Avenatti’s Enron Legal Defense in Nike-Extortion Case Rejected

(Bloomberg) -- Celebrity lawyer Michael Avenatti didn’t get very far in his bid to use a defense strategy tied to the Enron scandal to fight a criminal charge that he tried to extort millions of dollars from Nike Inc.

U.S. District Judge Paul Gardephe on Thursday denied Avenatti’s request to dismiss a charge of honest services wire fraud on the grounds that it conflicted with the Supreme Court’s ruling in the prosecution of former Enron Chief Executive Officer Jeffrey Skilling.

Avenatti argued that the 2010 Skilling ruling limited such fraud claims to cases involving bribes and kickbacks, and that the charge against him in the Nike case should be dismissed because it didn’t contain either of those words.

“The indictment contains the necessary factual allegations,” Gardephe said.

Avenatti, who gained a national profile after suing President Donald Trump on behalf of adult-film star Stormy Daniels, is set to go on trial later this month in Manhattan.

Gardephe disagreed that the words “bribe” or “kickback” must appear in the charge in order for it to be valid, even if the Skilling ruling limited such criminal claims.

“This court is not aware of any case suggesting that the words ‘bribe’ or ‘kickback’ have talismanic significance,” the judge wrote. Gardephe previously denied Avenatti’s motion to dismiss two extortion counts in the case.

Federal prosecutors say Avenatti, 48, tried to extort $25 million from Beaverton, Oregon-based Nike while representing a youth-league coach, Gary Franklin, who claimed to have information about improper payments to student athletes by the company. Nike’s lawyers in New York wore wires to obtain evidence against Avenatti, who was arrested after a meeting with them.

“When the actual evidence is heard at trial rather than the baseless allegations in the indictment, I will be fully cleared because I did nothing wrong,” Avenatti said in a text message. “I am innocent.”

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Steve Stroth

©2020 Bloomberg L.P.