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Michael Avenatti 'saw dollar signs' when a client approached him with Nike allegations, prosecutor says

Updated 2:29 AM ET, Thu January 30, 2020

(CNN) - Michael Avenatti saw a youth basketball coach merely as an opportunity to make millions of dollars and tried to "shake down" Nike, prosecutors said during opening statements at his federal trial on Wednesday.

"When the defendant looked at the coach he didn't see a client to help, he saw dollar signs," said Assistant US Attorney Robert Sobelman.

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 him up to $25 million.

Prosecutors said in court that Gary Franklin, coach of youth basketball team California Supreme, asked Avenatti for help last year after Nike did not renew his team's sponsorship deal after the company had him make illicit payments to the families of top high school basketball players.

Avenatti's attorneys deny there was any attempt of fraud and said Franklin hired "Avenatti to be Avenatti."

"Now it's true that Mr. Avenatti is brash. He's aggressive... sometimes he's offensive. But that's not what we put people in prison for," defense attorney Howard Srebnick told jurors.

Prosecutors: 'This is a case about a shake down'

Avenatti threatened to make the allegations against Nike public, hurting the company's financial value and reputation, unless they agreed to pay his client $1.5 million and agreed to pay him up to $25 million for an "internal investigation" of the allegations, Sobelman said.

When he approached Nike, he told them they had to hire him and Mark Geragos, a prominent defense attorney, for the investigation. The company would pay them $12 million right away, and $25 million if "they actually did some work," Sobelman said.

If Nike hired another firm they would have to pay the two lawyers double what the other firm charged, the prosecutor added.

"This is a case about a shake down," Sobelman told jurors in his opening statement. "Michael Avenatti sold out his client and then threatened to harm a major company, all to line his own pocket."

Sobelman said Avenatti did not share his plans with Franklin who mostly wanted Nike to renew his team's sponsorship and didn't want some materials made public.

But Avenatti was actually acting on his client's wishes, Srebnick said. The defense said Franklin wanted a settlement and an investigation "so they could have justice."

Franklin's goals for Avenatti were to determine whether Nike's executives had gone rogue, or if the misconduct was the result of a company policy, if Nike tolerated workplace bulling, and if Nike youth basketball was guilty of a variety of illicit activity.

"This wasn't extortion, this wasn't fraud. That was litigation. That's exactly what it was," Srebnick said. "It was done in the spirit of getting the client what the client wanted."

Prosecutors said Avenatti tried to extort Nike because he "was deeply in debt" and "owed a ton of money."

Defense says Nike didn't want 'the truth coming out'

Avenatti had the platform to expose Nike because he was the highest profile lawyer of the time with 800,000 Twitter followers and numerous TV appearances, his attorneys said.

Nike's internal and external lawyers were on "red alert," Srebnick said, and wanted to setup Avenatti by asking for a specific dollar amount to settle during their third meeting.

"Their mission was to contain Mr. Avenatti," Srebnick said. "Nike was worried about the truth coming out."

Avenatti proposed a $22.5 million settlement, which Srebnick said, would have not bared Franklin from talking to government investigators and he would have had to sign off on.

Nike's outside attorney, Scott Wilson, testified Wednesday in court and described the meeting with Avenatti and Geragos.

"He (Avenatti) threatened to hold a press conference unless we paid him off," Wilson said.

Wilson said Avenatti threatened to "blow the lid off of this scandal" and had a reporter at the New York Times on speed dial.

"I understood he was threatening he would go to the press to generate negative media attention," said Wilson, adding he was very concerned about Avenatti's ability to attract media.

Wilson's testimony is set to continue Thursday.


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