Embattled attorney Michael Avenatti acted as 'consultant' for accused 'sex cult' Seagram's heiress Clare Bronfman, but no longer works for her – CNBC

Embattled celebrity attorney Michael Avenatti recently briefly acted “as a consultant” for Seagram’s heiress Clare Bronfman in a case where she is charged with racketeering crimes related to the alleged sex cult NXIVM, Bronfman said in court Thursday.

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But Avenatti no longer has any role in either that case, or in a civil matter pending in upstate New York where he also had served as a consultant, according to Bronfman and her other attorney, Donna Newman.

However, Bronfman told a judge Thursday that she was happy to keep another lawyer, Mark Geragos, as her lead counsel in the criminal case, despite the fact that he has been identified as an alleged — albeit uncharged — co-conspirator of Avenatti’s in a purported plot to extort Nike.

“My understanding is that Mr. Geragos may be implicated,” she said.

Bronfman, 39, had dramatically fainted a day earlier at a hearing in Brooklyn federal court where Judge Nicholas Garaufis had been fuming about his previous lack of knowledge that Avenatti may have been acting at her lawyer.

Bronfman received medical attention on Wednesday after her collapse. Asked whether she was feeling better, Bronfman told the judge Thursday, “I am, thank you.”

“Honestly, I was just very scared yesterday,” Bronfman added.

Avenatti was criminally charged by federal prosecutors in New York on Monday with trying to shake down Nike for up to $25 million in exchange for not going public with claims that the company’s employees made illicit payments to high school basketball players.

Avenatti is the former lawyer for porn star Stormy Daniels in her legal battles with President Donald Trump and his former personal attorney Michael Cohen related to her hush money deal with them to keep quiet about her alleged affair with Trump. The president denies having sex with Daniels.

Avenatti has predicted he will be exonerated in both the Nike extortion case, and in an unreleated case also filed by federal prosecutors in Los Angeles, who accused him of embezzling a client’s funds and of defrauding a bank to obtain loans.

Bronfman’s lawyer, Newman, in a letter Thursday to the judge, Garaufis, said Avenatti’s involvement with Bronfman’s case lasted just a “matter of days.” Avenatti, Newman added, was brought in as a consultant by Geragos, “for a limited purpose.”

“The exact nature of [Avenatti’s] representation was not formalized or documented,” Newman wrote.

And Newman said that “to Ms. Bronfman’s knowledge it was not contemplated that Mr. Avenatti would represent Ms. Bronfman before the court in any proceedings” in the Brooklyn federal criminal case.

“His services on her behalf with any action have been terminated,” Newman wrote. As a result, Newman argued, there was no need for the judge to hold a hearing relating to Avenatti’s involvement.

Geragos, who himself is nationally known attorney with a deep list of celebrity clients, and Avenatti on March 19 met with prosecutors in the U.S. Attorney’s Office for the Eastern District of New York to discuss Bronfman’s criminal case.

Bronfman told Garaufis at a hearing Thursday that she was aware of Avenatti’s presence at that meeting.

The nature of that discussion with prosecutors has not been revealed. But NXIVM co-founder Nancy Salzman, recently pleaded guilty to racketeering in the case.

Bronfman is accused of identity theft and of money laundering while playing a key role in the self-help group NXIVM. Prosecutors say the organization was both a pyramid scheme and a vehicle for providing NXIVM’s founder Keith Raniere with women who were coerced into having sex with him through threats to expose personal information about themselves that they had shared.

In addition to Bronfman and Raniere, remaining defendants in the case include “Smallville” actress Allison Mack, and Salzman’s daughter, Lauren. They have pleaded not guilty.

Bronfman, under questioning by the judge Thursday, confirmed that Geragos is her principal counsel in the criminal case.

When she was asked by Garaufis about Avenatti, whom he described as being targeted by prosecutors, working for her, Bronfman said, “As a consultant, yes.”

At the hearing Wednesday, an angry Garaufis had asked about Avenatti’s role representing the daughter of late Seagram’s CEO Edgar Bronfman, who remains free on a $100 million bond.

The judge was concerned because Avenatti’s involvement had not been disclosed earlier to him, as Geragos’ role was.

The lack of disclosure about Avenatti had been worrisome to Garaufis in part because he already was engaged in the process of making sure that Bronfman was aware of, and willing to waive, any claim to a conflict of interest by lawyers involved in the criminal case.

Her lawyer Geragos’ daughter, Teny Geragos, is herself a lawyer for Bronfman’s co-defendant Raniere, along with the attorney Marc Agnifilo.

Both Teny Geragos and Agnifilo work in the law offices of Benjamin Brafman, who is representing Mark Geragos in connection with the criminal cases against Avenatti. Brafman was at Bronfman’s hearing on Thursday.

And Avenatti is being prosecuted, in two separate criminal cases, by federal prosecutors who, like their counterparts in Brooklyn, are employed by the Justice Department.

Bronfman’s other lawyer Newman, in her letter to Garaufis, said that a hearing about Avenatti’s involvement in the case is “unnecessary” because his role has terminated.

Newman also wrote that she would object to any questions by the judge to Bronfman about whether she understands “that Mr. Geragos may believe himself to have criminal exposure with the matters under investigation by” federal prosecutors in Manhattan and the FBI.

Newman also said she would object to Bronfman being asked whether she understood that Avenatti and Geragos’s meeting on March 19 with federal prosecutors in her case “may be considered relevant to the prosecution of Mr. Avenatti” in Manhattan federal court “and any related investigation involving Mr. Geragos.”

But when Newman tried in court later Thursday to object about the judge’s questioning of Bronfman’s awareness of the meeting with prosecutors last week by Avenatti and Geragos, the judge brushed her off.

“No, not you,” Garaufis snapped. “I want the answer … I don’t want a filter. I want answers.”

“Yes, your honor,” Bronfman said.

She said she knew about the meeting on “the day it happened.”

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