Remember Stormy Daniels?
This post is not about her, but her attorney, Michael Avenatti. And a case he propelled against Nike. He is incarcerated for felony fraud and extortion. There’s a fine line between aggressive demand letters and extortion.
In [the] federal court complaint filed in the Southern District of New York, the government accuse[d] Avenatti of extortion by threatening to publicly release, through a press conference and otherwise, damaging information about the misconduct of Nike employees unless Nike made multimillion dollar payments to Avenatti and a significant payment to his client. According to the complaint, he demanded that the monies be paid quickly, and announced a press conference on his Twitter feed at which time he would expose Nike. Among even more colorful and profane language, according to the complaint, Avenatti allegedly stated, “I’ll go and I’ll go take 10 billion dollars off your client’s market cap… I’m not [bleeping] around.” One of the alleged extortion methods was an unsolicited offer that Avenatti and an unnamed co-conspirator would conduct an “internal investigation” for which Avenatti and his co-conspirator would be paid $15 to 25 million. If the demands were met, he promised confidentiality and that his client would “ride off into the sunset.” Federal prosecutors called this conduct “an old-fashioned shakedown.”…
However, if the methods used – false information, publicity, grossly exaggerated economic demands with a flimsy connection to the claim, and unusual payments directly to the attorney threatening to file a criminal complaint – are illegitimate, such conduct could cross the line between aggressive and zealous advocacy and extortion.
On February 14, 2020, he was found guilty on all three counts related to attempted extortion of Nike. The judge sentenced him to 30 months in prison.
The Second Circuit upheld the conviction on appeal.
In Avenatti’s case, the panel acknowledged that he had some claim to the demand of payment, but as in the Jackson case, there was no nexus between the threat and that claim. The panel rejected each of Avenatti’s four arguments to the contrary. First, the jury was entitled to find that Avenatti had no reasonable belief that his demand for an internal-investigation retainer served his client’s goals. The demand was actually contrary to those goals, in that it risked injuring Franklin’s reputation without ensuring any benefit to him. Moreover, the retainer demand was unrelated to what Franklin identified as his key goals in his dispute with Nike—getting to coach the team again, re-establishing Cal Supreme’s relationship with Nike, and seeing the Nike employees fired. Indeed, Avenatti never even raised those goals during the negotiations, and the evidence showed that the retainer demand was a sticking point, rather than an aid, in fulfilling the goal of compensating Franklin financially.
Second, the evidence showed that Avenatti never intended to conduct a bona fide internal investigation of Nike’s sponsorship practices. The price tag for this investigation was far higher than any Nike’s counsel had ever received, and Avenatti never provided any explanation of the scope of that investigation, or why it would cost so much. Instead, the jury was entitled to conclude that the retainer demand was not made for a real internal investigation, but as the price for Avenatti’s silence. Silence purchased based on threats to cause harm is the essence of extortion.
Third, the panel analyzed Avenatti’s follow-up offer to receive one lump-sum payment of $22.5 million without signing a separate retainer agreement. The panel observed that Avenatti never retracted his original retainer demand, so this offer was irrelevant to whether Avenatti committed extortion by making the original demand. And even if he had retracted it, the jury could reasonably have concluded that Avenatti would have diverted the bulk of that money to himself, rather than Franklin.
Fourth, the panel rejected the argument that the retainer demand was a legitimate attempt to recover attorneys’ fees. The panel explained that the retainer demand was unrelated to any legal work Avenatti had performed for Franklin, and that, at best, it would cover future fees for a separate engagement which conflicted with his representation of Franklin. And finally, the panel noted that the jury was entitled to see through the technicalities of the retainer demand and see it as a threat unrelated to any provision of legal services. In a footnote, the panel calculated that even if he and Geragos had worked 24 hours a day for the entire time period in which he represented Franklin, and each had billed $1000 per hour, they still would have merited nowhere near what Avenatti demanded from Nike for a retainer. Op. at 39 n. 24.
As of the date of this post, Mr. Avenatti is still incarcerated. He is scheduled for release in 2035. He had also pled guilty to wire fraud and obstruction of administration of Internal Revenue Code.
Onward to Maryland.
Stephen Snyder is a famous Maryland medical malpractice plaintiff’s attorney. On November 22, 2024, after a nine day trial, he was found guilty of attempted extortion, and other assorted charges.
The evidence at trial showed that Snyder, a plaintiffs medical malpractice attorney in the Baltimore area, represented two medical malpractice claimants who allegedly experienced injury following organ transplants at the University of Maryland Medical Center (“UMMC”). One of those claimants received a kidney transplant. From in or around January 2018 through September 2018, Snyder attempted to extort the University of Maryland Medical System (“UMMS”) by threatening to “destroy” the UMMC transplant department unless UMMS paid him $25 million personally, and separate from any settlement with his client.
Specifically, Snyder threatened a public relations campaign that would falsely accuse UMMC of tricking unsophisticated patients into accepting diseased organs. Snyder claimed that he would run a front-page ad in the Baltimore Sun, hold a press conference, and create an internet advertisement that would direct anyone searching for the UMMC transplant program to his law firm’s website. Snyder also threatened to release commercials that he created that conveyed his false message and accused UMMC of putting “profits over safety.” Snyder played these commercials during meetings with attorneys representing UMMS. Snyder claimed that the parties could enter into a sham consulting agreement that would provide cover for the $25 million payment.
Snyder made his extortionate demands and threats over a series of meetings and phone calls with attorneys for UMMS in 2018. One of those meetings, which occurred on August 23, 2018, was recorded by Federal law enforcement using hidden video cameras.
Prosecutors asked the federal judge to sentence Mr. Snyder to three years in prison followed by three years of supervised release.
“Snyder’s crimes threatened the reputation of a health care institution that provides lifesaving transplants,” the government’s sentencing memorandum, dated March 19, states.
Snyder was 77 at the time of his conviction.
On April 2, 2025, the judge sentenced Snyder to three years of probation with six months of home confinement.
U.S. District Judge Deborah Boardman cited Snyder’s rapidly declining physical health and cognitive ability in giving him a sentence with no prison time. She said a prison sentence was not necessary to deter him or other attorneys from committing similar crimes.
Here’s how the scheme would work.
Prosecutors had contended that Snyder promised to refrain from disparaging the medical system’s transplant program in exchange for the consulting deal, which would prevent him from suing on behalf of medical-malpractice clients because of a conflict of interest. Snyder has said he offered to become a consultant to “help prevent any future tragedies.”
Details from the trial.
Snyder contended that he was entrapped by the medical system, which strung him along while the FBI recorded several of his phone calls. He also said he had consulted with two ethics experts who said the consulting agreement would be legal and ethical.
The Baltimore Banner reports that Snyder has won multiple nine-figure settlements and jury verdicts over the course of his 50-year career.
“But by his own admission,” the publication reports, “Snyder is not at the top of his game. He has told the court that he is in poor health and struggling. He repeatedly ran afoul of the judge. Most of his direct and cross-examinations were peppered with sustained objections for not following court rules and [the judge’s] orders, including 100 in one day of testimony.”
U.S. District Judge Deborah Boardman of the District of Maryland found Snyder in contempt after he delivered his closing argument Thursday, WBAL-TV reports.
According to WBAL-TV, Boardman had “warned Snyder not to argue with witnesses, not to testify through statements, not to bring up topics he was aware the judge barred from the case in October—but he kept doing it anyway, including four times during his 75-minute closing argument.”
There’s a fine line between zealous prosecution of a client’s case and extortion. But demanding eight figure “consulting gigs” to avoid future litigation or destruction of a defendant’s reputation does not seem like a close call.
What do you think?
