Lawyer Michael Avenatti was arrested Monday in New York City for allegedly trying to extort up to $25 million from Nike (NYSE: NKE) by threatening to reveal claims that company employees authorized payments to the families of top high school basketball players.
Avenatti, who has represented porn star Stormy Daniels in her lawsuit against U.S. President Donald Trump, was also separately charged in a second federal case in Los Angeles with embezzling a client's money "in order to pay his own expenses and debts" and those of his law firm and coffee company, and of "defrauding a bank in Mississippi," prosecutors said.
The litigator gained represented Daniels -- whose real name is Stephanie Clifford -- in a case related to a nondisclosure agreement she signed on the eve of the 2016 presidential election to keep quiet about her alleged affair with Trump in exchange for a $130,000 payment. Last year, Avenatti announced that he was considering running for president.
Daniels replaced Avenatti as her lawyer earlier this month after a falling out with him.
Daniels, in a statement released by her new lawyer Clark Brewster, told media outlets that, "Knowing what I know now about Michael, I'm saddened but not shocked regarding his arrest."
The 48-year-old Avenatti, was arrested in Midtown Manhattan by FBI agents, about 15 minutes after he tweeted that he would be disclosing a big high school and college basketball scandal "perpetrated by" Nike that he supposedly had uncovered.
