Avenatti accused of scam to extort money from Nike

Michael Avenatti, the lawyer best known for representing porn star Stormy Daniels in her lawsuits against President Donald Trump, was arrested Monday as federal prosecutors filed charges accusing him of attempting to extort millions of dollars from Nike by threatening negative publicity right before an earnings call and the NCAA men’s basketball tournament.

In court documents filed Monday, federal prosecutors in Manhattan said Avenatti and a client, a former youth basketball coach, told Nike that they had evidence that Nike employees had funneled money to recruits. The prosecutors said the men threatened to release the evidence to Avenatti damage Nike unless the company paid them at least $22.5 million.

‘‘Avenatti used illegal and extortionate threats for the purpose of obtaining millions of dollars in payments from a public company,’’ Geoffrey Berman, the U.S. attorney in Manhattan, said of the "shakedown."

"When lawyers use their law licenses as weapons, as a guise to extort payments for themselves, they are no longer acting as attorneys.’’

Berman said Nike contacted his office March 19.

The prosecutors also said an unnamed attorney joined Avenatti in demanding that Nike pay. They described the attorney as a coconspirator but didn't charge him.

A person familiar with the investigation said Los Angeles celebrity attorney Mark Geragos is that co-conspirator. Geragos's clients have included Michael Jackson, Winona Ryder, Scott Peterson and, most recently, Jussie Smollett.

CNN, which has used Geragos as a contributor, immediately cut ties with him. Geragos could be reached for comment.

Avenatti was arrested in New York. After being released Monday on $300,000 bond, he said he is confident he will be "fully exonerated."

Avenatti also faces charges in federal court in Los Angeles, where prosecutors accused him of bank and wire fraud. He was charged with embezzling a client’s money to pay his debts and defrauding a bank with false tax returns to obtain loans.

Nicolahanna, the U.S. attorney in Los Angeles, said the two cases are unrelated, but authorities in both states coordinated to arrest Avenatti and execute search warrants.