U.S. says Michael Avenatti shook down Nike, defense disagrees as extortion trial nears end

[February 12, 2020]  By Jonathan Stempel

NEW YORK (Reuters) - Michael Avenatti's extortion trial neared its end on Tuesday as a federal prosecutor said the celebrity lawyer had an "agenda" to shake down Nike Inc by threatening to tar it with corruption allegations, while the defense said Avenatti was simply representing his client aggressively.

Prosecutors have charged Avenatti with threatening to hold a press conference to discuss Nike's alleged payments to families of college basketball recruits, unless the apparel company paid him and another lawyer $15 million to $25 million for an internal probe and his whistleblowing client $1.5 million.

Avenatti was also accused of defrauding his client Gary Franklin, the coach of California Supreme, once part of a Nike-sponsored basketball league.

He testified he did not seek a probe, preferring a quieter settlement in which Nike would fire executives behind the payments.

Avenatti, 48, became famous representing the adult film actress Stormy Daniels in lawsuits against Donald Trump and becoming a self-described "nemesis" of the U.S. president, including through hundreds of television appearances.

In his closing argument in Manhattan federal court, Assistant U.S. Attorney Matthew Podolsky said Avenatti was trying to escape "a mountain of debt" when he tried to extort Nike last March.

He also said a probe would have made no sense for Franklin, who wanted to restore his relationship with the company.

Podolsky replayed a recording of Avenatti telling a Nike lawyer a settlement of a few million dollars would not "move the needle" for him.

"The defendant had his own agenda, an agenda he never bothered to mention to his client," Podolsky said. "That's what this case is about, a betrayal of trust and a shakedown."

Lawyers for Avenatti countered that Franklin had "authorized" him to demand a probe.

Attorney Michael Avenatti exits the United States Courthouse in the Manhattan borough of New York City, U.S., October 8, 2019. REUTERS/Brendan McDermid/File Photo

One of the lawyers, Scott Srebnick, said emails and text messages between Franklin and his adviser Jeffrey Auerbach show they were uninterested in "diplomacy," and hired the brash, aggressive, tenacious, "bullish" and hard-charging Avenatti to root out Nike's alleged corruption.

Srebnick's brother Howard Srebnick told jurors that Avenatti "went in there, in the words of Nike itself, to 'just do it' for his client."

Franklin and Auerbach testified for the prosecution. Jury deliberations in the two-week trial could begin on Wednesday.

Avenatti also faces scheduled trials this spring in Manhattan for allegedly defrauding Daniels out of proceeds from a book contract, and in California for allegedly defrauding several other clients.

He chose not to testify in the Nike case, after U.S. District Judge Paul Gardephe said prosecutors could question him about his behavior toward Daniels and other clients, without mentioning the criminal charges.

(Reporting by Jonathan Stempel in New York; Editing by Tom Brown and David Gregorio)

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