Avenatti Nike Extortion Case to Proceed After Judge Denies Requests to Dismiss Charges

After a federal judge denied Michael Avenatti’s motion to dismiss criminal charges on Monday, the celebrity lawyer is set to go to trial this month for his alleged attempt to extort Nike Inc.

Avenatti is accused of attempting to extort more than $20 million from the Swoosh in exchange for not publicizing alleged illicit payments to student athletes. He currently faces three counts including intent to extort, violation of the Hobbs Act (which criminalizes extortion) and honest service wire fraud, the former two of which he requested be dismissed on grounds of “insufficiency and vagueness.”

In a memorandum Monday, U.S. District Judge Paul G. Gardephe denied Avenatti’s motion to dismiss both counts.

The Indictment adequately alleges that Avenatti engaged in “wrongful” conduct, because it pleads facts demonstrating that Avenatti used threats of economic and reputational harm to demand millions of dollars from Nike, for himself, to which he had no plausible claim of right,” Gardephe wrote. “While Avenatti’s client may have been in a position to make demands on Nike, Avenatti had no right — independent of his client — to demand millions of dollars from Nike (1) based on confidential information supplied by his client; (2) without his client’s knowledge; and (3) to his client’s detriment. Whether or not Avenatti engaged in such conduct is, of course, a question for the jury.”

Avenatti did not respond to FN’s request for comment, but on social media Monday following the judge’s ruling, he wrote that he expects to be “fully exonerated” when the case goes to trial.

“Once the actual evidence is presented in the Nike trial, I will be fully exonerated because I did absolutely nothing wrong,” Avenatti tweeted. He has pleaded not guilty on all counts.

In March, Avenatti was arrested minutes after he tweeted that he planned to reveal a basketball bribery scandal amid the annual March Madness tournament. He allegedly plotted to siphon millions of dollars from the Swoosh by threatening to disclose evidence of purported misconduct on the part of Nike executives, including illicit payments to student athletes, ahead of the company’s third-quarter report. Avenatti reportedly learned of Nike’s alleged misconduct through then-client Gary Franklin, a grassroots basketball coach who worked with Nike.

In a separate Monday filing, Gardephe denied requests to seal court documents pertaining to tapes of Franklin’s conversations with Nike executives, which Franklin purportedly made without the executives’ knowledge. Those tapes, Avenatti’s legal team alleged, demonstrate illicit activity on the part of the Nike employees. Avenatti’s team requested subpoenaing Franklin for audio recordings and transcripts of these conversations, but Gardephe denied this request Monday.

“The Court does not expect the validity or nature of Franklin’s claim against Nike to be a central issue at trial,” Gardephe explained, adding that “the critical issue will be whether the Government has proven beyond a reasonable doubt that Avenatti demanded $15 to $25 million for himself in exchange for not conducting a press conference at which Nike’s alleged misconduct would be revealed, and whether he did so without his client’s [Franklin] knowledge and consent.”

U.S. v. Avenatti is expected to proceed to trial on Jan. 21 in New York.

Nike did not respond to FN’s request for comment.

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