Trump antagonist Avenatti's extortion trial in New York may be delayed after arrest

NEW YORK (Reuters) - Michael Avenatti's criminal trial for trying to extort Nike Inc <NKE.N> may be delayed following the celebrity lawyer's unexpected arrest late on Tuesday in California for allegedly violating his bail conditions in a separate criminal case.

Avenatti faces a Jan. 21 trial in Manhattan for threatening to publicize claims by his client, a youth basketball coach, that Nike improperly paid families of college basketball recruits, unless the sportswear company paid him up to $25 million to conduct a probe, plus $1.5 million to the coach.

But the arrest of Avenatti for allegedly scheming to conceal assets from creditors, subsequent to being charged in California with 36 criminal counts, including defrauding millions of dollars from clients, may necessitate a delay.

"The arrest of Mr. Avenatti this close to the trial has essentially thrown the trial into chaos," U.S. District Judge Paul Gardephe, who oversees the Nike case, said in a telephone conference.

Avenatti has pleaded not guilty to all criminal charges he faces.

He is expected to appear at a hearing later on Wednesday in a Santa Ana, California court, where prosecutors are expected to seek to revoke his bail. Gardephe plans another telephone conference after the hearing.

Matthew Podolsky, a prosecutor in the Nike case, said he would not oppose a one-week trial delay, and that Avenatti could be moved to Manhattan to assist in his defense even if bail were revoked.

Avenatti, 48, is best known for publicly feuding with Donald Trump and representing porn actress Stormy Daniels, who received hush money before the 2016 presidential election not to reveal an alleged sexual encounter with the U.S. president, which Trump denies.

Earlier Wednesday, Gardephe rejected Avenatti's request to dismiss the Nike case because it was a "vindictive" prosecution.

Avenatti called the case payback for the animosity between him and Trump, who once tweeted that Avenatti was "a third rate lawyer who is good at making false accusations."

But Gardephe found no evidence that the prosecution was brought maliciously or at Trump's behest, noting that it was Nike that alerted prosecutors to the alleged extortion.

"Avenatti is being prosecuted for activities wholly unrelated to the political arena," Gardephe wrote.

In the California case, Avenatti was also charged with lying to the Internal Revenue Service, committing bank fraud, and falsely testifying in a bankruptcy case involving his former law firm. He faces a possible 335 years in prison.

Avenatti was also charged in Manhattan with stealing nearly $300,000 from Daniels, representing proceeds from her book contract.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)

01/15/2020 17:14

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