Michael Avenatti, the lawyer who represented adult film star Stormy Daniels in her legal battles against US President Donald Trump, has been charged with trying to extort more than $US20 million ($28 million) from sportswear giant Nike.
Federal prosecutors have also charged Mr Avenatti with embezzling an unnamed client’s money to help pay expenses for his coffee company, as well as using fake tax returns to secure millions of dollars in bank loans.
The US attorney’s office in New York brought the Nike case while the US attorney’s office in Los Angeles brought the embezzlement case.
Mr Avenatti was arrested in New York on Monday (local time) and was scheduled to make his initial court appearance in the city, authorities said.
Mr Avenatti, who lives in Los Angeles, could not immediately be reached for comment.
The US attorney for Los Angeles, Nick Hanna, accused Mr Avenatti of “lawless conduct and greed” during a news conference on Monday detailing the charges.
Mr Avenatti gained international notoriety for representing Ms Daniels, the porn star whom Mr Trump is accused of paying off shortly before the 2016 election to keep quiet about an alleged affair. Mr Trump has denied having the affair.
Ms Daniels, who recently replaced Mr Avenatti as her lawyer, said she was “saddened but not shocked” by news of his arrest.
New York prosecutors said Mr Avenatti and an unnamed co-conspirator met with Nike’s lawyers on March 19 and said they had a client, a former amateur athletic coach, who had evidence that Nike employees had paid bribes to top high school players to convince them to play for Nike-sponsored teams.
A former executive at Nike rival Adidas was recently convicted in federal court in Manhattan of taking part in a similar scheme.
Mr Avenatti told Nike that he would go public unless it paid his client $US1.5 million ($2.1 million) and hired him to conduct an internal investigation for between $US15 million ($21 million) and $US25 million ($31 million), according to the complaint.
Prosecutors in New York said Mr Avenatti also offered to accept a $US22.5 million payment to resolve the client’s claims and “buy Avenatti’s silence”.
In a March 20 follow-up call with Nike’s lawyers, Mr Avenatti said that if his demands were not met, “I’ll go take ten billion dollars off your client’s market cap … I’m not fucking around,” according to the complaint.
The charges were revealed shortly after Mr Avenatti said on Twitter that he would hold a news conference on Tuesday to reveal “a major high school/college basketball scandal” that reached “the highest levels of Nike”.
In the embezzlement case in California, prosecutors allege Mr Avenatti misused a client’s $US1.6 million ($2.2 million) settlement to pay for his own expenses as well as those for his coffee business, Global Baristas US, which operated stores in California and Washington state.
He was also accused of defrauding The Peoples Bank in Mississippi of $US4.1 million ($5.8 million) in loans by submitting false personal income tax returns for 2011-2013.
In reality, prosecutors said, Mr Avenatti did not file tax returns for those years and still owed the Internal Revenue Service more than $US850,000 ($1.2 million) from previous years.
Mr Trump’s eldest son, Donald Trump Jr, reacted with glee on Twitter to the news of the arrest of a prominent Trump critic, bashing out a series of tweets, including: “#MAGA – Michael Avenatti Getting Arrested!!!”