Referral by Mueller launches federal probe of Cohen
Cohen is under federal investigation for possible bank fraud, wire fraud and campaign finance violations, according to a person with knowledge of the case.
Among the records seized as part of the investigation were those related to a 2016 payment Cohen made to adult-film star Stormy Daniels, who claims to have had a sexual encounter with Trump, according to another person familiar with the investigators’ work.
Investigators took Cohen’s computer, phone and personal financial records, including tax returns, as part of the search of his office at Rockefeller Center, the second person said.
In a dramatic and broad seizure, federal prosecutors collected communications between Cohen and his clients — including those between the lawyer and Trump, according to both people.
The raids — part of an investigation referred by Special Counsel Robert Mueller to federal prosecutors in New York — point to escalating legal jeopardy for a longtime Trump confidant who is deeply intertwined in the president’s business and personal matters.
Stephen Ryan, an attorney for Cohen, called the tactics “inappropriate and unnecessary,” saying Cohen has “cooperated completely with all government entities, including providing thousands of non-privileged documents to the Congress and sitting for depositions under oath.”
Among the records seized by investigators were “protected attorney client communications,” Ryan said.
The aggressive tactics by prosecutors drew the president’s ire.
As Trump sat down for dinner Monday with military leaders at the White House, he repeatedly calling the raid “a disgrace,” railing that he and his administration are the subject of unfair, baseless and misguided investigations.
“I have this witch hunt constantly going on for over 12 months now or longer,” he said. “It’s an attack on our country in a true sense; it’s an attack on what we all stand for.”
Revisiting his grievances about Mueller and Attorney General Jeff Sessions, Trump complained about what he suggested was a concerted and sometimes partisan effort to target his leadership. He noted that he has been urged to fire the special counsel, calling Mueller’s investigators “the most biased group of people.”
Dawn Dearden, spokeswoman for the U.S. attorney’s office for the Southern District of New York, declined to comment. Peter Carr, a spokesman for the special counsel’s office, also declined to comment.
One person familiar with the probe said investigators have been gathering material on Cohen, including his bank records, for weeks.
Two of the potential crimes being investigated — bank fraud and wire fraud — suggest prosecutors have some reason to think Cohen may have misled bankers about why he was using particular funds or may have improperly used banks in the transfer of funds.
Cohen has acknowledged facilitating a $130,000 payment in October 2016 to Daniels, who claims she had a sexual relationship with Trump in 2006.
Trump made his first comments about the payment last week, saying he did not know about the transaction.
Cohen has said he used a home-equity line of credit to finance the payment to Daniels and said that neither the Trump Organization nor the Trump campaign reimbursed him for the payment.
Banks don’t usually require much explanation from customers about how they use such credit lines. However, Cohen may have been asked to provide explanation for the large-dollar transfers he made when he moved the money to a shell company and then to a lawyer for Daniels.
The search requests for records related to the payment to Daniels cited investigators’ interest in possible violations of election law, according to one person familiar with the investigators’ work.
The seizure of Cohen’s records was first reported by the New York Times.
The Cohen raids required high-level authorization within the Justice Department. Under regulations governing the special counsel’s work, Mueller is required to consult with Deputy Attorney General Rod Rosenstein if his team finds information worth investigating that does not fall under his mandate to examine Russia’s interference in the 2016 election.
Rosenstein, as the acting attorney general supervising Mueller’s work, has the responsibility of deciding whether to expand Mueller’s mandate to include the new topic or to refer it to a U.S. attorney’s office.
To serve a search warrant on a practicing attorney, federal prosecutors are required to obtain approval from top Justice Department officials.
That means the acting U.S. attorney in Manhattan, Geoffrey Berman, who was appointed to his role by Sessions in January, as well as Justice Department officials in Washington, probably signed off.
Known for his combative style and fierce loyalty to Trump, Cohen served for a decade as a top lawyer at the Trump Organization.
He never formally joined Trump’s campaign but was in close contact with his longtime boss from his Trump Tower office throughout the 2016 race and presidential transition.
Cohen left the Trump Organization in January 2017, around the time of Trump’s inauguration, and since then has served as a personal attorney to the president.
To pursue criminal charges against Cohen for breaking federal election law, prosecutors would have to prove that he made the payment to Daniels to influence the election, rather than for personal reasons — to protect Trump’s reputation, for example, or his marriage.
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