton (right) – to steer them toward Nike-preferred colleges.
‘Diligent inquiry last summer into the amateur status of our student-athletes revealed no indication of improper payments made to any student-athletes or their families.’
Ayton, who now plays professionally for the NBA’s Phoenix Suns, has denied receiving payments while he was a prized recruit still in high school.
Federal prosecutors say that the investigation into alleged bribery of college basketball players is ongoing.
Avenatti claims he has proof that Nike was paying players illegally to sign with certain schools when they were in high school.
Prosecutors say that rather than try to expose the scheme, he threatened Nike and demanding up to $25million to stay quiet about what he claims he knows.
A second person is listed as a co-conspirator and not identified in the filings. A source who spoke with DailyMail.com said that the lawyer is Mark Geragos (pictured)
Avenatti is alleged to have threatened to share the allegations, whether proven or not, the night before Nike’s quarterly earnings call to drive its stock price down.
According to his indictment, Avenatti’s interest in the case began with the coach of an amateur youth travel basketball team who he represents.
The team had recently lost its $72,000 sponsorship deal from Nike. The coach told Avenatti that he had information about alleged illicit payments to college players made by Nike.
Last spring, Avenatti and another lawyer, reported to be California attorney Mark Geragos, contacted Nike claiming to not only know about the ‘scam’ but insisting the company should pay his client $1.5million to stay quiet and give him an additional $15million to $25million to ‘investigate’ it.
He said the fee would be used as a retainer to conduct an ‘internal investigation’ into it, according to the complaint.
Geragos has not been charged. He is described as a co-conspirator in the charging document, according to people briefed on the matter.
In California, he is accused of stealing from former client Gregory Barela, who he claims is a close friend of President Trump.
‘We did nothing wrong and were entitled to every dollar received. And of course, [Barela] is represented by a person close to Trump,’ he said in a statement.