Update 4: The SDNY has laid out its allegations of extortion against Avenatti - namely, that he tried to extort Nike - during an afternoon press conference.
After claiming to be working on behalf of an amateur basketball team in the AAU that had recently lost a Nike contract worth some $70,000 a year, Avenatti used "illegal and extortionate threats" to try and secure millions of dollars for himself from Nike. The coach from the team told Avenatti that payments had been made by Nike to high school basketball players. Avenatti threatened to make these allegations public if the company didn't meet his demands - paying his client $1.5 million, while awarding Avenatti and a co-conspirator a multi-million dollar contract to conduct an internal investigation.
Avenatti chose the timing of his plot very carefully, approaching Nike shortly before the company was set to report its Q1 earnings, and not to mention March Madness. At one point, he threatened to take $10 billion of Nike market cap.
Lawyers for Nike contacted federal prosecutors and reported the extortion attempt after they were initially contacted by Avenatti. Prosecutors suggested recording the next call with Avenatti - a recording which produced some choice quotations from the infamous "Creepy porn lawyer."
"I'm not f---ing around with this, and I'm not continuing to play games," Avenatti was recorded as saying. "You guys know enough now to know you've got a serious problem. And it's worth more in exposure to me to just blow the lid on this thing. A few million dollars doesn't move the needle for me. I'm just being really frank with you."
"I'll go and I'll go take $10 billion off your client's market cap. But I'm not f---ing around," he said.
When the company's lawyers balked, he said it could skip the investigation if it simply paid him $22 million.
The whole incident - which SDNY described as an "old fashioned shake down" - unfolded over a period of three days, beginning earlier this month. Avenatti was arrested in Manhattan earlier on Monday and brought to the FBI offices.
As one reporter pointed out, the funniest part of the NY Avenatti indictment is the seemingly obvious (for everyone but Avenatti) setup engineered by Nike's lawyers.
This is the funniest part of Avenatti’s indictment:
1. Allegedly makes illegal threat
2. Nike Lawyers call DoJ to tattle
3. DoJ says call Avenatti back and ask him to repeat himself
4. HE FUCKIN DOES
H/t @lachlan pic.twitter.com/JlSrayrA1x
— Geoffrey Ingersoll (@GPIngersoll) March 25, 2019
Watch the full video below:
Officials address arrest of Avenatti related to Nike extortion case
https://t.co/ssOGC6vT6U
— Reuters Top News (@Reuters) March 25, 2019
Meanwhile, here's the far more extensive nearly 200-page complaint filed by federal prosecutors in LA that describes allegations of bank fraud.
https://www.zerohedge.com/news/2019-03-25/nike-tumbles-after-michael-avenatti-warns-major-college-basketball-scandal