Avenatti - who rose to fame while representing adult film star Stormy Daniels in lawsuits against President Donald Trump - is accused of attempting to extort more than $20 million from the Swoosh in exchange for not publicizing alleged illicit payments to student athletes.
California attorney Michael Avenatti leaves a courthouse in NY in May 2019 following a hearing.
The complaint against Avenatti includes allegations that he stole almost $840,000 from former client Gregory Barela, who also testified Tuesday. Avenatti allegedly kept the cash for himself for personal use despite Barela making continued inquiries about the funds.
Prosecutors are seeking a hearing Wednesday in federal court in Santa Ana on their request to revoke Avenatti's bail.
Thomas Warren, the attorney's lead counsel in the disciplinary case, told the court that in relation to a criminal matter in Santa Ana, Avenatti was unable to return.
Michael Avenatti was arrested Tuesday evening by federal agents while attending a State Bar Court hearing in Los Angeles. "Exactly what the details are I don't know".
Matthew D. Podolsky, a federal prosecutor with the US attorney's office in Manhattan, told Gardephe he understood his Los Angeles counterparts would make such a request, but he still believed Avenatti could be transported to NY for trial within 24 to 48 hours.
"The arrest of Mr. Avenatti has essentially thrown this trial into chaos", Judge Gardephe said.
This May 2019, California lawyer Michael Avenatti is leaving a NY courthouse after a hearing.
Avenatti faces trial in May in California on a 36-count indictment that includes allegations that he defrauded clients of millions of dollars, stiffed the IRS and committed bank fraud. However, H. Dean Steward, who is representing Avenatti, told the media, "It's my understanding it has something to do with a bail violation, but I don't have the warrant".
Avenatti, who is scheduled to go on trial next week in NY federal court for allegedly trying to extort sports giant Nike out of more than $20 million, used the money to cover rent on his luxury apartment in Century City, pay his legal bills and buy a $50,000 Mercedes, according to the court documents.