The charges against celebrity lawyer Michael Avenatti are “very significant,” veteran white-collar defense attorney Thomas Gorman told CNBC on Monday.
Avenatti is usually accused of trying to extort up to $25 million coming from Nike by threatening to hurt the athletic apparel giant financially with negative publicity.
His arrest on Monday came about 15 minutes after he tweeted which he might be holding a press conference to disclose a “major high school/college basketball scandal perpetrated by” Nike which he claims to have uncovered.
“which’s over the top,” Gorman said on “The Exchange.”
“This kind of is usually clearly not the way to present a whistleblower claim. There are proper ways to present a whistleblower claim. You can take the client down to the Securities as well as also also Exchange Commission, for example. They have a whole process to do This kind of. The client can get paid money if the idea pans out,” he added.
The real problem for Avenatti is usually which he was caught on tape, said Gorman, who has defended companies as well as also also individuals in SEC as well as also also Justice Department investigations.
According to the complaint, Avenatti as well as also also a cooperating witness spoke with Nike attorneys by phone as well as also also during which call “Avenatti stated, with respect to his demands for payment of millions of dollars, which if those demands were not met ‘I’ll go take ten billion dollars off your client’s market cap … I’m not f—ing around.'”
“Since they are on tape, the idea’s going to be hard for Mr. Avenatti to dispute these,” Gorman said.
He just needs to look at another high-profile case — which of former hedge-fund manager Raj Rajaratnam — to see how crucial those recordings can be. Rajaratnam is usually today serving prison time for insider trading.
“What convicted him was not the some other evidence. the idea was the tapes,” Gorman said.
Avenatti, who once represented porn star Stormy Daniels in her lawsuits against President Donald Trump as well as also also his former attorney Michael Cohen, is usually also facing separate charges of embezzlement in Los Angeles.