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Records: FBI was probing Michael Cohen long before raid

Michael Cohen leaves a federal courthouse in Manhattan

Michael Cohen leaves a federal courthouse in Manhattan after reaching a plea agreement with investigators on Aug. 21, 2018.  Credit: Charles Eckert

President Donald Trump’s ex-lawyer Michael Cohen was targeted for investigation partly because he misled lenders about lucrative postelection consulting deals he signed to use his influence in the Trump administration, according to search warrant records unsealed Tuesday in Manhattan federal court.

The release of nearly 900 pages of affidavits and applications to search Cohen’s office and residences last April, ordered by U.S. District Judge William Pauley after news media requests, also revealed Cohen was at one time under investigation as an unregistered foreign agent.

All references to Cohen’s role in paying off two women who alleged affairs with Trump were blacked out because of an ongoing probe of potential crimes relating to those payments. Tuesday’s disclosure focused on the government’s investigation of tax and bank-related crimes in Cohen’s personal financial affairs.

The search warrant last spring eventually led Cohen to break with Trump, allege in a guilty plea that the president ordered the payments to porn star Stormy Daniels and model Karen McDougal in violation of campaign finance laws, and offer damaging testimony to Congress last month about the president.

According to the newly released filings, the Cohen investigation dated back to July 2017, when Special Counsel Robert Mueller issued four subpoenas of Cohen's email accounts as part of the former FBI director's probe of Russian influence in the 2016 presidential race.

Mueller, the records say, was investigating Cohen for money laundering and acting as an unregistered foreign agent before referring the probe in early 2018 to Manhattan federal prosecutors, who cited only a scheme to defraud banks in their initial requests to track Cohen’s emails in February 2018.

It was not until April, just before the raid on Cohen’s home and office, that prosecutors started describing the probe as a two-pronged investigation of the hush-money payments as illegal campaign contributions as well as a scheme to defraud multiple banks beginning in 2016.

While details of the campaign finance probe are redacted, investigators said the bank fraud probe focused on $22 million in loans with Sterling National Bank and other lenders — secured by Cohen with taxi medallions that declined in value due to weakening of the taxi industry amid competition from ride-sharing services.

In attempting to renegotiate and get out of personal guarantees he and his wife, Laura, made, the government said, Cohen understated his personal finances and claimed cash flow problems but excluded key information — including consulting contracts he signed after Trump’s election that may have triggered Mueller’s foreign agent investigation.

Those contracts, the government told U.S. Magistrate Henry Pitman, included payments of $83,333 a month from Columbus Nova, an investment firm linked to Russian businessman Viktor Vekselberg; $1,099,780 from the pharmaceutical firm Novartis for consulting on the Affordable Care Act; and $600,000 from AT&T for advice on its then-pending Time Warner merger.

The affidavits described similar consulting deals with a South Korean aerospace company, KAI, for $600,000, and a bank in Kazakhstan that paid $150,000, and said they involved “consulting for international clients on issues pending before the Trump administration” that “may have” required registration as a foreign agent.

The money from the deals was funneled through a Cohen company called Essential Consultants Ltd., agents said, and produced revenue of more than $3 million over 12 months in 2017 and 2018, that Cohen hid from his lenders while claiming cash flow problems.

Cohen’s political consulting deals were revealed last year by Stormy Daniels’ lawyer Michael Avenatti after the government investigation of Cohen became public, but before Tuesday the government hadn’t said that they were a component of their initial fraud investigation.

The consulting deals also provided an intersection with the charges involving hush money, because Cohen used the bank account of the same company — Essential Consultants — to pay Daniels $130,000.

Cohen eventually pleaded guilty to tax evasion, making false statements to a bank, lying to Congress about plans for a Trump project in Moscow, and campaign finance crimes for arranging payments to Daniels and McDougal that prosecutors say were illegal donations to Trump.

He was never charged with being an unregistered foreign agent. He has been sentenced to three years in prison.

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