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Coach who hired Michael Avenatti says he wanted to expose Nike, not in press conference

By Jonathan Stempel

NEW YORK (Reuters) – The government’s star witness in Michael Avenatti’s extortion trial conceded on Friday he wanted to expose Nike Inc’s alleged illegal payments to families of college basketball recruits long before he hired the celebrity lawyer.

Gary Franklin, the founder and coach of youth basketball team California Supreme, nevertheless maintained that Avenatti never told him he might hold a press conference about the accusations, or wanted Nike to hire him for a costly internal probe, or else would seek $22.5 million to buy his silence.

“Do you have any doubt that the defendant did not mention any of those things at any time?” Assistant U.S. Attorney Robert Sobelman asked Franklin, following the coach’s cross-examination by Avenatti’s lawyer.

“No,” Franklin responded.

The trial in Manhattan federal court will resume on Monday, the ninth day of testimony.

Avenatti has pleaded not guilty to trying to shake down Nike by threatening last March to expose its alleged misconduct unless it paid him and celebrity lawyer Mark Geragos up to $25 million for the internal probe, and paid Franklin $1.5 million.

Prosecutors have tried to show Avenatti sought a big payday in part to clear his own heavy debts, and defrauded Franklin by concealing a settlement offer meant only for the coach.

The defense has maintained that Avenatti was simply acting as a lawyer, representing Franklin in negotiations.

In halting testimony, Franklin struggled during cross-examination to recall efforts by his adviser Jeffrey Auerbach to go after Nike starting in March 2018, one year before he hired Avenatti, even when shown documents about what they discussed.

Franklin conceded he was ready in October 2018 to “drop the bomb,” in Auerbach’s words, but said this only meant telling Nike sports marketing chief John Slusher that two executives had wanted him to funnel the illicit payments and falsify invoices.

He hired Avenatti after Nike stopped sponsoring California Supreme, the executives rebuffed his entreaties and Slusher referred him to the Beaverton, Oregon-based company’s law firm.

The hiring came after Franklin saw Avenatti represent adult film actress Stormy Daniels in lawsuits against U.S. President Donald Trump.

Franklin said Avenatti did tell him last March 18, one week before his arrest, he would seek a $1 million settlement, whistleblower protection, and the firing of the two Nike executives.

Nike has denied wrongdoing. It is under a U.S. Securities and Exchange Commission probe related to the suspect payments, according to statements and testimony at the trial.

Avenatti faces two more trials scheduled this year for allegedly defrauding other clients, including Daniels.

(Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman and Daniel Wallis)

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