Nobody would ever describe Michael Avenatti as circumspect. But this month, the outspoken lawyer, Donald Trump adversary, and media enthusiast appears to have achieved historic levels of recklessness, culminating in the FBI arresting him Monday morning in the lavish Manhattan offices of the power firm Boies Schiller Flexner LLP. In a dramatic reversal of fortune, the man who made the president of the United States and his fixer abandon enforcement of a sordid hush-money agreement found himself charged with serious federal crimes in both New York and Los Angeles. True to form, he seems to have talked his way there, and is trying to talk his way out again.
Avenatti—who recently sneered at Michael Cohen’s lawyer for “representing a felon”—has only been charged with crimes, not convicted. Though he habitually makes flamboyant accusations of criminality, he’s entitled to the presumption of innocence. But nobody who has followed his antics can ignore how very on brand the accusations are.
The United States attorney for the Southern District of New York charged Avenatti Monday with a conspiracy to commit extortion against the athletic behemoth Nike. The affidavit in support of the complaint describes Avenatti approaching Nike’s attorneys at Boies Schiller and threatening to hold a press conference accusing Nike of illegal payments to high-school athletes on the eve of Nike’s quarterly earnings call. Avenatti, the feds allege, threatened that he would orchestrate publicity to take billions off of Nike’s stock value unless it paid his client—a coach who previously had a contract with Nike—$1.5 million. He also allegedly demanded that Nike hire him and a confederate to conduct an “internal investigation” at a cost of $15 million to $25 million.
Prudent people don’t try to extort gigantic corporations or their well-connected lawyers. According to the affidavit, the Boies Schiller lawyers, very predictably, contacted the FBI, which promptly arranged to record further interactions with Avenatti. Those recordings were crucial to the case against Avenatti for two reasons. First, without recordings, it would be the Boies Schiller lawyers’ word against Avenatti’s about what he said. Lawyers are nobody’s favorite witnesses. Second, and more important, the line between legal-settlement demands and criminal extortion can be fuzzy. Could the Boies Schiller lawyers, with the help of the FBI, provoke Avenatti into articulating extortionate threats as unmistakably as possible, and cross far past that line? Judging from the affidavit, they could.
Federal law prohibits threatening to injure the property or reputation of another person unless that person pays. But lawyers routinely tell their adversaries that failure to settle will lead to ruinous publicity. What’s the difference? Under federal law, a demand for money coupled with a threat of bad press is not extortion so long as there is some connection to a legitimate claim. In other words, you can threaten to expose a CEO for sexually harassing your client unless he settles her claim, because there’s a nexus between your demand and your client’s legitimate claim. But you can’t call the CEO and threaten to reveal his extramarital affair unless he pays. (In that latter situation, you’re only on legitimate ground if you represent a client who, for some reason, has a right to be compensated for that affair.) The United States Court of Appeals for the Second Circuit—which oversees federal courts in Manhattan, where Avenatti is charged—articulated that rule 20 years ago, when a woman attempted to extort $40 million from Bill Cosby by threatening to sell the story that she was his illegitimate daughter.
Avenatti’s initial demands to Nike were not recorded and were apparently somewhat ambiguous; it might have been difficult to prove that they had no connection to a legitimate claim. So it seems as if the FBI and Nike’s lawyers got Avenatti to do what he likes to do most: talk. According to the affidavit, they asked him to explain his position, which he did, extensively and profanely. They asked him whether he would still be demanding $15 million to $25 million for his silence if they agreed to pay his client $1.5 million. At this point, a cautious lawyer—or at least one acquainted with extortion—would have sensed a trap and backed out. But character is destiny, and Avenatti is a bloviator. In a speech peppered with f-bombs and feckless bravado, Avenatti allegedly explained that he would take his accusations public unless Nike not only settled his client’s possibly legitimate claim, but also paid him and his confederate tens of millions of dollars. At no point, according to the affidavit, did he articulate any plausible claim of right to that money. Avenatti thus seems to have talked himself from a marginal extortion case to a very strong one.
This is not the era of sensible federal criminal defendants, and Avenatti is no exception. Since his arrest, he has been furiously tweeting and speaking. He’s denounced Nike, accused it of the crimes he threatened to publicize, and proclaimed his innocence. No defense attorney would recommend such a display: It’s almost certain to make it easier for the government to prove its case. But it’s unlikely that any lawyer could restrain Avenatti from being Avenatti.
Avenatti next faces an initial court appearance in California, where he’s charged with bank fraud and wire fraud. Federal prosecutors allege that he sent fake tax returns to a bank to support a loan application for his struggling coffee company, and that he misappropriated a client’s $1.6 million in settlement money. This case is at least as grave as the one out of New York. The IRS is the investigating agency, boding potential tax charges down the road, and misappropriating client funds is one of the acts most likely to get a lawyer disbarred. If he follows his routine, Avenatti will soon begin making public pronouncements about this case that will delight the prosecutors.
Michael Avenatti feels things fiercely and speaks them forcefully. Earlier this month, he called me at work to blast me for writing unflattering things about him. I’m not so special; he occasionally yells at journalists, media personalities, and lawyers, who then share their experiences on social media. He spent most of the rather surreal call swearing at me and decrying me as a loser and a nobody who would never achieve what he has. This is arguable. Though my mouth gets me in trouble on a regular basis, it has not, as of this date, gotten me charged with federal crimes on both coasts.
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