A New York federal judge on Wednesday rejected Michael Avenatti's argument for a new trial in his Nike extortion case, saying financial information about his law firm in the separate client fraud case in California is irrelevant and not exculpatory. 

U.S. District Judge Paul Gardephe of the Southern District of New York also said "overwhelming evidence" of Avenatti's guilt means the documents produced by financial analyst John Drum for the U.S. Attorney's Office in Los Angeles showing how Avenatti misappropriated client money wouldn't change the outcome of the Nike trial, and he distinguished between the prosecution teams in New York and California.

That distinction is a crucial legal finding as Avenatti tries to carry the momentum of his California mistrial into his New York cases.

Gardephe in July ruled the prosecution teams "engaged in joint and coordinated fact gathering" regarding Avenatti's paralegal, Judy Regnier. But the judge's 23-page ruling said that's not enough "to demonstrate that the two offices were engaged in a joint investigation and prosecution," and he declined Avenatti's request to issue an indicative ruling to the U.S. Court of Appeals for the Second Circuit saying he'd grant a new trial if he had jurisdiction. He also noted that while the mistrial in California was prompted by client financial information, including Tabs3 software data, on Avenatti's seized law firm servers, the request before Gardephe was based not on that information but on Drum's expert analysis.

"As noted earlier, the charges in the California action are entirely unrelated to those in New York, and the Drum documents cover an earlier time period not relevant to the time at which Avenatti was extorting Nike," Gardephe wrote. The ruling follows Gardephe's order for transcripts of the California proceedings before U.S. District Senior Judge James Selna of the Central District of California beyond what Avenatti's lawyer, Benjamin Silverman, provided with his request.

New York prosecutors never possessed Drum's analyses, and they weren't privileged to them until after the Nike trial concluded. That finding alone is "fatal to any Brady claim premised on the Drum documents," Gardephe wrote, referencing Brady v. Maryland regarding prosecutors' duties to disclose exculpatory evidence.

But Gardephe also said Drum's documents aren't exculpatory in the Nike case because they don't cast doubt "on the evidence of Avenatti's financial condition that was introduced at trial."

Drum's analyses covered Avenatti's law firm finances between 2009 and 2018, during which California prosecutors say he was bilking five clients out of millions of dollars, while the Nike case focused on Avenatti's financial condition in March 2019. He didn't consider the $11 million in judgments against Avenatti at the time of the Nike extortion, the November 2018 eviction from his firm's high-rise office in Newport Beach, California, and his statements to Regnier that he was "working on something" that would address his firm's debt and allow Avenatti to "start a new firm," according to Gardephe's ruling. Prosecutors argued in trial that "something" was Avenatti's extortion of Nike, "which he hoped would yield $15 million to $25 million."

The judge also said the primary evidence against Avenatti was "his own audio and video-recorded statements, in which he repeatedly and vividly" threatened Nike and "acted in a manner that was clearly adverse to his client's interest." Gardephe called prosecutors' limited evidence about Avenatti's financial condition "no more than a footnote during the proof at trial, because the court excluded most of the government's evidence concerning Avenatti's allegedly poor financial condition."

"As the court stated in making this ruling, the lure of the $15 to $25 million that Avenatti was demanding from Nike was sufficient to explain his financial motive," Gardephe said.