A federal jury in New York on Friday convicted disgraced attorney Michael Avenatti of attempting to extort as much as $25 million from Nike over threats that he would expose misdeeds in the apparel company's grassroots basketball division.
Avenatti, who rose to fame two years ago by representing adult film actress Stormy Daniels in her lawsuit against President Donald Trump, was convicted on felony charges of transmission of interstate communications with intent to extort, attempted extortion and honest services wire fraud.
U.S. District Court Judge Paul G. Gardephe will sentence Avenatti on June 17. The convictions for attempted extortion and honest services fraud carry a combined potential penalty of 42 years in prison.
"Today a unanimous jury found Michael Avenatti guilty of misusing his client's information in an effort to extort tens of millions of dollars from the athletic apparel company Nike," U.S. Attorney Geoffrey Berman said in a statement. "While the defendant may have tried to hide behind legal terms and a suit and tie, the jury clearly saw the defendant's scheme for what it was -- an old-fashioned shakedown."
Avenatti's attorney, Scott Srebnick, indicated that he would appeal the verdict. Avenatti did not testify during the three-week trial.
Avenatti's attorneys argued during the trial that he was seeking the money from Nike to compensate his client, former grassroots basketball coach Gary Franklin, and for Avenatti to conduct an internal investigation of Nike's conduct with amateur athletes.
Federal prosecutors told the jury that Avenatti, 48, tried to shake down Nike because he was more than $11 million in debt.
Last week, Franklin testified that Nike employees Carlton DeBose and Jamal James directed him to make payments of tens of thousands of dollars to the parents and handlers of at least three high-profile recruits and then submit fraudulent invoices to the company for reimbursement.
Franklin, who founded California Supreme and coached its under-17 elite team in Nike's Elite Youth Basketball League, told the jury that he facilitated payments to Phoenix Suns center Deandre Ayton's mother as well as to the handlers, coaches and trainers of Denver Nuggets center Bol Bol and former UNLV player Brandon McCoy when they were still amateurs.
Franklin testified that in June 2016 he helped facilitate payments of $30,000 to Melvin McDonald, a California-based trainer who worked with Ayton and Bol; $15,000 to Shaun Manning, who was McCoy's handler; and $15,000 to Ayton's mother, Andrea.
He also testified that he flew from Los Angeles to Phoenix to deliver $10,000 more in cash to Andrea Ayton.
Franklin told the jury that DeBose then instructed him to submit a false invoice to Nike for $60,000 and specify that the money was going to be used to pay for a California Supreme back-to-school event and travel expenses for his program's 15- and 16-year-old team.
Two Nike attorneys testified during the trial that the sneaker company had received a federal grand jury subpoena from the U.S. Department of Justice and two other subpoenas from the U.S. Securities and Exchange Commission related to corruption in grassroots basketball.
Avenatti faces two other federal criminal cases in which the federal government has charged him with stealing Daniels' $300,000 book advance and swindling millions of dollars from other clients.