Federal investigators are probing whether President Trump's former attorney and self-described fixer, Michael Cohen, committed bank and tax fraud, reports the New York Times, citing people familiar with the matter. Authorities are reportedly zeroing in on "well over $20 million in loans obtained by taxi businesses that he and his family own."
Investigators are also examining whether Mr. Cohen violated campaign finance or other laws by helping to arrange financial deals to secure the silence of women who said they had affairs with Mr. Trump. The inquiry has entered the final stage and prosecutors are considering filing charges by the end of August, two of the people said.
Any criminal charges against Mr. Cohen would deal a significant blow to the president. Mr. Cohen, 52, worked for the president’s company, the Trump Organization, for more than a decade. He was one of Mr. Trump’s most loyal and visible aides and called himself the president’s personal lawyer after Mr. Trump took office. -New York Times
The loans under scrutiny were originated by two New York financial institutions; Sterling National Bank and Melrose Credit Union, according to business records and people with knowledge of the matter - including a banker the Times says reviewed the transactions.
In particular, New York investigators are looking into whether Cohen inflated the underlying value of his assets to obtain the loans.
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, several of the people familiar with the matter have said.
Sterling received a grand jury subpoena seeking records related to the loans, one of the people said. -New York Times
There is no indication that either bank suffered any losses due to the loans, or that Cohen missed payments - ordinarily important factors in a bank fraud case. As the Times notes, "bank fraud without a loss is rarely charged on its own," however "it is sometimes charged in conjunction with other crimes, which may be what happens in Mr. Cohen’s case."
We previously reported that according to the Journal, feds had subpoenaed Cohen's former accountant, Jeffrey A. Getzel, who had a direct hand in preparing many of Cohen's financial statements which were submitted to the banks, according to the Journal's sources. Getzel was also an accountant for Evgeny "Gene" Freidman, a taxi-medallion manager who worked with Cohen according to public court documents. Friedman is reportedly cooperating with federal prosecutors as part of the investigation, after pleading guilty earlier this year to a count of criminal tax fraud related to the taxi business.
Mr. Freidman, known as the “Taxi King,” began in around 2012 and 2013 to manage Mr. Cohen’s 32 medallions in New York, paying Mr. Cohen a fixed monthly rate and keeping the profit—or suffering any loss—from each medallion, according to a person familiar with their business relationship. -WSJ
Also per the WSJ, the FBI and Manhattan US Attorney's Office have been investigating Cohen for bank fraud, campaign-finance violations and other potential crimes related to his personal business dealings, along with efforts to conceal claims by at least two women who say they had affairs with President Trump. The president has denied having sex with either woman; former Playboy model Karen McDougal, and Stormy Daniels - a former adult film star whose real name is Stephanie Clifford.
While Michael Cohen once described himself as Trump's "fixer," Cohen has persued his own ventures - including real estate, taxi medallions and personal loans.
As of April 2018, Mr. Cohen owned 22 medallions in Chicago, and either he or his wife, Laura, controlled 32 medallions in New York City, some of which were also owned at least partly by family members and others, according to public records.
As recently as 2014, taxi medallions were considered a rock-solid investment. The medallions, issued by a city agency and required for running a taxi, are bought and sold on a secondary market. Some licenses for taxi medallions in New York sold for an average $1.25 million per medallion in 2013 and 2014, according to bankruptcy filings.
But in recent years, their value has plummeted amid competition from ride-sharing services such as Uber and Lyft. In a filing for a federal bankruptcy case in June 2017, Mr. Freidman said the estimated value of each medallion had dropped to approximately $200,000 to $225,000. -WSJ
Less than two weeks after Cohen's home, office and hotel was raided by federal prosecutors at the behest of special counsel Robert Mueller, the former Trump attorney pledged his personal residence "through a $9 million mortgage on his apartment at Trump Park Avenue" - as collateral against millions of dollars in loans from Sterling National Bank which were taken out by he and his wife in 2014 against their taxi business.