Cohen tied to dubious dealings
Lawyer’s troubles could double back on Trump
NEW YORK — He was a personal-injury lawyer who often worked out of taxi offices scattered around New York City. And then there was his office on the 26th floor of Trump Tower, right next to the one belonging to Donald Trump.
Before he joined the Trump Organization and became Trump’s lawyer and fixer, Michael D. Cohen was a hard-edge personal-injury attorney and businessman. Now a significant portion of his quarter-century business record is under the microscope of federal prosecutors.
Cohen’s businesses are private entities, making it difficult to get a full picture of their finances and operations. But a New York Times review of thousands of pages of public records, and interviews with bankers, lawyers and businessmen who have interacted with Cohen, reveal the degree to which he has often operated in the backwaters of the financial and legal worlds.
While he has not been charged with a crime, many of his associates have faced either criminal charges or stiff regulatory penalties. Cohen has spent much of his personal and professional life with immigrants from Russia and Ukraine. His father-inlaw, who helped establish him in the taxi business, was born in Ukraine, as was one of Cohen’s partners in that industry. An--
other partner was Russian. And Cohen used his connections in the region when scouting business opportunities for Trump in former Soviet republics.
More recently, Cohen and his father-in-law lent more than $25 million to a Ukrainian businessman who has a checkered financial record and a history of defaulting on loans. And Cohen long held a small stake in his uncle’s catering hall, which was frequented by Russian and Italian mobsters.
In addition to his legal and taxi businesses, Cohen has had a seemingly charmed touch as a real estate investor. On one day in 2014, he sold four buildings in Manhattan for $32 million, nearly three times what he paid for them no more than three years earlier.
“This is the type of person you’d see most bankers steer clear of,” said Ben Berzin, a retired executive vice president at PNC Bank who clashed with Trump in the early 1990s over loans to the future president’s troubled Atlantic City casinos. The speed with which Cohen successfully flipped real estate stands out, Berzin said. “You have to ask what’s going on.”
Robert Mueller, the special counsel investigating Russian interference in the 2016 election, had already been examining Cohen’s conduct as part of his ongoing inquiry. Last month, federal agents executed search warrants at Cohen’s home, his office and a hotel room where he was staying. The warrants sought documents related to Cohen’s business associates, among other things.
The president has long entrusted Cohen to represent him in matters both public and deeply private: real estate negotiations from Fresno, Calif., to the Republic of Georgia, and the hush-money payment to an adult-film actress who said she had had an affair with the future president. Within the Trump Organization, it was Cohen’s job to deal with Trump’s thorniest problems. But now, whatever problems investigators find in Cohen’s own array of businesses could double back on Trump.
Taxi business
The son of a Holocaust survivor, Cohen began his professional legal career at a personal injury firm in 1992, the year after he graduated from Cooley Law School in Michigan. His boss at that first job would later plead guilty to bribery.
Cohen’s marriage in 1994 gave him entree to communities of immigrants from the former Soviet Union.
His new father-in-law, Fima Shusterman, had emigrated from Ukraine in 1975. By the time of the wedding, Shusterman had landed in serious legal trouble. In 1993, he pleaded guilty to evading federal reporting requirements for large cash transactions. Shusterman cooperated with prosecutors in a related case and was sentenced to probation.
It was through his wife’s family that Cohen would be introduced to the taxi business. Shusterman initially found work as a taxi driver after arriving in the United States. By 1993, he accumulated nine taxi medallions, then worth roughly $1.5 million.
Not long afterward, Cohen began building his own taxi business, even as he was taking on personal injury work as a lawyer. He partnered with Symon Garber, another Ukrainian-born businessman, who was borrowing large amounts of money to finance taxi businesses in both Russia and the United States.
Cohen borrowed from a half-dozen banks and credit unions to buy taxi medallions. Then he used the medallions as collateral to borrow more money to buy more medallions, former colleagues said. He quickly amassed 30 medallions, each then worth about $250,000, but racked up millions in debt.
Together, the two men managed 260 cabs in the late 1990s and early 2000s, some for other owners. Drivers paid them $100 a shift. Millions of dollars in cash flowed in.
Partners’ legal run-ins
In 2007, Cohen started working for the Trump Organization. While there are varying accounts of how he met his new boss, Trump said Cohen appeared on his radar after he began buying properties in Trump buildings. For his part, Cohen has said the job came after he helped resolve a board dispute at one of the Trump buildings where his family owned several units.
Cohen became a roving fixer for Trump. In his first year on the job, he and Ivanka Trump kicked the tires on a potential golf course development project in Fresno. A year later, he was named chief operating officer of Affliction Entertainment, a mixed-martial arts venture Trump had started. Cohen traveled to the former Soviet bloc on Trump’s behalf, visiting Georgia in 2010.
While juggling his Trump duties, Cohen turned over management of his cabs to Garber in 2006 and received as much as $1 million per year, legal records show. After a falling-out with Garber, Cohen became partners with Evgeny Freidman, an immigrant from Russia who had assembled a large taxi fleet.
Both of Cohen’s taxi partners had a history of legal run-ins. Each has been made to pay more than $1 million for overcharging their drivers, according to the New York state attorney general. Former business partners also accused each of them of forging signatures, stiffing lawyers and dodging debt collection efforts.
Chicago authorities found that Garber and his taxi businesses used 180 unauthorized cars as taxis; he agreed to pay a fine of nearly $1 million.
In 2016, a federal judge found that Freidman had transferred more than $60 million into offshore trusts to avoid paying debts. In April 2017, New York City regulators barred him from continuing to manage medallions. He is awaiting trial in Albany on charges he failed to pay $5 million in taxes.
Tax debt
From 2009 to 2014, Cohen — by then a trusted member of the Trump Organization — plowed $5.7 million into 22 Chicago taxi medallions, records show.
The investments were ill-timed. The ascent of ride-hailing services like Uber and Lyft decimated the value of medallions. Since 2014, Cohen’s companies have been falling behind on taxes. Overall, his taxi businesses in New York and Chicago owe more than $375,000 for a variety of tax, insurance and inspection problems, according to records. Fourteen of his 54 cabs were suspended.
But even as the industry has buckled, Cohen has continued to use his medallions as collateral. In December 2014, with his medallions worth $35 million, he took out loans totaling at least $20 million from Sterling National Bank and Melrose Credit Union, according to a banker who reviewed the transactions.
It was unclear what Cohen has done with all the money he has borrowed in recent years. But he received some of the funds around the time he and his father-in-law, Shusterman, lent a combined $26 million to a Ukrainian immigrant and taxi-fleet operator named Semyon Shtayner, real estate records show.
Since 2012, Cohen has lent $6 million to Shtayner, whose family owns Chicago Medallion Management Corp., which manages more than 300 cabs in that city — including those owned by Cohen. The only collateral on the loans appears to be the Shtayners’ condominium in Miami, purchased in 2009 for $2.35 million.
Registering companies
Starting in 2000, Cohen set up a series of companies in New York City: two medical practices, an acupuncture office, two medical billing companies, two management companies and a transportation company.
The ventures created at a time when countless phony companies were cropping up to exploit no-fault auto insurance laws. Hundreds of doctors, businesses owners and others would eventually be criminally charged or accused of fraud by insurance companies.
The no-fault insurance schemes, often masterminded by organized crime figures from the former Soviet Union, involved staged or exaggerated car accidents, which generated a tidal wave of “patients.” Transportation companies then took the patients to what in many instances were sham medical clinics, diagnostic testing offices, and acupuncture and physical therapy offices. Billing companies were created to collect money from insurers, and management companies siphoned the funds out to the scheme’s operators.
There is no evidence that Cohen or the companies he created were part of such schemes. Nor is there evidence that Cohen did anything other than register the companies with state authorities.
The only people listed in the incorporation papers as having roles in the businesses are the two doctors, Aleksandr Martirosov and Zhanna Kanevsky, who were each affiliated with a medical practice. Both of those doctors were accused of insurance fraud in connection with different medical practices they operated.
Flipping real estate
During his time working at the Trump Organization, Cohen became a minor real estate baron in his own right. From 2011 to 2015, limited liability companies connected to Cohen purchased at least five buildings in Manhattan, public records show.
Like many of Cohen’s business dealings, the transactions were unconventional. His companies would buy a building, often in cash. Soon after, they would flip the building in another all-cash deal. Cohen told McClatchy, which first reported the transactions, that the sales were in cash to help the buyers defer taxes in other transactions.
Trump is closely monitoring the investigations into his longtime counselor. In recent weeks, he has moved to simultaneously embrace Cohen and keep him at arm’s length.
“Most people will flip if the Government lets them out of trouble,” Trump wrote on Twitter last month. “Sorry, I don’t see Michael doing that.”
A few days later, Trump asserted that the investigation was unrelated to Cohen’s work for him.
“From what I understand, they’re looking at his businesses,” Trump said. “I’ve been told I’m not involved.”