November 14, 2019 / 1:14 AM / a month ago

Michael Avenatti faces new fraud charge in Nike extortion case

FILE PHOTO: Attorney Michael Avenatti exits the United States Courthouse in the Manhattan borough of New York City, U.S., October 8, 2019. REUTERS/Brendan McDermid

NEW YORK (Reuters) - Federal prosecutors on Wednesday unveiled a new fraud charge against lawyer Michael Avenatti, accusing him of lying to a client as part of his alleged effort to extort Nike Inc (NKE.N).

The prosecutors also dropped two counts of conspiracy against Avenatti from the case, which was first made public in March, according to a superseding indictment filed in federal court in Manhattan.

“I am extremely pleased that the two counts alleging I engaged in a conspiracy against Nike have just been dismissed by Trump’s DOJ,” Avenatti wrote on Twitter, referring to the U.S. Department of Justice under President Donald Trump. “I expect to be fully exonerated when it is all said and done.”

“It is obvious the government’s case is falling apart, it should never have been filed,” Avenatti added in a message to Reuters.

Avenatti, 48, became famous for representing porn star Stormy Daniels, whose real name is Stephanie Clifford, in lawsuits involving Trump and his former personal lawyer Michael Cohen. He also faces federal charges in Manhattan of stealing about $300,000 from Daniels after helping her secure a book contract.

Prosecutors had previously charged Avenatti with extortion, accusing him of threatening to publicize a claim by one of his clients, a basketball club coach, that Nike arranged for payments to elite college basketball recruits. Avenatti demanded that the athletic wear company pay the coach $1.5 million and pay himself more than $20 million, prosecutors said.

The new indictment adds a claim that Avenatti defrauded the coach. Prosecutors said Avenatti concealed the fact that Nike agreed to pay the coach to settle the case as long as it did not have to pay Avenatti, and instead continued trying to use the case for his own benefit.

Federal prosecutors in Southern California have separately charged Avenatti with wire fraud, bank fraud and other crimes, saying he stole millions of dollars from clients.

Avenatti has pleaded not guilty to all the charges against him.

Reporting by Brendan Pierson in New York; Editing by Richard Chang and Bernadette Baum

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