LOS ANGELES (AP) Even before federal prosecutors unsealed charges against Michael Avenatti, the lawyer best known for representing porn actress Stormy Daniels in legal battles against President Donald Trump was facing legal scrutiny for his business practices.
Avenatti was testifying Friday in his own defense in a civil case that included allegations he pocketed $1.6 million from a client as federal authorities were including that claim in their criminal case that could put him behind bars for decades.
Avenatti, 48, faces charges in California for allegedly filing bogus tax returns to secure $4 million in loans and embezzling the clients settlement funds. He faces charges in New York of threatening to release damaging information against Nike if it didnt pay him and another lawyer up to $25 million.
About 12 hours after being released from custody, Avenatti returned to his combative form Tuesday and went on the offensive, accusing Nike of rampant corruption.
He claimed on Twitter that Nike funneled large sums of money to elite student-athletes bound for top colleges and said the corruption reached the companys highest levels.
Prosecutors have not commented on whether Avenattis information about Nike was accurate but said he crossed a line by trying to enrich himself with threats.
A Nike spokesman declined to answer questions about Avenattis tweets. The company said in a statement Monday that it will not be extorted or hide information that is relevant to a government investigation.
While Avenatti confidently declared after his release from custody that he would be exonerated, he told CBS on Tuesday that he is concerned about the charges.
Im nervous, Im scared, he said. If I wasnt, it wouldnt make a lot of sense.
The arrest of Avenatti, who seized the spotlight as a Trump antagonist and considered his own run for president, came as a surprise to many but not to some people who have worked with him.
Jason Frank, who was an independent contractor for the now-bankrupt firm of Eagan Avenatti, has been seeking compensation he claims hes owed for work done before he resigned in 2016, according to federal court filings.
Frank is still trying to collect a $10 million judgment his firm won against Eagan Avenatti and a $4 million personal judgment against Avenatti.
Avenatti repeatedly failed to turn over court-ordered records, and deposited millions of dollars of client fees into accounts hidden during bankruptcy proceedings, Franks lawyers wrote in filings seeking a court-appointed receiver.
The conduct described in the criminal complaint is the conduct weve seen Mr. Avenatti engage in with respect to his debts to his partners going back years, attorney Andrew Stolper said. What you see is a lawyer using his kind of inside knowledge of the legal system.
Most of a nearly $1.4 million payment sent to Eagan Avenatti as part of a settlement with the NFL was funneled to an account for personal expenses such as rent on a luxury apartment and monthly payments on a Ferrari, Franks lawyers said.
On Friday, Stolper questioned Avenatti under oath at a debtor exam about a $4 million payment his firm received from Los Angeles County on behalf of a paraplegic man who tried to kill himself in jail.
