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Michael Avenatti not backing off accusations that Nike paid associates of prep players

Michael Avenatti not backing off accusations that Nike paid associates of prep players
Attorney Michael Avenatti speaks to the media outside federal court in New York on Monday. Federal prosecutors in Manhattan charged Avenatti for attempting to extort more than $20 million from Nike. (Peter Foley / European Pressphoto Agency)

Less than 24 hours after FBI agents arrested Michael Avenatti in New York on suspicion of trying to extort more than $20 million from Nike, the lawyer accused the sports-gear giant of paying associates of two elite basketball players while they were in high school.

“Ask DeAndre Ayton and Nike about the cash payments to his mother and others,” Avenatti wrote in a Twitter post Tuesday, referring to the Phoenix Suns rookie who was the top overall pick in last year’s NBA draft.

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“Bol Bol and his handlers also received large sums from Nike,” he wrote in another post, referring to an Oregon freshman who starred as a junior at Santa Ana Mater Dei High before transferring to Findlay Prep in Nevada. “The receipts are clear as day.”

The series of posts didn’t include documentation or other evidence to support the allegations. But Avenatti’s claims further roiled a sport still in the throes of a separate federal probe into bribery and corruption — four ex-assistant coaches at major colleges have taken plea bargains — and linked a prominent Los Angeles AAU program to the latest scandal.

“Contrary to Nike’s claims … they have NOT been cooperating with investigators for over a year,” Avenatti wrote. “Unless you count lying in response to subpoenas and withholding documents as ‘cooperating.’ They are trying to divert attention from their own crimes.”

The Suns declined to comment. Oregon issued a statement saying the school was “unaware of any evidence that would support these allegations.”

Federal prosecutors alleged in a criminal complaint unsealed Monday that Avenatti threatened to hold a news conference accusing Nike of paying associates of high school players unless the company paid his client, an AAU coach, and retained the lawyer's firm to conduct an internal investigation.

Avenatti, who gained national attention representing adult film star Stormy Daniels in her lawsuit against President Trump, denied the charges during a Tuesday interview with “CBS This Morning.”

“If the … prosecution team thought Avenatti’s allegations were true, they would investigate them, not arrest him,” said David Vaughn, a former federal prosecutor who represents colleges and coaches involved in NCAA investigations.

Two people familiar with the matter who spoke on the condition they not be named identified the AAU coach as Gary Franklin Sr. of the California Supreme. Franklin did not return several messages and no one answered the door Tuesday morning at his home in Inglewood.

The Supreme is a decade-and-a-half old program that was a veritable factory of players who moved on to play for top colleges and professionally. Ayton and Bol both played for the Supreme in 2017, along with a slew of college-bound players such as Devonaire Doutrive (Arizona), Tevian Jones (Illinois), Shareef O’Neal (UCLA) and Brandon Williams (Arizona).

Other alumni include former UCLA standout Aaron Holiday and USC’s De’Anthony Melton.

Franklin’s son, Gary Jr., played for the Supreme before going on to a college career at California and Baylor from 2010 to 2014.

The criminal complaint doesn’t accuse Franklin or any players of misconduct.

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During a news conference in New York on Monday, U.S. Attorney Geoffrey Berman declined to comment when asked if the AAU coach, who was not named in the question, was cooperating.

Nike stopped sponsoring the Supreme’s under-17 team at some point before the company’s grassroots league started the 2018 season. The exact timing and reason aren’t clear.

"Nike will not be extorted or hide information that is relevant to a government investigation,” the company said in a statement Monday.

Numerous coaches involved with the Supreme in the past or present, and others connected to high school basketball around Los Angeles, either declined to speak on the record or didn’t respond to questions about the allegations. Privately, some questioned what evidence Avenatti has to support his claims and they wonder what the lawyer will do or say next.

“I’m embarrassed for my profession,” one coach said.

Later Tuesday, several hours after his posts alleging payments to Ayton and Bol, Avenatti returned to Twitter to write: “I will fully cooperate with the NCAA to my maximum ability. Names, dates, amounts, texts, emails, bogus invoices, bank records, wire payments, cash payments, etc. — ALL OF IT. Let’s talk about the truth and facts of what really happened and let the chips fall where they may.”

The sport is still dealing with fallout from the FBI’s long-running investigation into college basketball that burst into public view with 10 arrests in September 2017. Former USC associate head coach Tony Bland and three other former assistants were charged and have pleaded guilty to accepting bribes in exchange for directing players to use a certain sports management company and financial advisor. They are scheduled to be sentenced in late May.

The trial of Christian Dawkins, the would-be chief executive of the sports management company, and former Adidas employee Merl Code will start April 22. Dawkins, Code and Adidas employee Jim Gatto were convicted after trial in a related case last year.

T.J. Gassnola, another ex-Adidas employee, testified during the trial that he gave $15,000 to a family friend of Ayton.

The U.S. attorney’s office in New York pursuing the college basketball cases is also prosecuting Avenatti for the alleged extortion attempt. One of the assistant U.S. attorneys handling the cases, Robert Boone, signed the complaint against Avenatti.

During a conversation recorded by the FBI last week, Avenatti threatened to take $10 billion off Nike’s market cap if it didn’t cooperate. After the storm of tweets Tuesday — Avenatti had been released on $300,000 bond late Monday — the company’s stock gained more than a dollar a share.

The Supreme’s role in the case remains to be seen.

The most recent Form 990 Franklin filed with the Internal Revenue Service on behalf of the Supreme shows the nonprofit received $75,000 in contributions against $80,451 in expenses in 2017.

Nonprofits that operate in California are required to register with the state attorney general’s office and file paperwork each year. A spokeswoman for the office said it has no record of the Supreme — or any entity connected with its employer identification number — ever being registered.

Last year, another nonprofit using Franklin’s home address and named Supreme Elite Basketball registered with the IRS and state. A third nonprofit using the home address, House of Flyght Inc., registered with the secretary of state in October.

Later that month, Franklin posted a brief Instagram video to announce that Percy Miller, better known as the rapper Master P, would join the Supreme as a business partner.

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“You know what we’re going to do, Miller said in the video, “is take this to a whole other level.”

Times staff writers Benjamin Oreskes and Dan Woike contributed to this report.

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