(Adds details from decision including background on 1997 Cosby case)
By Jonathan Stempel
NEW YORK, Jan 6 (Reuters) - A U.S. judge on Monday rejected Michael Avenatti’s bid to dismiss two of the three counts in an indictment accusing the celebrity lawyer of trying to extort Nike Inc by threatening to reveal its alleged improper payments to college basketball recruits.
Citing an alleged extortion of comedian Bill Cosby in the late 1990s, U.S. District Judge Paul Gardephe in Manhattan said prosecutors could try to prove that Avenatti engaged in wrongful conduct by threatening Nike with economic and reputational harm unless it paid him millions of dollars.
Gardephe also called it premature to dismiss as vague the two counts, alleging extortion and transmitting interstate communications with intent to extort.
Avenatti is also charged with honest services wire fraud against his client, youth basketball coach Gary Franklin, by concealing how Nike had offered to settle so long as it did not have to hire and pay Avenatti to probe the alleged payments.
Lawyers for Avenatti did not immediately respond to requests for comment. A spokesman for U.S. Attorney Geoffrey Berman in Manhattan declined to comment.
Avenatti, 48, became famous representing porn star Stormy Daniels and becoming an antagonist of U.S. President Donald Trump.
He faces a scheduled Jan. 21 trial after pleading not guilty to illegally demanding up to $25 million from Nike last March in exchange for not publicizing the basketball payments, and being hired for the internal probe. Nike has denied wrongdoing.
In letting the case proceed, Gardephe cited the 1997 conviction of Autumn Jackson for trying to extort $40 million from Cosby in exchange for not revealing she was his illegitimate child.
Cosby disputed that claim, but admitted to having an affair with Jackson’s mother, and had quietly made payments to help her and put Jackson through college.
Jackson was sentenced to 26 months in prison. Cosby is serving a three- to 10-year prison sentence following his 2018 sexual assault conviction.
Gardephe said conduct becomes wrongful when people to threaten economic loss or reputational harm to obtain property to which they are not entitled.
Prosecutors alleged that money Avenatti sought for himself was separate from the $1.5 million he sought for Franklin.
“While Avenatti’s client may have been in a position to make demands to Nike, Avenatti had no right - independent of his client - to demand millions of dollars from Nike based on confidential information supplied by his client; without his client’s knowledge; and to his client’s detriment,” Gardephe said.
Avenatti has also pleaded not guilty to criminal charges in Manhattan that he cheated Daniels out of proceeds from a book contract, and in California that he defrauded clients out of millions of dollars.
The case is U.S. v. Avenatti, U.S. District Court, Southern District of New York, No. 19-cr-00373. (Reporting by Jonathan Stempel in New York Editing by Paul Simao and Matthew Lewis)