Cohen probe looks at possible bank fraud

NEW YORK — Federal authorities investigating whether President Donald Trump’s former personal lawyer and fixer, Michael Cohen, committed bank and tax fraud have zeroed in on well over $20 million in loans obtained by taxi businesses that he and his family own, according to people familiar with the matter.

Investigators are also examining whether 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 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 Cohen would deal a significant blow to the president. Cohen, 52, worked for the president’s company, the Trump Organization, for more than a decade. He was one of Trump’s most loyal and visible aides and called himself the president’s personal lawyer after 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 to 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 are seeking to determine whether Cohen misrepresented the value of his assets to obtain the loans, which exceed $20 million.

They are also examining how he handled the income from his taxi medallions and whether he failed to report it to the IRS.

The two lenders were cited in the search warrants for raids that federal agents conducted this spring on 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. Cohen

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 may be what happens in Cohen’s case.

At this late stage of the inquiry, it is still possible that Cohen may plead guilty rather than face an indictment. He has hinted publicly and has 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 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 Cohen’s lawyers have 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 is not reached, either because Cohen and prosecutors cannot agree on the terms or because prosecutors determine he does not have valuable information or is not credible, the government would likely seek to bring charges well before the midterm elections.

If the matter is not finalized by the end of August, prosecutors probably will wait until after the election, one of the people familiar with the inquiry said in recent weeks. 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.

Cohen and his lawyers declined to comment on the investigation when contacted over the weekend and last week.

Federal officials in New York and Washington also would not comment.

In recent decades, 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, the permits that drivers need to legally operate yellow cabs in New York City.

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 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 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.