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Jury selection begins in Michael Avenatti's trial for allegedly trying to extort millions from Nike

Updated 5:16 PM ET, Mon January 27, 2020

New York (CNN) - Jury selection in Michael Avenatti's federal extortion trial began in New York on Monday as prosecutors are set to argue he tried to shake down athletic apparel giant Nike for millions of dollars.

Avenatti, best known for representing Stormy Daniels in her lawsuit against President Trump, is on trial for allegedly threatening to publicly accuse Nike employees of improper and illegal conduct unless the company paid his client $1.5 million and agreed to pay $15 to $25 million for an "internal investigation" of the allegations.

Avenatti remains in custody in Manhattan since being arrested earlier this month in California for alleged violations of his pretrial conditions in a separate case there. He appeared in court wearing a blue dress shirt, tie, dark suit and dress shoes.

His lawyers noted he has spent 14 days in a cell by himself since being arrested. They say he has no newspapers or TV, no social interaction besides his attorneys and limited phone calls with family. The defense said the conditions were the same as terrorists and were de facto punitive. The judge noted that the conditions were in place to protect himself from other prisoners.

Monday's hearing focused on the beginning of jury selection as well as several pretrial motions and other issues.

Mark Geragos, a prominent defense attorney who was an unnamed co-conspirator in the criminal complaint, has taken the 5th amendment and will not testify in this trial. The defense said they will argue that since Geragos, who was an experienced criminal lawyer, was with Avenatti through the process, he had reason to believe that they were acting properly.

Avenatti accused of trying to extort Nike

In March 2019, a coach at an amateur basketball program Nike was no longer planning to sponsor, contacted Avenatti and said he had evidence the company illicitly paid the families of top high school basketball players.

Avenatti threatened to make the allegations public, hurting Nike's financial value and reputation, prosecutors claim.

"I'll go take $10 billion off your client's market cap," Avenatti is quoted as threatening in a recorded telephone conversation. "I'm not (expletive) around with this thing anymore."

In exchange for not going public Nike would have to pay the coach $1.5 million for any claims related to no longer sponsoring his team, immediately pay $12 million and guarantee $15 to $25 million in total payments for the internal investigation.

When one of Nike's lawyers said that he had never received payments like that Avenatti asked if he had ever "held the balls of the client in your hand where you could take five to six billion dollars market cap off of them," according to court documents.

"They are going to incur cut after cut after cut, and that's what's going to happen as soon as this thing becomes public," Avenatti allegedly threatened.

"Nike will not respond to the allegations of an individual facing federal charges of fraud and extortion," the company said in a statement. "Nike will continue its cooperation with the government's investigation into grassroots basketball and the related extortion case."

Avenatti vehemently denies the charges against him.

While this trial is not about politics, lawyers will be able to mention President Trump and Avenatti's former client Stormy Daniels.

"It is absolutely central to why Mr. Avenatti had the power to threaten Nike," US District Judge Paul Gardephe said in a pretrial hearing. "I can't pretend there is an immaculate conception here that Mr. Avenatti become so prominent magically."

Prosecutors argued mentioning Daniels or Trump would inject politics into a case that had nothing to do with it, arguing lawyers and witnesses should only to be allowed to say Avenatti was prominent but not explain why.

In what could be a preview of the defense case, lawyers displayed text messages they say show Franklin, the client, actually did want what amounted to an internal investigation of Nike and Avenatti had reason to believe the company's current law firm would not conduct it fairly.

But prosecutors say the evidence they will present shows Avenatti was in deep debt and was trying to shake down the athletic apparel giant for his own gain.

Judge Gardephe expects that at least some of the jurors will know about Avenatti and his representation of Daniels but that will not automatically disqualify them so long as they can put their opinions aside and be impartial.

The trial is expected to last more than two weeks.


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