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Speaker 1: You're listening to Bloomberg Law with June Grazzo from Bloomberg Radio.

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Speaker 1: Michael Abanati became famous across the country while representing adult

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Speaker 1: film actress Stormy Daniels in a lawsuit against President Trump,

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Speaker 1: so famous that he considered a run for president. Now

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Speaker 1: he's sitting in jail a defendant facing twenty years in prison.

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Speaker 1: Abanati is on trial in New York for allegedly trying

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Speaker 1: to extort as much as twenty five million dollars from

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Speaker 1: Nike while representing a youth basketball coach. He denies the

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Speaker 1: charges and says he was just negotiating for a client

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Speaker 1: who claimed that Nike made illegal payments to elite high

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Speaker 1: school athletes. I am confident that when a jury of

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Speaker 1: my peers passes judgment on my conduct, that justice will

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Speaker 1: be done and I will be fully exonerated. Joining me

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Speaker 1: as former federal prosecutor Robert Mintz a partner McCarter in English,

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Speaker 1: So explain the case against Abanati. What prosecutors have alleged

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Speaker 1: in this case is that Abanati demanded that a whistle

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Speaker 1: blower client of his be paid one point five million

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Speaker 1: dollars from Nike, and then also allegedly without his own

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Speaker 1: client's knowledge. He also demanded that he and fellow attorney

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Speaker 1: Mark Garrigos, who was not charged in the case, be

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Speaker 1: paid between fifteen million and twenty five million dollars to

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Speaker 1: conduct an internal investigation of Nike of the very allegations

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Speaker 1: that were made by his whistleblower client. So the defense

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Speaker 1: says that it's not extortion because you use harsh language

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Speaker 1: in negotiating for a client. This was an extortion, This

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Speaker 1: wasn't fraud, that was litigation. Well, it's not unusual for

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Speaker 1: there to be a settlement in a civil case that

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Speaker 1: requires confidentiality on both sides. But what made this case

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Speaker 1: unusual and what drew the attention of Nike's outside council,

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Speaker 1: was that Abanati was also allegedly requiring Nike, as part

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Speaker 1: of its settlement, to hire him to conduct an investigation

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Speaker 1: on behalf of Nike. It's extremely unusual to be adverse

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Speaker 1: to a client and at the same time asked, as

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Speaker 1: a component of a settlement that that company hire you

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Speaker 1: to do additional legal work. So it's extremely unusual. But

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Speaker 1: is it illegal, Well, according to prosecutors, it is. The

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Speaker 1: prosecutors have argued that this is essentially fraud on a

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Speaker 1: shakedown because what Abanati was doing, according to the government,

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Speaker 1: was threatening to go public with these allegations right before

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Speaker 1: March Madness, which is a time where there's a focus

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Speaker 1: on basketball on on a lot of Nike fans are

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Speaker 1: paying attention at that point, and it was also a

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Speaker 1: time that Nike was about to have its earnings announcement.

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Speaker 1: So the threat, according to prosecutors, was time perfectly in

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Speaker 1: order to damage Nike's market capitalization, potentially by billions of dollars.

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Speaker 1: The defense attorney said that the SEC is looking into

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Speaker 1: these allegations against Nike. Does that help Avnati's case in

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Speaker 1: any way? I'm sure it absolutely does if there If

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Speaker 1: you're the defense in this case, you want this case

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Speaker 1: to be all about Nike and all about the allegations

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Speaker 1: that somebody at Nike was paying young basketball players and

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Speaker 1: they're paying their families, which would be illegal, as a

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Speaker 1: way of funneling money to them in the hopes that

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Speaker 1: they would continue to wear Nike sneakers as their career

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Speaker 1: progressed through college and perhaps even into the NBA. That's

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Speaker 1: what the defense wants the case about, and prosecutors will

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Speaker 1: fight vigorously to continue for the jury to focus not

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Speaker 1: on that allegation, but on Abanati's conduct before trial. Abanati

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Speaker 1: made claims that he was being targeted by the Trump administration.

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Speaker 1: Is there any way of using that again? I think

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Speaker 1: we can expect the defense to suggest that he was

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Speaker 1: being target did because of his prior representation of Stormy

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Speaker 1: Daniels and that alleged hush money payment to the president

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Speaker 1: and all of the publicity that surrounded that. But I

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Speaker 1: think that the prosecution is going to try to turn

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Speaker 1: that around and argue that what Abanati was really trying

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Speaker 1: to do was essentially to weaponize his fame. In other words,

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Speaker 1: that his big following on social media, his presence on TV,

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Speaker 1: and his general notoriety was something that he was trying

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Speaker 1: to leverage as a way of threatening Nike that if

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Speaker 1: they didn't make these payments, which the government believes were

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Speaker 1: extortion at payments, he was going to go public with

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Speaker 1: these allegations and damage Nike's financial position. The prosecutors had

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Speaker 1: asked the judge to prevent defense lawyers from mentioning Stormy

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Speaker 1: Daniels and President Trump, but the judge said that would

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Speaker 1: be impossible because it would otherwise seem that Abanati suddenly

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Speaker 1: became this incredibly public lawyer magically, is that advantage Avanati?

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Speaker 1: I think the judge made the right call in case.

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Speaker 1: I understand why prosecutors don't want to let this case

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Speaker 1: go too far afield. They know that if they get

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Speaker 1: into the whole Stormy Daniels issue, that the defense is

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Speaker 1: going to try to argue that somehow Abanati who is

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Speaker 1: being targeted by Trump and by the Trump Justice Department

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Speaker 1: because of the positions he took adverse to the President.

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Speaker 1: But at the same time, I think the judge was

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Speaker 1: right that it's impossible to really tell this story without

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Speaker 1: understanding who Abanati was and the fact that he had

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Speaker 1: this large social media following, which was part of the

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Speaker 1: reason he was trying to use that, according to prosecutors,

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Speaker 1: as a way to leverage this settlement from Nike. Of course,

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Speaker 1: the defendant doesn't have to testify in his own defense

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Speaker 1: at a trial, But with this set of circumstances, and

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Speaker 1: with the way Avanati is known for speaking his mind,

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Speaker 1: does it almost compel him to take the stand? Well,

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Speaker 1: you're right in that in the vast majority of criminal cases,

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Speaker 1: defendants do not take a stand in their own defense

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Speaker 1: because it gives prosecutors the opportunity to essentially retry their case.

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Speaker 1: In other words, once the prosecution has rested and the

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Speaker 1: defense begins, if the defendant takes the stand, prosecutors will

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Speaker 1: essentially ask in questions and cross examine the defendant with

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Speaker 1: the entire prosecution case. And usually that does not end

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Speaker 1: up well for the defendant. But in this case, given

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Speaker 1: Abenadi's notoriety, and given the fact that his fame and

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Speaker 1: his ability to speak publicly were so much a part

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Speaker 1: of this case, and I think there was a reasonable

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Speaker 1: chance that Abenati will take the stand in his own

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Speaker 1: defense and argue that all he was really trying to

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Speaker 1: do was aggressively advocate on behalf of his client, and

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Speaker 1: that he does have a brash personality and he is

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Speaker 1: an aggressive lawyer, but there's nothing illegal about that. He

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Speaker 1: was simply trying to do what was best for his

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Speaker 1: own client. Have you ever represented a lawyer, because it

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Speaker 1: seems like you'd have an advantage in that the lawyer

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Speaker 1: or knows what the rules of the road are, etcetera.

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Speaker 1: But you might have a disadvantage and that the lawyer

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Speaker 1: wants to do what he or she thinks is best

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Speaker 1: rather than what you think is best. Yeah, I think

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Speaker 1: it is a challenge for Abanati's lawyer to try to

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Speaker 1: control his own client here. Certainly, Michael Abanati is familiar

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Speaker 1: with trying cases in front of juries. He's very comfortable

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Speaker 1: in a courtroom, and he's going to be someone who

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Speaker 1: is going to try very much to call the shots

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Speaker 1: in his own case. At the end of the day,

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Speaker 1: as in any trial, a defendant is the one who

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Speaker 1: gets to make the final decision on what to do.

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Speaker 1: So his lawyer can give him his best recommendations, but

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Speaker 1: at the end of the day, Michael Abanati will decide

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Speaker 1: how his defense will proceed. Abanati has been held without

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Speaker 1: bail since he was arrested in l A after prosecutors

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Speaker 1: last month said he violated the conditions of his bail

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Speaker 1: by moving money around improperly. And I wonder about the

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Speaker 1: willingness to put him in jail so quickly when we've

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Speaker 1: seen other instances where high profile defendants Roger Stone and

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Speaker 1: Paul Manafort, for example, were given chance after chance by

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Speaker 1: the judge after they violated the terms of their bail. Well,

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Speaker 1: Mr Abinadi is being incarcerated in connection with a different case,

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Speaker 1: and not the one that is currently on trial in

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Speaker 1: New York, but for a case out in California in

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Speaker 1: which there are charges against him that he embezzled by

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Speaker 1: and funds. In that case, he was out on bail

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Speaker 1: and there were certain terms of his pre trial release

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Speaker 1: which he apparently violated, and the judge has put him

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Speaker 1: in jail at least for the time being. I expect

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Speaker 1: that that order will be appealed, and generally the judge

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Speaker 1: may left him out sometime prior to that case going

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Speaker 1: to trial. Those are decisions though, that are really up

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Speaker 1: to the discretion of the trial court. And when there

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Speaker 1: are instances in which the defendant clearly violates a judge's

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Speaker 1: order pre trial, there are some insances where judge will

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Speaker 1: actually incarcerate you pre trial. We'll have to see how

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Speaker 1: this one plays out, but I expect that at some

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Speaker 1: point he will probably be released before that trial begins. So,

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Speaker 1: looking at the whole set of circumstances, here is the

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Speaker 1: case tougher for the prosecution or the defense. Well, this

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Speaker 1: is a highly unusual case because the way this case

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Speaker 1: played out, it began as a civil case. It began

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Speaker 1: as a whistleblower case where Michael Avenati was representing this client,

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Speaker 1: sitting down with Nike's outside council and with Nike and

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Speaker 1: having what the defense claimed were reasonable and typical settlement negotiations.

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Speaker 1: But at some point the outside lawyers concluded that this

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Speaker 1: was not a settlement, that this was really more of

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Speaker 1: a shakedown, and they actually reached out the federal prosecutors

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Speaker 1: to alert them to what was going on. And then

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Speaker 1: Nike's outside council actually became a witness who recorded these

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Speaker 1: settlement communications with the defense in order to build this

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Speaker 1: case against Michael Lavanati. So it was a very unusual

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Speaker 1: case and the facts here are certainly not something that

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Speaker 1: we see all the time. Here, I think at the

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Speaker 1: end of the day, the biggest challenge for the defense

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Speaker 1: is to explain why part of this settlement was that

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Speaker 1: Michael Abanati would benefit by an eternal investigation, that he

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Speaker 1: was trying to compel Nike to engage him in something

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Speaker 1: that not only did that not benefit his own client,

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Speaker 1: but according to prosecutors, his own client was not even

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Speaker 1: aware of this component of the settlement. That is the

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Speaker 1: part that the defense is going to have to try

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Speaker 1: to explain to jurors as to why this is routine,

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Speaker 1: why this was not illegal, and why somehow this internal

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Speaker 1: investigation benefited Michael Laborati's own clients. Thanks Bob. That's Robert Mints,

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Speaker 1: a partner M Carter in English