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Nike In-House Lawyer Met With Avenatti Over Alleged Extortion Demands—Then Notified Law Enforcement

Michael Avenatti (Photo by David Handschuh/NYLJ)

Michael Avenatti (Photo by David Handschuh/NYLJ)

Attorney Michael Avenatti is being charged with four extortion-related counts in the Southern District of New York over alleged attempts to blackmail Nike Inc. for millions in meetings with the company's inside and outside counsel.

In a complaint released Monday, Federal Bureau of Investigation special agent Christopher Harper claimed Avenatti met with an in-house Nike lawyer and two outside counsel representatives on March 19. He allegedly told the lawyers a client he represented knew of concealed Nike payments to top-performing high school athletes.

Avenatti made a series of threats to go public with the information and harm Nike's reputation, eventually asking for more than $20 million to stay silent. But Nike didn't agree to the alleged extortion attempts. Instead, it contacted the U.S. Attorney's Office for the Southern District of New York and began passing along incriminating texts and phone recordings.

"Nike will not be extorted or hide information that is relevant to a government investigation. Nike has been cooperating with the government’s investigation into NCAA basketball for over a year," a company representative said in an email Monday. "When Nike became aware of this matter, Nike immediately reported it to federal prosecutors. When Mr. Avenatti attempted to extort Nike over this matter, Nike with the assistance of outside counsel at Boies Schiller Flexner, aided the investigation."

The representative added Nike "believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors."

David Lewis, a legal ethics lawyer at David Lewis Law in New York, said in-house counsel should consider reporting obligations and what's best for the company when faced with a situation such as Nike's. Before approaching law enforcement, in-house and outside counsel should consult with other company leaders.

"It appears that here it was clear that Nike felt they were the victim of a crime and so it would seem to be extremely prudent to take the actions that they took," Lewis said. 

He and Max Kennerly, a founding attorney at Kennerly Loutey, said it's common for in-house counsel to receive letters from plaintiffs lawyers seeking payment for clients. In the vast majority of cases, Kennerly said that's not extortion.

But the lawyers said Avenatti's alleged requests for his own, separate multimillion-dollar payment and his demand for a role as Nike's internal investigator raised extortion concerns.

"The big red flag here is … there's a negotiation going on here with a threat that has nothing to do with the plaintiff," Kennerly said. "I hope this isn't misread as, 'If I get a demand I don't like, I will take this to prosecutors.'"

Read the full SDNY complaint here:



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