Attorney Michael Avenatti was $15 million in debt when he tried to extort $25 million from Nike, The Associated Press reports.
Federal prosecutors told a New York federal court that Avenatti’s debt was “conservatively, in excess of $15 million.” The money was owed to former clients, partners, former spouses, and others, prosecutors said.
The filing came after Avenatti was accused by prosecutors of trying to extort Nike into paying him between $15 million and $20 million to conduct an internal investigation of the company after threatening to release documents alleging that Nike illegally paid amateur players.
Avenatti has denied the charges and that he was in debt.
“Avenatti’s lawyers say the money he legally requested to conduct an internal probe of the sportswear giant was a bargain,” The AP reported.
Avenatti disputes prosecutors:
“Any claim that I was $15 million in debt is ridiculous, absurd and laughable,” Avenatti told the AP. “I look forward to the upcoming trial at which time I will be exonerated and the truth will be known.”
His lawyers argued in a court filing that he offered Nike a good deal on an internal probe after the company’s lawyers expressed interest in an investigation.
“Avenatti’s lawyers said thousands of pages of documents submitted to federal prosecutors by Nike in response to a 2017 grand jury subpoena revealed that payments by Nike for the benefit of amateur players ‘were pervasive,’ including payments to high school players through at least 10 different coaches for a Nike-sponsored youth basketball league,” The AP reported.
The attorneys cited a New York Times report that noted that internal investigations can cost companies over $100 million.
Prosecutors say debt shows motive:
Prosecutors said in their filing that the evidence shows “that he had extraordinary indebtedness, and thus the need and motive to quickly generate substantial sums of money at the time when he engaged in the charged conduct.”
Avenatti faces an avalanche of other criminal charges and lawsuits.
“Criminal charges against him in other cases include allegations in New York that he defrauded ex-client porn star Stormy Daniels out of proceeds of a book deal and charges in Los Angeles that he defrauded clients of millions of dollars,” The AP reported. He has denied all charges.