Cohen Warrants Show Prosecutors' Early Focus on Campaign Finance

Shahien Nasiripour and Greg Farrell
Cohen Warrants Show Prosecutors' Early Focus on Campaign Finance

(Bloomberg) -- Special Counsel Robert Mueller began looking into President Donald Trump’s onetime personal attorney Michael Cohen soon after beginning his investigation, newly unsealed documents show. By the time FBI agents raided Cohen properties, they show, prosecutors already had gathered considerable information about alleged campaign finance violations.

A federal court in New York released affidavits on Tuesday that were used to justify the seizure of Cohen’s emails, phones and other evidence in April 2018. By the time of the raids, Mueller had referred his findings on Cohen to federal prosecutors in the Southern District of New York.

Many portions of the exhibits are still heavily redacted, signaling areas that may still be under investigation by prosecutors in New York and elsewhere.

Key Takeaways:

* Mueller began looking into Cohen two months after his appointment. The FBI got a search warrant for Cohen’s gmail account on July 18, 2017 for emails sent and received since Jan. 1, 2016. Prosecutors later got permission to look further back, to emails from mid-2015.

* Investigators appeared to have gathered considerable information related to campaign finances, details of which are still being withheld from the public. Several of the affidavits include a section called “The Illegal Campaign Contribution Scheme,” in each case followed by more than 18 pages blocked out in gray. Cohen has since said that Trump directed payoffs, in violation of campaign-finance laws, to women who claimed to have had affairs with him. The judge in Cohen’s case said he’d allow redactions related to ongoing probes.

* Cohen lied frequently about how much money was coming in. In addition to hiding about $5 million to get better loan terms, he hid income from his firm, Essential Consultants, and interest income of about $60,000 a month on a $6 million loan he made to a person whose name has been redacted, according to the investigators.

* Cohen lied to and omitted material information as part of transactions designed to cover about $22 million he owed on taxi medallion loans from the banks, the government said. Prosecutors said the investigation revealed that Cohen lied about his income from consulting work in 2017 and significantly understated his assets.

* Cohen used the value of his taxi medallions as collateral for some $20 million in loans. As the value of medallions began to decline in 2015, Cohen renegotiated the repayment schedule, but by October 2016, he had trouble making his monthly payments. Cohen informed the banks that he had found a buyer for the medallions, which would bring him enough cash to pay the $21.4 million balance on his loans. The proposed sale never closed. Throughout 2017, Cohen’s position with the banks deteriorated, along with the value of the medallions. Sterling, one of the banks that worked with him, transferred the loan to its default unit.

* The filings also allege Cohen made a side deal for that buyer, whose name is blacked out, to pay an above market price for the medallions. That would help Cohen convince the banks that the medallion sale would allow him to repay his $20 million loan in full. In exchange Cohen agreed to pay the prospective buyer $3.8 million to make him whole. In January 2018, Cohen denied to a representative of Sterling that he had entered into any such deal, according to the documents.

* Investigators seized more than 3.7 million items from Cohen in the April 2018 raids, including numerous electronic devices, audio recordings and boxes of paper records.

* The raid captivated the nation, dominating news broadcasts and unleashing a wave of commentary about the danger records of the president’s longtime lawyer may pose to Trump, his company and his inner circle. Around the time, Cohen had said he would’ve taken a bullet for Trump. Trump publicly declared that Cohen would never betray him and chafed at the raid, tweeting "Attorney–client privilege is dead!" Over the next few months the relationship deteriorated and Cohen eventually pleaded guilty to numerous felonies and stating that Trump directed him to commit campaign-finance crimes.

* The FBI’s seizure of Cohen’s records continues to bear fruit for prosecutors. Last month, for example, Cohen testified to Congress that he’s in “constant” communication with federal prosecutors in Manhattan, who continue to probe the constellation of entities that form the Trump Organization. Cohen gave examples of Trump’s business practices that could constitute bank and insurance fraud and said there were other issues he couldn’t discuss because they were the subject of ongoing investigations. New York state authorities also have opened investigations into Trump-connected companies.

* Cohen reports to prison in May to begin a three-year sentence. He is trying to reduce his sentence by providing new information on Trump in hopes that prosecutors will ask a judge to grant him leniency.

To contact the reporters on this story: Shahien Nasiripour in New York at snasiripour1@bloomberg.net;Greg Farrell in New York at gregfarrell@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net;Heather Smith at hsmith26@bloomberg.net

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