4:40 PM PT -- Avenatti has been released on a $300,000 bond co-signed by two "financially responsible individuals." His travel has been restricted to Eastern and Southern New York, as well as the Southern District of California, for his other federal case.
He is not allowed to communicate with alleged co-conspirator, Mark Geragos, and he must report any financial transactions over $5,000 ... which may as well end his string of fancy dinners in Hollywood at celebrity hot spots, like Craig's and Dan Tana's.
12:20 PM PT -- Nike released a statement, admitting they have been cooperating with the government's investigation into NCAA basketball for over a year, and claiming they will not be extorted in any situation.
The statement reads, "Nike will not be extorted or hide information that is relevant to a government investigation. Nike has been cooperating with the government's investigation into NCAA basketball for over a year." They add, "When Nike became aware of this matter, Nike immediately reported it to federal prosecutors. When Mr. Avenatti attempted to extort Nike over this matter, Nike with the assistance of outside counsel at Boies Schiller Flexner, aided the investigation."
Nike says they firmly believe in "ethical and fair play," and will continue to assist the prosecutors.
According to the U.S. Attorney’s Office Spokesman, Avenatti was arrested today and a press conference is scheduled for later today.
Jummy Olabanji of NBC in New York says that Avenatti was picked up by FBI agents at 12:30 PM in midtown Manhattan.
The DOJ said in a statement that Avenatti allegedly "embezzled a client’s money in order to pay his own expenses and debts — as well as those of his coffee business and law firm — and also defrauded a bank by using phony tax returns to obtain millions of dollars in loans."
In one instance, Avenatti allegedly "negotiated a settlement which called for $1.6 million in settlement money to be paid on January 10, 2018, but then gave the client a bogus settlement agreement with a false payment date of March 10, 2018."
In another instance, the DOJ claims Avenatti "allegedly defrauded a bank in Mississippi by submitting to the lender false tax returns in order to obtain three loans totaling $4.1 million for his law firm and coffee business in 2014."
"A lawyer has a basic duty not to steal from his client,” United States Attorney Nick Hanna said in the statement. “Mr. Avenatti is facing serious criminal charges alleging he misappropriated client trust funds for his personal use and he defrauded a bank by submitting phony tax returns in order to obtain millions of dollars in loans."
If convicted on both charges, the DOJ says that Avenatti will face a statutory maximum sentence of 50 years in federal prison.
In a separate case, Michael Avenatti allegedly attempted to extort Nike for $20 million after he threatened to sue them. Olabanji says Avenatti threatened to use "his ability to garner publicity to inflict substantial financial and reputational harm on the company if his demands were not met."
According to that criminal complaint, Avenatti allegedly emailed Nike saying, "I’ll go take ten billion dollars off your client’s market cap ... I’m not f**king around."
Just before his arrest, Avenatti tweeted about Nike, saying he planned to disclose "a major high school/college basketball scandal perpetrated by @Nike that we have uncovered. This criminal conduct reaches the highest levels of Nike and involves some of the biggest names in college basketball."
Avenatti's most famous client, Stormy Daniels, tweeted after the news broke, saying she was "saddened but not shocked" by the allegations against him.