Judge excludes Trump critic Avenatti's financial strains from Nike extortion trial

By Jonathan Stempel

By Jonathan Stempel

NEW YORK, Jan 22 (Reuters) - A U.S. judge on Wednesday said federal prosecutors may not try to show that Michael Avenatti's heavy debts gave him a motive to extort Nike Inc, giving a victory to the celebrity lawyer as he prepares for his upcoming criminal trial.

U.S. District Judge Paul Gardephe in Manhattan also rejected Avenatti's request to delay the trial following his jailing last week for an alleged bail violation in a California case accusing him of defrauding several clients and lying to the Internal Revenue Service and a bankruptcy court.

Jury selection in the Nike case starts on Monday, and opening statements could begin late Tuesday or Wednesday.

Avenatti, 48, became known for representing pornographic actress Stormy Daniels in lawsuits against Donald Trump, and becoming a self-described "nemesis" of the U.S. president.

He has been in solitary confinement following his Jan. 14 arrest, and wore a thin, dark gray, short-sleeve collarless shirt with matching pants and orange sneakers to Wednesday's hearing.

Avenatti is charged with threatening to publicize accusations that Nike illegally paid families of college basketball recruits unless the sportswear company paid him $15 million to $25 million to conduct a probe.

He was also charged with defrauding his whistleblowing client, youth basketball coach Gary Franklin, by concealing a Nike settlement offer.

Prosecutors had hoped to introduce evidence during their case that Avenatti "conservatively" owed at least $15 million when he dealt with Nike, motivating him to extort.

But the judge said such evidence could prejudice jurors, and added that the prospect of collecting millions of dollars from Nike by itself gave Avenatti a "powerful motive" to try.

"I can't permit the trial to devolve into a lengthy analysis of Avenatti's financial condition," Gardephe said.

The judge, however, also rejected Avenatti's bid to keep settlement negotiations with Nike, which he claimed were confidential, out of the case.

Avenatti was moved on Friday to the Metropolitan Correctional Center in Manhattan, where the warden has said putting him in solitary confinement would ensure his safety, given his "notoriety" and "high profile" case.

A lawyer for Avenatti, Scott Srebnick, said the conditions had affected his client's mental state and made it "exceedingly difficult" to prepare for trial.

Gardephe disagreed, saying Avenatti had several months beforehand to prepare, but said he "will get involved" if the jail conditions interfered with the trial.

Avenatti also faces separate criminal charges in Manhattan of defrauding Daniels out of proceeds from a book contract.

He has pleaded not guilty to all charges. (Reporting by Jonathan Stempel in New York Editing by Matthew Lewis)