Michael Avenatti Guilty on All Counts in Nike Extortion Case

Michael Avenatti was convicted Friday of extorting Nike, and of defrauding his client in a bid to reap millions from the sneaker giantan extraordinary fall from grace for the brash lawyer who shot to fame representing porn star Stormy Daniels in a civil case against President Donald Trump.

There was no trace of Avenattis trademark cockiness as he stared straight ahead at the jury box in Manhattan Federal Court, seeming to steel himself for bad news as the verdict was read.

The jury found Avenatti guilty on all three counts: extortion, wire fraud, and transmission of interstate communications with intent to extort. He faces more than 25 years in prison when hes sentenced June 17.

His attorney, Howard Srebnick, patted his back as he learned his fate. Geoffrey Berman, the U.S. Attorney for the Southern District of New York, watched from the spectators gallery in a sign of the cases high profile.

After the judge and jury left the courtoom, Avenatti sat flanked by his team of lawyers. He hugged Srebnick, then shook hands with his other attorneys and said, Great job, before disappearing into a back room to wait for the return to his jail cell. His lawyers said he would appeal.

Avenatti still faces two other pending criminal cases in New York and California, in which hes charged with stealing money from several of his clientsincluding Daniels, who claims he swiped $300,000 from her book advance.

Since the fall of 2018, Avenattis string of criminal cases and headline-grabbing arrests have sullied his reputation as a liberal hero with the chops to take on Trump.

During closing arguments on Tuesday, prosecutors played audio recordings of Avenattis conversations with a Nike lawyer on which he said it didnt make sense for Nike to pay his client an exorbitant sum of money in light of his role in this.

Assistant U.S. Attorney Matthew Podolsky said Avenatti wanted a way out of his $11 million in debts, and that he saw a meal ticket named Gary Franklin.

This is about a good old-fashioned shakedown. The defendant may have come in in a suit, may have used legal terms but what he did was extortion, Podolsky told the jury. The prosecutor said Avenatti was sending a message to Nike: Hire me, or else.

Federal prosecutors argued Avenatti had betrayed his client, amateur basketball coach Gary Franklin, when he attempted to shake down Nike for $15 million to $25 million during a series of meetings and phone calls in March 2019.

Avenatti tried to extort the sports corporation with intel from Franklin, who told him Nike executives made illegal payments to the families of high-school basketball stars on Franklins team, California Supreme in Los Angeles.

Using his sizable following on TV and Twitter as ammunition, Avenatti threatened to go public about these alleged payments and wreck Nikes reputation and profits ahead of a company earnings call and the NCAA mens basketball tournament. But he offered to keep quiet about the alleged scandal in return for $1.5 million for Franklin, and a $25-million payday for himself to conduct an internal investigation for the corporation.

Im not fucking around with this, and Im not continuing to play games, Avenatti said in call with a Nike lawyer which was recorded by law enforcement, adding, A few million dollars doesn't move the needle for me. These words made up an audio clip played by the prosecution more than once during summations on Tuesday.

Prosecutors argued Avenatti broke the legal code of ethics by failing to inform Franklin of what he was doing. Podolsky referenced a text message that Franklins friend, a consultant named Jeffrey Auerbach, sent to Avenatti after the lawyer tweeted about holding a press conference on Nikes alleged corruption.

Michael, very upsetting to say the least. Please call me before going public in any way, Auerbach wrote. Gary and I would like to discuss strategy with you.

But defense attorney Howard Srebnick said Avenattis chest pounding in meetings with Nike was for Franklins benefit. A lawyer can tell his adversary: If we dont settle claims, the matter will become public, Srebnick told jurors.

Everyone knew Michael Avenatti had the platform to expose Franklins claims. Simply going in there and saying, Mother, may I? wasnt going to do it. Srebnick said, adding that Nothing was going to be concealed from Mr. Franklin. Nothing.

Franklin enlisted Avenatti to expose Nikes corruption after Nike declined to renew its $72,000 annual sponsorship of Franklins basketball program. Avenattis hard-charging tactics, the defense argued, didnt amount to a crime.

Defense lawyer Scott Srebnick, who split the summations with his brother Howard, argued that texts between Franklin and Auerbach showed they authorized Avenatti to be aggressive with the shoe giant. I say we let his first round of discussions play out his way, Auerbach texted Franklin.

In a rebuttal, assistant U.S. prosecutor Daniel Richenthal fumed, You cant lie and conceal facts from your client and then say, I would have told him later.

He threatened a public company to line his pockets, Richenthal said.

Avenatti declined to testify in his defense after U.S. District Judge Paul Gardephe ruled he'd permit questions on past clients' accusations of lies and deceit. Without any witnesses, the defense's case was brief. Attorney Danya Perry presented evidence of items pulled from Avenatti's briefcase after his arrest, including an article on Adidas' illicit payments to youth players. She also highlighted texts between Avenatti and Auerbach, who wrote, Michael, thank you, thank you Go get em!

"No worries," Avenatti replied in part. "We need to take care of Gary."

The first witness in the roughly two-week trial was Scott Wilson, a former member of Nikes outside counsel. Wilson said Avenatti threatened to hold a press conference and unleash a torrent of bad publicity on Nike if the company didnt pony up $25 million to conduct an internal probe into its alleged payments to youth players. I wanted him to feel like there was a possibility so he wouldnt pull the trigger, Wilson testified of how he pretended to cave to Avenattis demands.

I wanted to not spook Mr. Avenatti. At no point did I intend to make a payment, Wilson added. He phoned the U.S. Attorneys Office in Manhattan soon after his initial huddle with Avenatti and celebrity lawyer Mark Geragos, whod set up the meeting and has not been charged in the extortion case.

Wilson warned Avenatti that his accusations, if made public, could ruin the careers of the young players on Franklins team. According to Wilsons testimony, Avenatti replied, I dont give a fuck about these kids.

The FBI recorded Wilsons next meeting with Avenatti two days later, and Avenatti claimed hed walk away for $22.5 million. Wilson testified that I thought this was a crazy thing to be saying to me and We were in the Twilight Zone. (Wilson did concede during testimony that the Securities and Exchange Commission has been investigating Nikes allegedly corrupt payouts to players.)

Meanwhile, Auerbach, an entertainment industry executive and friend of Franklin, testified that he suggested the coach contact Avenatti, because of his reputation as a tough negotiator in the Daniels legal drama.

Auerbach, who was part of the conversations with Avenatti and Franklin, told jurors that Avenatti was never authorized to threaten Nike with a media frenzyor to demand a hefty payout for himself. He called Avenattis scheme really damaging, counter-intuitive, and detrimental to Gary's goals, and added, You just don't threaten people you are forging and trying to establish a relationship with.

The entertainment executive said he was shocked when Avenatti posted a cryptic status on Twitter with a link to a college basketball corruption trial involving Nikes competitor Adidas, followed by a tweet with his plans to disclose a major high school/college basketball scandal perpetrated by @Nike.

When Franklin took the stand, he said he wanted Avenatti to negotiate with Nike to reinstate his teams annual sponsorship, secure a $1-million settlement for his program and alert Nike to the rogue executives who were making illegal payments. Franklin testified he never wanted to go public or have any press conference at all, because of the damage it would cause to his young players, their families, and his team.

I trusted him as my lawyer. This is not how I wanted things handled, Franklin said.

Avenattis longtime office manager, Judy Regnier, testified that his firm had been evicted from its $50,000-a-month office space in Newport Beach, causing her and other employees to work from their homes in March 2019. Around the time he was meeting with Nike, Avenatti told Regnier he was hatching a plan to clear the debt and start a new firm.

Avenatti seemed to see the light at the end of the tunnel, Regnier recalled in court, adding that the lawyer told her he would be able to live his life as he wanted to live it.