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Michael Avenatti's Biggest Case Yet: His Own

Michael Avenatti's Biggest Case Yet: His Own
Michael Avenatti's Biggest Case Yet: His Own

It did not seem to matter that he was now facing criminal charges in what federal prosecutors in New York described as a scheme to extort millions of dollars from Nike, or that federal prosecutors in California had just filed unrelated charges that he had defrauded a former client and a bank.

Avenatti, the lawyer who represented pornographic film actress Stormy Daniels in her lawsuits against President Donald Trump, walked into a cellphone store last Monday night and used the landline to call a reporter for The New York Times, beginning a campaign to deny all allegations against him and defend himself in the court of public opinion.

“I’m the most well-known attorney in the United States right now, for better or worse,” he said Thursday in an interview. “And that’s been true for a long time now. For a year.”

It has been a long year. The man who many on the left predicted would take down Trump, who had become a fixture on cable news networks, orbited in celebrity circles and even flirted with a presidential run himself, could now face years in federal prison, a turnabout Trump’s camp noted with glee.

“It went from Avenatti 2020 to Avenatti 20-to-25,” Donald Trump Jr. said last week at a political rally for his father in Michigan.

On inspection, some of the same qualities that brought Avenatti fame now appear to be contributing to his potential fall.

Grasping for big wins, the brash lawyer often promised more than he delivered. And his cocksure public image masked disarray, now evident in a trail of civil disputes, bankruptcy filings and alleged financial crimes going back several years, according to court papers and interviews. Late last year, he was accused of domestic violence by a former girlfriend, though Los Angeles prosecutors have declined to file charges while leaving the case open.

Such troubles would drive many people underground. Yet Avenatti has never relented. He has kept pushing stories. Two weeks ago, he contacted reporters, including two from The Times, suggesting he had a story related to a sportswear company and promising it would be big.

It was. But it turned out to be about him.

It was only a year ago that Avenatti burst onto the scene, trumpeting on Twitter that a salacious case he had taken on could bring down the president.

As he battled on behalf of Daniels — who received hush money before the 2016 election to keep quiet about a sexual encounter she said she had with Trump — he raised his own profile in more than 300 television appearances and countless interviews, some with The Times. Everything about him became news, from his Tom Ford suits to his low body-fat percentage.

He regarded the media as a cudgel for his cases, maximizing exposure, inviting new evidence from would-be whistleblowers and sometimes inciting responses from the White House. As often as he provoked eye-rolling, his claims frequently flitted over airwaves and onto news sites with little scrutiny.

His client list followed the story of the moment: Here he was suddenly fighting for separated immigrant families along the southwestern border, then representing an accuser of Judge Brett M. Kavanaugh before he was confirmed to the Supreme Court. Avenatti later popped up in the R. Kelly sexual abuse investigation, representing multiple accusers and saying he submitted video evidence to state prosecutors in Chicago.

He bristled at the idea that he had emerged out of nowhere.

“I don’t feel like I get enough credit for my track record of success relating to cases,” Avenatti said, raising his voice with exasperation. “People act like I was a nobody before Stormy Daniels, and it’s ridiculous.”

As a plaintiff’s lawyer, Avenatti had won some big settlements. He sued KPMG for audit malpractice, and the company settled for $22 million. He won $80 million from a cemetery accused of overstuffing its plots, and half a billion from the makers of defective surgical gowns. Two of his cases before Daniels had landed him on “60 Minutes,” he pointed out.

But his law firm, which in recent years had eight to 10 lawyers, all of whom have now left, had also filed for bankruptcy. It did so again this past month, estimating liabilities of up to $50 million.

A former partner at Avenatti’s firm, Jason Frank, claimed in federal court this year that Avenatti had committed bankruptcy fraud in a previous filing, hiding millions of dollars from the government. Last fall, a California court ordered Avenatti to pay millions to Frank for work he had done for the firm. After Avenatti failed to produce the financial records required of him in that case this year, he gave up control of his firm, which is now in the hands of a court-appointed receiver.

The federal charging documents in California, unsealed last week as part of the criminal case against him, provided new details about past financial trouble. Avenatti had a checkered history with the Internal Revenue Service dating back years. In 2014, he submitted fake tax returns in loan applications to a Mississippi bank, prosecutors said, claiming to have paid the IRS millions of dollars in years when he had filed no returns at all. He owed the IRS more than $850,000 in unpaid personal income taxes at the time. Avenatti said Thursday that the bank loans had been repaid.

Even as criminal charges loom, Avenatti wants a little more credit for what he has done. He claimed his aggressive tactics had won the government its guilty plea from Michael D. Cohen, Trump’s former lawyer, who last year was convicted of campaign finance crimes connected to the hush money payment to Daniels.

“That would have been a two-day story were it not for me,” Avenatti said. “Look at the other scandals Trump has been involved in. Compare the amount of coverage.”

Avenatti was arrested last Monday afternoon in New York’s new Hudson Yards development, outside the offices of Nike’s law firm, Boies Schiller Flexner, with which he had talked repeatedly in preceding days. He was accused of trying to extort more than $15 million from the apparel giant, which had in turn contacted the authorities.

In earlier meetings, he had told Nike’s lawyers that he represented a youth basketball coach who once had a contract with the company, federal prosecutors in Manhattan said. Through the coach, Gary Franklin Sr., Avenatti said he had gathered information showing Nike had made payments to high school basketball players — an NCAA violation and, in certain circumstances, a possible fraud.

He then requested $1.5 million for Franklin, according to the complaint unsealed in New York last week. He also demanded that Nike hire him to conduct an internal investigation into its criminal exposure, for which he and another lawyer would receive a minimum $15 million to $25 million. Alternatively, according to the complaint, Avenatti demanded $22.5 million to buy his silence and resolve Franklin’s potential claims.

Franklin could not be reached for comment.

It is unclear if Avenatti possessed evidence directly tying Nike to any payments, and prosecutors and Nike both declined to comment.

“Avenatti was an idiot to think that he was going to make a company like Nike buckle,” said John Horan, the longtime publisher of Sporting Goods Intelligence, an industry newsletter.

Avenatti insisted that he simply wanted to clean up what he called corruption within Nike and conduct an internal inquiry to ensure things improved. “This was a complete hit job by Nike. It was designed to do damage to me and inoculate themselves,” he said by phone from California.

He had flown back to his home state, preparing to answer to the charges filed there.

For all the attention the Nike case is getting, the charges filed in California may be Avenatti’s bigger problem, said Peter Johnson, who teaches at the University of California, Los Angeles’ law school. The Nike allegations hinge on Avenatti’s intent — whether it was extortion or zealous advocacy — which is harder to determine. But the charges in California draw on a paper trail that could make it clearer to establish fraud.

“It’s about whether in fact he committed fraud on paper, and for the prosecution that’s an easier case to prove,” Johnson said.

As his star falls, some now question how he managed to stir so much enthusiasm in the first place.

David Karpf, a professor of media and public affairs at the George Washington University, viewed Avenatti as part of a larger phenomenon of “resistance grifters,” or people harnessing anti-Trump outrage for financial gain.

“People face this overwhelming flow of information, and they lack context and understanding,” Karpf said. “So anybody who can speak with a confident tone offering some explanation can find an audience.”

This article originally appeared in The New York Times.

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