United States v. Avenatti
Decision Date | 08 January 2020 |
Docket Number | S1 19 Cr. 373 (PGG) |
Parties | UNITED STATES of America v. Michael AVENATTI, Defendant. |
Court | U.S. District Court — Southern District of New York |
Matthew D. Podolsky, Robert Benjamin Sobelman, Daniel Charles Richenthal, United States Attorney's Office, New York, NY, for United States of America.
Jose Manuel Quinon, Jose M. Quinon, P.A., Howard M. Srebnick, Black, Srebnick, Kornspan & Stumpf, P.A., Scott Alan Srebnick, Scott A. Srebnick, P.A., Miami, FL, E. Danya Perry, Perry Guha LLP, New York, NY, for Defendant.
Indictment (S1) 19 Cr. 373 charges Defendant Michael Avenatti with transmitting interstate communications with intent to extort, in violation of 18 U.S.C. § 875(d) (Count One); Hobbs Act extortion, in violation of 18 U.S.C. § 1951 (Count Two); and honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346 (Count Three). The Government charges that Avenatti – who is licensed to practice law in California – transmitted in interstate commerce threats "to cause financial harm to Nike and its reputation if Nike did not agree to make multimillion dollar payments to Avenatti"; "used threats of economic and reputational harm in an attempt to obtain multimillion dollar payments from Nike"; and used interstate communications to "engage[ ] in a scheme to obtain payments for himself from Nike based on confidential information provided to AVENATTI by Client-1 for the purpose of furthering AVENATTI's representation of Client-1, without Client-1's knowledge or approval," thereby depriving Client-1 of the "duty of honest services" he was owed. ((S1) Indictment (Dkt. No. 72) ¶¶ 20, 22, 24)
Avenatti has moved to dismiss Count Three, the honest services wire fraud count. (Def. Mot. (Dkt. No. 74)) Avenatti contends that Count Three must be dismissed because (1) Skilling v. United States, 561 U.S. 358, 130 S.Ct. 2896, 177 L.Ed.2d 619 (2010), limits the honest services wire fraud statute to bribes and kickbacks, and the (S1) Indictment does not allege a bribe or kickback; (2) the "honest services wire fraud charge fails to allege a violation of a legally cognizable duty"; and (3) the "honest services wire fraud statute is vague-as-applied." (Def. Br. (Dkt. No. 75) at 12, 14, 16) (emphasis omitted).1 For the reasons stated below, Avenatti's motion to dismiss Count Three will be denied.
I. THE (S1) INDICTMENT'S FACTUAL ALLEGATIONS AND CHARGES
(Id. ¶ 11)
In a March 20, 2019 telephone call with Nike's counsel, Avenatti reiterated that he expected to "get a million five for [Client-1]" and to be "hired to handle the internal investigation," for which he demanded a "multimillion dollar retainer" in exchange for not holding a press conference. (Id. ¶ 13(a)-(b)) According to Avenatti, "3 or 5 or 7 million dollars" would not be sufficient for his retainer. Unless Nike agreed to a larger retainer, Avenatti would hold a press conference that would "take ten billion dollars off [Nike's] market cap" (Id. ¶ 13(c)) Avenatti also stated that "he expected to be paid more than $9 million." (Id. ¶ 13(d)) At the end of the call, Avenatti agreed to meet with Nike's lawyers the next day. (Id. ¶ 13(e))
On March 21, 2019, Avenatti met with Nike's lawyers in Manhattan. (Id. ¶ 14) At that meeting, Avenatti demanded "a $12 million retainer to be paid immediately and to be ‘deemed earned when paid,’ with a minimum guarantee of $15 million in billings and a maximum of $25 million, ‘unless the scope changes.’ " (Id. ¶ 14(a)) Nike's counsel asked Avenatti whether Nike could simply pay Client-1, (Id. ¶ 14(b)) Avenatti agreed to meet with Nike's counsel (Id. ¶ 14(f))
According to the (S1) Indictment, Avenatti did not (Id. ¶ 14(g))
About two hours after the March 21, 2019 meeting, and without consulting Client-1, Avenatti posted the following message on Twitter:
(Id. ¶ 15; see also @MichaelAvenatti, Twitter (Mar. 21, 2019, 3:52 p.m.), https://twitter.com/MichaelAvenatti/status/1108818722767163392) The article linked in the March 21, 2019 tweet refers to a prosecution brought by the Government against employees of Adidas – a competitor of Nike. (Id. ¶ 16)
On March 25, 2019, after Avenatti learned that law enforcement officers had approached Client-1, but shortly before he was arrested, Avenatti posted the following message to Twitter:
(Id. ¶ 18; see also @MichaelAvenatti, Twitter (Mar. 25, 2019, 12:16 p.m.), https://twitter.com/MichaelAvenatti/status/1110213957170749440)
Later that day, Avenatti was arrested as he approached Nike's counsel's office complex in Manhattan for the scheduled March 25, 2019 meeting. (Id. ¶ 17)
The (S1) Indictment charges Avenatti with: (1) transmitting interstate communications with intent to extort, in violation of 18 U.S.C. § 875(d), in that "AVENATTI, during an interstate telephone call, threatened to cause financial harm to Nike and its reputation if Nike did not agree to make multimillion dollar payments to AVENATTI"; (2) attempted extortion, in violation of 18 U.S.C. § 1951, in that "AVENATTI used threats of economic and reputational harm in an attempt to obtain multimillion dollar payments from Nike, a multinational public corporation"; and (3) committing honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346, in that he "engaged in a scheme to obtain payments for himself from Nike based on confidential information provided to AVENATTI by Client-1 ... without Client-1's knowledge or approval, and used and caused the use of interstate communications to effect the scheme." (Id. ¶¶ 20, 22, 24)
Avenatti contends that Count Three – which alleges honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346 – must be dismissed, because (1) Skilling v. United States, 561 U.S. 358, 130 S.Ct. 2896, 177 L.Ed.2d 619 (2010), limits the honest services wire fraud statute to bribes and kickbacks, and the (S1) Indictment does not allege a bribe or kickback; (2) the "honest services wire fraud charge fails to allege a violation of a legally...
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