Michael Avenatti: why Stormy Daniels’s lawyer was arrested

Michael Avenatti, the American lawyer who represented adult film actress Stormy Daniels in her case against President Trump, has been arrested on fraud charges.

Avenatti appeared in a New York court in Monday. He was released on $300,000 (£227,000) bail on condition that he surrender his US and Italian passports, reports the BBC.

Outside court, the high-profile lawyer said he was confident he would be “fully exonerated”. He told reporters he had spent his career fighting powerful people and powerful corporations, and that he would “never stop fighting that good fight”.

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Earlier in the day of his arrest, Avenatti announced on Twitter that he would reveal a major scandal involving the sportswear giant Nike at a press conference on Tuesday. “This criminal conduct reaches the highest levels of Nike and involves some of the biggest names in college basketball,” he tweeted.

An hour after the tweet, the 48-year-old – a prominent critic of President Donald Trump – was arrested.

According to federal prosecutors in New York, Avenatti and a California lawyer - identified by The Wall Street Journal as celebrity lawyer Mark Geragos – met a lawyer for Nike earlier this month. During their meeting, Avenatti allegedly threatened to release damaging information about the company unless it paid the two lawyers between $15m (£11.4m) and $25m (£19m).

Prosecutors say that Avenatti and the other lawyer were representing a coach in California, “who ran an amateur basketball program that Nike sponsored”, according to Quartz. But after Nike decided not to renew the sponsorship deal Avenatti told the company that the coach had evidence that one or more Nike employees had been involved in funding illegal payments to the families of top high-school basketball players and trying to cover them up.

According to the criminal complaint, Avenatti threatened to hold a press conference revealing all the information unless Nike agreed to pay the coach he represented $1.5m (£1.13m) as well as paying him and Geragos.

Federal prosecutors allege Avenatti said: “I’ll go take $10 billion dollars (£7.56bn) off your client’s market cap. I’m not fucking around”, on a 20 March call with Nike’s lawyers.

“As alleged, Avenatti used illegal and extortionate threats for the purpose of obtaining millions of dollars in payments from a public company,” Geoffrey S. Berman, the US Attorney for the Southern District of New York, said in a statement.

“Calling this anticipated payout a retainer or a settlement doesn’t change what it was – a shakedown. When lawyers use their law licenses as weapons, as a guise to extort payments for themselves, they are no longer acting as attorneys. They are acting as criminals and they will [be] held responsible for their conduct,” he added.

Reacting to the news, Stormy Daniels said in a tweet that she had terminated Avenatti’s contract “more than a month ago... after discovering that he had dealt with me extremely dishonestly”.

“Knowing what I know now about Michael, I'm saddened but not shocked regarding his arrest.”