Celebrity lawyer Michael Avenatti is found guilty in Nike extortion case

[February 15, 2020]  By Jonathan Stempel

NEW YORK (Reuters) - A U.S. jury on Friday found Michael Avenatti guilty in a criminal trial accusing the celebrity lawyer of trying to extort Nike Inc out of millions of dollars and defraud a youth basketball coach he represented.

Jurors in Manhattan federal court needed 2-1/2 days to decide the fate of Avenatti, a brash lawyer all but unknown until two years ago when he began representing adult film actress Stormy Daniels in lawsuits against U.S. President Donald Trump and making hundreds of television appearances.

Avenatti, 48, who positioned his chair so he could face the jurors during his 2-1/2-week trial, stared at them as the verdict was read. He could get more than 40 years in prison at his scheduled June 17 sentencing.

"Of course there will be an appeal, yes," Avenatti's lawyer Scott Srebnick told reporters after the verdict.

Avenatti also faces scheduled criminal trials this spring in Manhattan on charges he defrauded Daniels out of proceeds from a book contract, and in California on charges he defrauded several other clients and lied to the Internal Revenue Service.

He has been jailed in Manhattan since Jan. 17 after California prosecutors said he violated his bail conditions.

Avenatti shook hands with and got a pat on the back from members of his legal team following Friday's verdict, before a court officer led him away.

The defendant was convicted of trying to shake down Nike by threatening to hold a press conference to discuss allegations the sports apparel company made illegal payments to families of college basketball recruits.

Prosecutors said Avenatti told Nike he could wipe billions of dollars off its market value, but would keep quiet if it paid him and another lawyer up to $25 million to conduct an internal probe, and paid the coach Gary Franklin $1.5 million.

Attorney Michael Avenatti arrives at United States Court in the Manhattan borough of New York City, New York, U.S., July 23, 2019. REUTERS/Mike Segar

Avenatti was also convicted of defrauding Franklin by not telling him he was demanding a probe before agreeing to settle.

Prosecutors said Avenatti wanted a big payday to cover at least $11 million of his own debts.

Avenatti's trial included multiple recordings of his negotiations with Nike's lawyers. Franklin testified for prosecutors that he did not want a probe or press conference.

"The jury clearly saw the defendant's scheme for what it was - an old fashioned shakedown," U.S. Attorney Geoffrey Berman said in a statement.

Nike has denied wrongdoing.

Lawyers for Avenatti argued their client had acted in good faith and did exactly what Franklin wanted.

Avenatti did not testify, after his trial judge said prosecutors could question him about his dealings with other clients, without mentioning the criminal charges.

(Reporting by Jonathan Stempel; Additional reporting by Brendan Pierson; Editing by Noeleen Walder, Editing by Franklin Paul and Tom Brown)

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