- Michael Avenatti might not be the most trusted voice, but all eyes will turn to him during a criminal case that centers on extortion and fraud. The Crossover digs into reasons why Avenatti's case could cause concern for the basketball world.
Michael Avenatti is not the most trusted narrator, but if the celebrity attorney is to be believed in a new court filing, a Nike employee approved illicit payments to New Orleans Pelicans rookie forward Zion Williamson and Boston Celtics rookie guard Romeo Langford while the two were high school stars. Depending on the trajectory of the federal government’s prosecution against Avenatti, these claims could become problematic for both players as well as for Nike, Duke University and Indiana University.
The accusations appear in a motion that Avenatti’s attorneys, Scott Srebnick and Jose Quinon, recently filed in the U.S. District Court for the Southern District of New York. Avenatti hopes to persuade U.S District Judge Paul Gardephe to dismiss the four criminal charges that he faces for allegedly extorting Nike and conspiring with fellow attorney Mark Geragos to commit extortion.
If convicted, Avenatti could face a lengthy prison sentence. The maximum sentence would be 97 years. In reality, however, he would be sentenced to a much shorter term. The sentences for each conviction could be run concurrently, rather than consecutively. Avenatti, 48, also lacks a criminal record to warrant anything approaching a maximum sentence. Still, the one-time presidential candidate could be looking at years in prison if a court finds that he tried to extort Nike.
The reputation of prosecutors from the U.S. Attorney’s Office for the Southern District of New York is also threatening to Avenatti. Among federal prosecutors, they are perhaps considered the best. Federal prosecutors secure convictions between 85% and 95% of the time, an intimidating data point. The high conviction rate helps to explain why approximately 90% of defendants charged with federal crimes cut deals and plead guilty instead of taking their chances in a trial.
For now, Avenatti is moving forward with a defense as he forcefully maintains his innocence. The longer his defense plays out, the more likely that players, players’ family members, coaches and Nike employees could be forced to testify under oath. They could be forced to explain emails, texts, invoices and bank statements that might implicate them in wrongdoing. As explained below, Avenatti could become a major worry for a number of prominent figures in the basketball and sneaker worlds.
The Nike dispute began with an irritated AAU coach
As detailed in court filings, Avenatti met with Nike attorneys in March of this year to discuss his representation of Gary Franklin, an AAU coach from California who became a client of Avenatti that same month.
Since 2006, Franklin has served as head coach of the California Supreme travel team. For most of that time, Nike enthusiastically sponsored the team, which has played in the footwear company’s Elite Youth Basketball League or EYBL. The EYBL consists of more than 40 traveling teams from across the country.
In recent years the Supreme featured Deandre Ayton, Bol Bol, Solomon Hill, Brandon McCoy, Aaron Holiday and other players who eventually turned pro. They benefited from Supreme’s sponsorship with Nike. Court records indicate that Nike paid the Supreme as much as $72,000 per year and supplied the players with uniforms, shoes, basketballs, and other accessories.
Avenatti insists that Nike recruiters pressured Franklin to bribe players upon threat of the Supreme losing the Nike sponsorship. The alleged bribes included a $30,000 payment to Ayton’s “handler” and a $10,000 payment to Ayton’s mother, Andrea Ayton. Further, Avenatti asserts that Nike directed Franklin to submit false invoices so that the bribes would be disguised as legitimate payments pertaining to travel and sponsorship expenses.
As Avenatti tells it, Franklin grew tired of being held hostage by Nike’s “hostile takeover” of his team. He also objected to Nike forcing him to undertake corrupt and unlawful acts. Nike, for its part, also grew tired of Franklin. They eventually severed contractual ties with him.
In 2018, Franklin sought advice from sports consultant Jeffrey Auerbach. At the time, Franklin was mindful that federal prosecutors had brought wire fraud prosecutions against Adidas director of global marketing James Gatto, Adidas consultant and basketball organizer Merl Code, client recruiter (aka runner) Christian Dawkins as well as several assistant coaches employed by Adidas-sponsored colleges. Franklin and Auerbach hatched a plan to seek “justice” against Nike. Their goal was to engineer the ouster of two Nike executives, Carlton Debose (Nike’s director of Elite Youth Basketball) and Jamal James (Nike’s manager of Elite Youth Basketball), obtain “reasonable reparations” for damage to Supreme and compel Nike to accept a “legitimate and thorough” investigation of its recruiting practices.
Franklin believed that he possessed substantial leverage over Nike. Avenatti references a January 2019 email sent by Franklin to a lawyer whom he contemplated hiring. In the email Franklin writes, “I will make it clear to Nike, that if they don’t promptly agree and/or we can’t come to terms . . . I will seek justice by immediately going to the FBI to report the following federal crimes (with evidence) committed by Nike EYB and its executives, including, but not limited to: racketeering; conspiracy to commit bribery; bribery; money-laundering; fraud; extortion; conspiracy to commit wire fraud; conspiracy to commit mail fraud; wire fraud; mail fraud; and coercion.”
A month later, Auerbach allegedly told a Nike executive that Franklin had “endured workplace bullying and abuse for over 2 years” at the hands of Nike employees. Auerbach, Avenatti claims, warned Nike that Franklin was forced to commit acts that were very similar to those accused of Adidas executives. Avenatti insists that Franklin was directed to “submit fake invoices, make cash and bank-wire payments to handlers and family members of top Nike elite players.”
Avenatti’s interpretation of his interactions with Nike
Avenatti swears that until March of this year, he had no idea who Franklin was nor was he in contact with him or his representatives. For purposes of the law, this is an important point. Avenatti contends that his subsequent discussions with Nike were motivated not by an intent to extort but rather by a legitimate desire to vigorously represent a client who previously demanded that Nike reform. Stated more bluntly, Avenatti argues he was lawfully advocating for a client, Franklin, against a potential defendant, Nike. That would not be extortion. It would be acting as an attorney.
Avenatti only became aware of Franklin after Auerbach made multiple attempts to contact him. Auerbach, as Avenatti tells it, hoped that he would take Franklin’s potential case against Nike. On March 5, Avenatti, Franklin and Auerbach met for the first time.
Avenatti then reached out to Geragos, who had represented Colin Kaepernick in the quarterback’s collusion grievance against the NFL. Since Kaepernick sponsors Nike, Avenatti figured that Geragos might have enhanced access to Nike officials. According to Avenatti, Geragos agreed to “work together on behalf of Coach Franklin” and also approach Nike attorneys about a possible pre-lawsuit settlement of Franklin’s claims. Geragos, Avenatti asserts, also agreed to discuss with Nike officials the need for an internal investigation.
Avenatti recalls that Geragos’s overtures to Nike attorneys led to a March 19 meeting at Geragos’s New York office. The meeting included Geragos, Avenatti and Nike attorneys. During the meeting Avenatti presented Franklin’s perspective, namely that Franklin was effectively forced by Nike to make illicit payments and thereby place his players’ NCAA eligibility in peril. Texts, emails, bank records, invoices and other documents supposedly offer proof of these payments. Avenatti relayed that he sought compensation for his client.
He also stressed that Nike needed to commission an internal investigation into (alleged) widescale fraud at the company. Nike attorneys were no doubt aware that Adidas employees had recently been convicted of crimes and faced another trial the following month. In fact, six months earlier, SDNY prosecutors had reportedly issued a grand jury subpoena to Nike employees whose work included EYBL matters (no Nike employees were charged, though at least theoretically that could still happen).
From this lens, Avenatti and Geragos were merely advocating for a client whose prior communications demanded that Nike pay him and conduct self-examination of its recruiting practices. Avenatti also points out that Geragos has not been charged with a crime. If Avenatti’s acts were extortive, then Geragos, Avenatti asserts, should have also been charged.
Avenatti and Nike offer competing narratives
Nike officials, and later federal prosecutors, clearly perceived the March 19th meeting and subsequent communications—some of which were recorded—in a different light. Avenatti is accused of attempting to extort Nike by threatening to hold a press conference on the eve of the company’s quarterly earnings call and right as the 2019 NCAA men’s basketball tournament would begin. Avenatti warned that he would tell the world about Nike bribing recruits and their families. By doing so, the Justice Department might have become more inclined to charge Nike employees with the types of charges Adidas employees had faced.
Avenatti, as prosecutors tell it, wanted to inflict the greatest damage possible to Nike’s brand—unless the company agreed to pay up, that is. Avenatti demanded that Nike pay Franklin $1.5 million and pay Avenatti and Geragos a combined fee of $15 million to $25 million. The fee would be for Avenatti and Geragos to oversee an internal investigation. Avenatti also allegedly told Nike that the company could pay Avenatti and Geragos $22.5 million to buy their silence.
On one call, Avenatti is allegedly recorded as warning Nike attorneys, “I’m not f------ around with this, and I’m not continuing to play games . . . You guys know enough now to know you’ve got a serious problem. And it’s worth more in exposure to me to just blow the lid on this thing. A few million dollars doesn’t move the needle for me. I’m just being really frank with you . . . I’m not f------ around with this thing anymore . . . I’ll go take ten billion dollars off your client’s market cap. But I’m not f------ around.”
Nike and federal prosecutors thus insist that Avenatti, who has more than 773,000 Twitter followers and swift access to national media, attempted an unlawful shakedown. They regard his interactions with Nike as a willful attempt to swindle the company of tens of millions of dollars, the vast majority of which would go to him and Geragos, and not Franklin. They also perceive his high profile as empowering him to credibly threaten Nike’s brand. Avenatti, in contrast, contends that he was merely an attorney advocating for a client.
Avenatti implicates Williamson, Langford and others
While the criminal case against Avenatti centers on whether his advocacy for Franklin crossed the line into extortion, part of Avenatti’s defense is to claim that Nike was corrupt in its recruitment of star players. To the extent that depiction is accurate, Avenatti can more compellingly insist that Nike was—as Franklin maintained in emails—in need of reform. The more persuasively Avenatti can present that narrative, the more believably Avenatti’s accompanying demands of Nike would fit within the context of his legal representation of Franklin.
With that in mind, Avenatti’s filing notes that “Nike possessed text messages, e-mails, and other documents from 2016-17 . . . proving that Nike executives had arranged for and concealed payments, often in cash, to amateur basketball players and their families and handlers.” The filing then lists a series of specific examples related to Williamson and Langford, including the relevant source of evidence. Back then, Williamson played high school ball at Spartanburg Day School in Spartanburg, South Carolina. He also suited up for the Sumter Falcons in AAU basketball. Langford, meanwhile, played at New Albany High School in New Albany, Indiana. His AAU team was the Eric Gordon All-Stars. Both Williamson and Langford were regarded by scouting services as two of the country’s most promising high school players.
Avenatti’s list asserts that in February 2017, Jamal James (Nike’s manager of Elite Youth Basketball) texted both Carlton DeBose (Nike’s director of Elite Youth Basketball) and John Stovall (Nike’s recruiting coordinator) with a specific request. The request: would Nike be willing to do “whatever may be needed” to secure Williamson and Langford, as well as a third player whose name is redacted from Avenatti’s filing on account of him being a minor.
As Avenatti tells it, Stovall texted back that Williamson could be paid at least $35,000, Langford could be paid $20,000 and the unnamed player could be paid $15,000. Debose then allegedly responded that he would be willing to pay the three players.
To the extent these claims are supported by verifiable evidence, Nike employees would be on record discussing payments to players that would, at a minimum, render those players ineligible for the NCAA. Depending on how the payments were transmitted by Nike employees, there might also be evidence of wire fraud, mail fraud and other crimes.
The Crossover has obtained litigation exhibits that Avenatti filed in support of his claims. Here is a relevant image of the discussion on paying Williamson and Langford:
Here is an image of alleged discussion concerning a supposed bribe to Langford to join Adidas (Langford would attend Indiana; the Hoosiers are sponsored by Adidas):
Avenatti contains still other specific accusations. He asserts that Stovall communicated to James and DeBose that they should not “present our new offer” to Williamson in written form. Avenatti would likely contend that avoidance of a paper trial is consistent with an intent to unlawfully deceive. Avenatti also claims that DeBose told a fellow Nike employee that he was “willing to bet that 38 of 40 teams in the EYBL had to pay a moderate to considerable ransom to families just to play in the EYBL. Of these approximate 38 teams these arrangements are being viewed as a contract by the families and players…”
In furtherance of attempting to prove that EYBL coaches expressed worries to Nike about corruption, Avenatti’s court filing includes an email sent by an EYBL coach to James in April 2017. In the email, the coach plainly warns Nike about corruption:
This type of electronic evidence is helpful to Avenatti because it corroborates his argument that his interactions with Nike were guided by his representation of a client coach who demanded that Nike undertake reform.
To be clear, available evidence does not prove that the Nike offers were ever transmitted to Williamson or Langford, or that either player accepted any bribes. Should the players testify as part of Avenatti’s defense, they would most certainly be asked about those topics. Officials from Duke and Indiana could also be called to testify. In a statement to The Action Network’s Darren Rovell, a Duke spokesperson says, “As we have stated previously, all Duke student-athletes are subject to a thorough review to ensure their eligibility. Beyond that, we have no further comment on this matter.”
Avenatti accusing Williamson of corrupt ties is nothing new. In April, Avenatti tweeted that Nike paid Williamson’s mother, Sharonda Simpson, for “bogus consulting services.” The alleged payments were, as depicted by Avenatti, tied to Williamson agreeing to play at Duke in the 2018-19 season. These claims have not been corroborated. However, if Avenatti goes to trial, more light would be shed on them.
Why Avenatti’s case could become a real problem
Avenatti is easy to dismiss. For one, he’s a criminal defendant in two states. Avenatti is accused of extortion in New York and wire fraud and bank fraud in California. Unrelated to the Nike matter, Avenatti allegedly embezzled client funds and partook in other criminal acts that undermine his credibility. Meanwhile, he faces potential disbarment in California. A person accused of such wrongdoing is normally not one to trust.
Avenatti has also been criticized for coveting media attention to the point where he grandstands. He used his representation of Stormy Daniels to become a high-profile political opponent to President Donald Trump. Last year, Senate Judiciary Chairman Chuck Grassley asked the Justice Department to review whether Avenatti and his client, Julie Swetnick, provided false testimony as the Senate considered the nomination of Judge (now Justice) Brett Kavanaugh to the U.S. Supreme Court (in fairness to Avenatti, he has not faced charges from Grassley’s referral).
This record thus suggests that Avenatti’s claims should be taken with a grain of salt. He could be written off as an agent of chaos or even a grifter. Along those lines, perhaps Avenatti is implicating Williamson merely to distract and confuse.
Here’s the problem with that line of reasoning: whether or not Avenatti is telling the truth, he has the capacity to be extremely disruptive to the basketball world.
For starters, Avenatti is hardly an ordinary defendant. He is a seasoned and sophisticated attorney. He graduated at the top of his class at George Washington University Law School in 1999 and went on to a highly successful career as a litigator. Avenatti may be many things, but naïve and easily intimidated aren’t among them. He can play the long game in a litigation because he’s already done so for his own clients. He’s lived in the legal process and won’t be bullied by it.
Second, while most defendants would incur sizable legal fees if federally prosecuted, Avenatti can, to some extent, serve as his own attorney. Although he has retained criminal defense attorneys, Avenatti can substantially contribute to his own case and thus defray costs. All things being equal, he is probably less inclined than other defendants to cut a deal. The prospect of waiting for a trial is one that Avenatti can tolerate.
Third, it’s telling that Avenatti’s claims of communications between Nike employees include quoted remarks. This indicates that he is excerpting texts and emails that he possesses. Even if Avenatti’s own words aren’t trusted, the words from others in electronic communications would be hard to debunk. Documents can be taken out of context, but they don’t “lie.”
Fourth, the litigation process will include discovery and possibly a trial. Avenatti will be able to demand various documents—emails, text print outs, bank records, vendor invoices, reimbursement forms, notes etc.—in the possession of prosecutors. He can also cross-examine witnesses.
If there is a trial, Williamson, Langford, Ayton and Bol would all be candidates to be called to the witness stand. The same is true of their advisors and family members who Avenatti links to payments, as well as assorted Nike employees. Likewise, college coaches, including Mike Krzyzewski and Archie Miller, could be questioned if they were aware of any money that impacted the recruitment of these players. The list of potential witnesses is therefore long and filled with prominent names. Remember, part of Avenatti’s defense to extortion is that because (in his view) Nike’s practices were so corrupt, his demanding that Nike hire him and Geragos was justifiable.
Meanwhile, expect the NCAA and companies with whom these players have signed contracts to be watching. The NCAA would want to assess if Duke, Indiana and other schools may have played players who were ineligible to play. Jordan Brand, which is owned by Nike and which recently signed Williamson to a $75 million endorsement deal, will also be monitoring the litigation. The same is true of Gina Ford, the president of Prime Sports Marketing who has sued Williamson for $100 million. Ford, whom Williamson has separately sued, contends that Williamson signed an enforceable representation contract with her and then unlawfully breached it to sign with CAA. The Pelicans, Celtics, Phoenix Suns (Ayton) and Denver Nuggets (Bol) will also be interested in litigation that could draw in their young players.
Fifth, federal prosecutors are unlikely to be moved by the prospect of a trial where celebrated persons in the basketball world testify. Prosecutors care about winning their cases. They generally don’t care about protecting the reputations of famous witnesses.
This is perhaps especially true of SDNY prosecutors, who are regarded as the best of the best. Their interests are thus not necessarily aligned with Williamson and those around him. Likewise, if prosecutors learn that Nike employees engaged in the same kind of misconduct as Adidas employees, they could seek charges.
Bottom line: if Avenatti won’t cut a deal and if Avenatti is unable to get the case dismissed, prosecutors will be more than prepared to go to trial. So too will Avenatti. Although cameras aren’t allowed in federal trials, the media attention in an Avenatti trial and its witness list would be off the charts.
The Crossover will keep you posted on key developments.
Michael McCann is SI’s Legal Analyst. He is also an attorney and Director of the Sports and Entertainment Law Institute at the University of New Hampshire Franklin Pierce School of Law.