Judge rejects Michael Avenatti’s bid to dismiss criminal charge in Nike case

https://www.theguardian.com/us-news/2020/jan/09/michael-avenatti-nike-extortion-case-trial

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Lawyer faces 21 January trial over dealings with sportswear giant and two other criminal trials in the spring on unrelated charges

A US judge on Thursday rejected the celebrity lawyer Michael Avenatti’s bid to dismiss a criminal charge that he defrauded a client whom he said knew about improper payments that sportswear giant Nike allegedly made to families of college basketball recruits.

The US district judge Paul Gardephe in Manhattan ruled three days after refusing to dismiss two extortion charges accusing Avenatti of threatening to hold a news conference about the payments unless Nike paid him up to $25m.

Nike has denied wrongdoing.

Known for representing the pornographic film actor and producer Stormy Daniels, who alleges a past affair with Donald Trump, and himself sharply criticizing the US president, 48-year-old Avenatti faces a 21 January trial over his dealings with Nike, and two other criminal trials this spring on unrelated charges. He has pleaded not guilty to all charges.

Lawyers for Avenatti did not immediately respond to requests for comment.

A spokesman for the US attorney Geoffrey Berman in Manhattan declined to comment.

Prosecutors accused Avenatti of telling Nike last March he would not publicize his client Gary Franklin’s claims about the payments if the sportswear company would pay Franklin $1.5m, and him up to $25m to conduct an internal inquiry.

They said Avenatti also failed to tell Franklin, who coached a youth basketball team in a Nike-sponsored league, that Nike offered to settle the coach’s claims without paying Avenatti, and instead used those claims to secure riches for himself.

Prosecutors said this deprived Franklin of Avenatti’s “honest services” and constituted fraud.

Avenatti said the charge should have been thrown out because it did not mention a “bribe” or “kickback”, which he said was necessary under a 2010 supreme court case involving the former Enron chief executive Jeffrey Skilling.

Gardephe, however, said the absence of those words had no “talismanic significance”, and it was enough for the government to accuse Avenatti of violating a “known legal duty” to Franklin even if Nike never paid Avenatti.

“The indictment pleads facts sufficient to demonstrate that Avenatti violated the legally cognizable duties a lawyer owes to his client,” Gardephe wrote.

The fraud count and one extortion count carry maximum 20-year prison terms.

Avenatti also faces an 21 April trial in Manhattan for allegedly cheating Daniels out of proceeds from a book contract, and a 19 May trial in Santa Ana, California, for allegedly defrauding other clients and lying to the Internal Revenue Service.