Friday 21 September 2018


There is an old adage that states that you are what your close friends are. If they are crooks, it follows then that you are also a crook.

Michael Dean Cohen, age 52 at the time of the publishing of this article is an American attorney who worked as a lawyer for Donald Trump from 2006 until the termination of his employment in May 2018, a month after a federal investigation against Cohen began.

Federal officials homed in on more than $20 million in loans obtained by a taxi businesses owned by Cohen and his family as part of an ongoing investigation into possible bank fraud committed by them.

Federal authorities were investigating whether President Trump’s former personal lawyer and fixer of problems facing Trump , committed bank and tax fraud zeroed in on well over $20 million in loans obtained by taxi businesses that he and his family own.  Of course, he isn`t the first lawyer to be accused of wrongdoings. Thousands of them have been convicted of crimes.

Investigators were also investigating Cohen as to whether or not  he violated campaign finance or other laws by helping to arrange financial deals to secure the silence of women who said they had affairs with the president.  The inquiry had entered the final stage and prosecutors were considering filing charges by the end of August which in fact, they did.

Any criminal charges against Mr. Cohen dealt a significant blow to the president. Mr. Cohen had worked for the president’s company, called the Trump Organization, for more than a decade. He was one of Mr. Trump’s most loyal and visible aides and later called himself the president’s personal lawyer after Mr. Trump took office.

The bank loans under scrutiny, the total of which has not been previously reported, came from two financial institutions in the New York region that have catered on the taxi industry, Sterling National Bank and the Melrose Credit Union, according to business records and people with knowledge of the matter, including a banker who reviewed the transactions.

Federal investigators in New York were seeking to determine whether Mr. Cohen misrepresented the value of his assets to obtain the loans, which exceed $20 million.

They were also examining how he handled the income from his taxi medallions and whether he failed to report it to the Internal Revenue Service.  Taxis in New York City are painted canary yellow  and referred to as medallion taxis.

The two lenders were cited in the search warrants for raids that federal agents conducted this spring on Mr. Cohen’s office, home and a hotel room where he was staying.  

A grand jury subpoena was sought and given seeking records related to the loans.

There is no indication that either bank suffered a loss as a result of the loans or that Cohen missed payments, which are ordinarily important aspects in a bank fraud case. While bank fraud without a loss is rarely charged on its own, it is sometimes charged in conjunction with other crimes, which is what happened in Cohen’s case.

At this late stage of the inquiry, it was still possible that Cohen would plead guilty which he did rather than face an indictment. He hinted publicly and stated explicitly in private that he is eager to tell prosecutors what he knows in exchange for leniency.

A cooperation agreement would likely include a provision that Mr. Cohen also provide information to the special counsel, Robert Mueller, who is investigating possible involvement by the Trump campaign in Russia’s meddling in the 2016 election.

It is unclear whether the prosecutors and Mr. Cohen’s lawyers had detailed discussions about a potential cooperation deal, but it is unlikely that the government would bring charges without having done so.

But if a plea deal was not reached, either because Cohen and prosecutors couldn`t agree on the terms or because prosecutors determined he does not have valuable information or is not credible, the government would likely would have sought to bring charges well before the midterm elections.

If the matter was not finalized by the end of August, prosecutors probably would have to deal with that issue until after the election. That schedule would conform with the Justice Department’s informal policy of avoiding bringing politically sensitive cases that could influence voters close to an election.

The investigation into Mr. Cohen burst into public view on April ninth of this year when federal authorities searched his home, office and the hotel room, a move that sent a seismic wave through Washington and rattled Mr. Trump’s inner circle.

The investigation began under Mr. Mueller`s inquiry  who then referred the evidence to the United States attorney’s office in Manhattan. That office then lead the inquiry along with the F.B.I. and I.R.S., which also conducted an extensive review of Cohen’s personal business activities.

Days after the search, Mr. Cohen went to court in an attempt to limit the evidence prosecutors could review, claiming much of what was seized was covered by attorney-client privilege. Trump joined the effort to stop the investigation with respect to the dealings beyween Trump and Coen.

During that litigation, prosecutors revealed that they had been investigating Cohen for fraud for “months” and had previously obtained a search warrant for his email accounts.

Mr. Trump railed against the investigation on Twitter and complained that “attorney-client privilege is dead.” His lawyer, Rudolph W. Giuliani, referred to the agents who carried out the searches as “storm troopers.” The normally combative Cohen, for his part, told an interviewer that they were “were extremely professional, courteous and respectful.”

At the time, some of Trump’s advisers came to view the investigation into Mr. Cohen as more dangerous to the Trump presidency than Mr. Mueller’s inquiry.

In recent decades, Mr. Cohen has had a wide range of personal business interests, in addition to his work for the Trump Organization. He was a real estate investor, had a personal injury law practice and was involved with a gambling boat in Florida.
But federal investigators appear to be especially focused on his work as an investor in taxi medallions that the permits that drivers need to legally operate yellow cabs in New York City.

Cohen pleaded guilty to violating federal campaign finance laws and has implicated Trump. Here is how their relationship has evolved.

A review of court filings, business and property records and interviews with people with knowledge of the matter has provided the clearest picture to date of the scope of that inquiry.

The search warrants for the Cohen raids sought records and communications relating to the two financial institutions, Sterling National Bank and the Melrose Credit Union, as well as documents regarding the payments to women who said they had affairs with Mr. Trump, among other materials, several people with knowledge of the inquiry have said.

The investigation into possible bank fraud has focused at least in part on a series of loans for more than $20 million that the two institutions made in December 2014, according to a review of business records and interviews with people with knowledge of the matter.

Publicly filed financing statements indicate that Mr. Cohen used 32 taxi medallions as collateral for the Sterling loans. The medallions were then valued at more than $1 million each, and generated more than $1 million a year in income.

The loans were made to 16 separate companies controlled by Cohen and his family, each company owning two taxi medallions, the person who reviewed the transactions said. Mr. Cohen and his wife also personally guaranteed the loans, according to the filings.

The tax fraud aspect of the investigation hadbeen focused in part on whether Mr. Cohen properly reported the income from the medallions, which was sometimes in cash.

One witness who provided evidence about the possible bank and tax fraud was Evgeny Freidman, Mr. Cohen’s long-time friend and former business associate who began cooperating with federal prosecutors this spring.

Mr. Freidman, known as the Taxi King for his once vast and long-time holdings in that industry, managed taxi medallions owned by Cohen and his family between 2012 and 2018. In 2016, a federal judge found that Freidman, a lawyer who was disbarred earlier this year, had transferred more than $60 million into offshore trusts to avoid paying debts. New York City regulators have also barred him from continuing to manage medallions.

Mr. Freidman was facing up to 25 years in prison in an unrelated state fraud case in Albany involving his taxi business. But he struck a deal with state prosecutors under which he avoided prison in return for cooperating with federal authorities investigating Cohen.

Several people with knowledge of the matter have said investigators were focusing, in part, on precisely what was done with the monthly payments of the income from the taxi medallions that Freidman made to Cohen, what representations Cohen made to the banks about those payments, and whether they were reported on Cohen’s taxes.

Freidman’s lawyer, Patrick J. Egan, said on Friday, “It would be against Mr. Freidman’s interest to make a public statement regarding an ongoing criminal investigation.” He was right on that point.

A Long Island accountant who worked for Cohen and Freidman could also provide testimony about the payments, according to several people with knowledge of the matter. The accountant, Jeffrey Getzel, has testified before the grand jury hearing evidence against Cohen

It was previously unclear whether prosecutors might seek to charge Cohen with conduct related to the presidential campaign or his work for Trump if he meets with Mueller.

Legal experts have said that the payments to two women who said they had affairs with Trump could become part of a campaign finance case. Neither woman, after being paid, spoke publicly about Trump in the weeks before his election as president.

One of Cohen’s lawyers, Lanny J. Davis, revealed a possible piece of evidence for such a case when he released a recording of a September 2016 conversation Cohen had with Mr. Trump. On the recording, they discussed a $150,000 deal the tabloid publisher American Media Inc. struck with one of the women, the former Playboy model Karen McDougal.

The audio was not protected by attorney-client privilege, and Mr. Davis said at the time he released it to contradict a claim that Mr. Giuliani made about what Cohen had said on the recording.

The company, which publishes The National Enquirer, bought the rights to her story and declined to publish it, a practice known in the tabloid industry as “catch and kill.”

Prosecutors have examined whether Cohen planned the payment in conjunction with A.M.I. to protect Trump’s election prospects, and they could use the recording as part of the basis for charges that the dealt with an illegal campaign contribution or weather there  was a conspiracy to make an illegal contribution.

Corporations are prohibited from spending money to influence campaigns in coordination with candidates.

Prosecutors could also determine that it was improper that a $130,000 payment to the adult film actress, Stephanie Clifford, better known by her stage name of Stormy Daniels was made to her. If so, it was to keep her quite about her supposed sexual affair with Trump.

Mr. Cohen paid Ms. Clifford out of his own pocket, and although reimbursed him many months later, the initial outlay could also count as an illegal contribution to Mr. Trump’s candidacy, several legal experts have said. Federal campaign finance laws prohibit individuals from donating more than $5,400 per election cycle to a federal candidate.

With the release of the recording, Cohen and his attorneys seemed to be signaling a willingness to cooperate with the federal prosecutors in Manhattan. Mr. Davis who is  a long-time supporter of Bill and Hillary Clinton, has said that the tape was released because Cohen is “on a new path — it’s a reset button to tell the truth and to let the chips fall where they may.”

Mr. Cohen, who once said that he would “take a bullet” for Trump and also hinted he might help prosecutors during an interview on Good Morning America in July, saying “I put family and country first.” It is obvious that he wouldn`t even “take a pea” out of a pea shooter for Trump. 

Cohen as promised; has met with Mueller staff several times and he has told them that Trump instructed him to pay off Stormy Daniels to keep her silent about her affair with Trump. That means that Trump also broke the law with respect to using campaign funds to repay Cohen after Cohen used his own money to pay the woman.

“To be crystal clear,” he added, “my wife, my daughter and my son, and this country, have my first loyalties.  There isn’t anything wrong with his first loyalty being to his family. I learned that when I was a child. However, many people have given their lives for their country.  Both decisions are honourable decisions.

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