Trump antagonist Avenatti's bail is revoked; unhappy NY judge delays Nike extortion trial

[January 16, 2020]  By Jonathan Stempel

NEW YORK (Reuters) - A federal judge on Wednesday revoked Michael Avenatti's bail after the celebrity lawyer and critic of U.S. President Donald Trump was accused of hiding money from creditors, triggering a delay in a separate trial where Avenatti is charged with trying to extort Nike Inc.

U.S. District Judge James Selna remanded Avenatti to federal custody at a hearing in Santa Ana, California, where prosecutors had charged him last March with stealing millions of dollars from clients, defrauding a bank and lying to the Internal Revenue Service and a bankruptcy court.

Prosecutors said Avenatti concealed $1 million he received last April, in a client settlement, from his second ex-wife and other creditors to whom he owed more than $11 million, spending some on a Mercedes-Benz.
 

Avenatti is awaiting trial on three federal indictments, and has pleaded not guilty on all charges.

In the Nike case, Avenatti was charged in Manhattan with threatening to publicly accuse the sportswear company of improperly paying families of college basketball recruits unless it paid him up to $25 million to conduct a probe plus $1.5 million to his client, a youth basketball coach.

U.S. District Judge Paul Gardephe, who oversees the Nike case, said Avenatti's arrest caused an "enormous disruption" requiring an adjournment of the Jan. 21 trial, which Avenatti will be allowed to attend. Gardephe said he would be "very reluctant" to delay it past Jan. 27.

Jose Quinon, a lawyer for Avenatti, sought a longer delay, saying that because the new accusations involved money his client controlled, they undermined Avenatti's ability even to pay for witnesses.

"The rug has been pulled from under us because this was absolutely, totally unexpected," Quinon said. "It's like going to war without weapons."

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

Gardephe urged both sides to work out their differences. "I'm asking that people be practical here, given the hand we have been dealt, which is a bad one," he said.

Avenatti became famous as a self-described Trump nemesis and for representing porn actress Stormy Daniels, who received hush money before the 2016 election not to reveal an alleged sexual encounter with Trump, which the president denies.

Earlier Wednesday, Gardephe refused to dismiss the Nike prosecution, which Avenatti called "vindictive" and payback for his animosity toward Trump.

The judge found no evidence of malice, and noted that it was Nike that alerted prosecutors to the alleged extortion.

"Avenatti is being prosecuted for activities wholly unrelated to the political arena," Gardephe wrote.

Before his Tuesday arrest, Avenatti faced a possible 335 years in prison in the California case.

He was also charged in Manhattan with stealing nearly $300,000 of Daniels' proceeds from her book contract.

(Reporting by Jonathan Stempel in New York; editing by Cynthia Osterman and Tom Brown)

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