Cohen's Actions: Lawful Or Legal Loophole?

Michael Cohen, former lawyer to Donald Trump, pleaded guilty to eight criminal charges in August 2018, including tax evasion, making false statements to a federally-insured bank, and campaign finance violations. Cohen was sentenced to three years in prison and was fined $50,000. Cohen admitted to making hush money payments to two women who claimed they had affairs with Trump to keep them quiet about the alleged encounters. Cohen also pleaded guilty to an additional count of lying to Congress about efforts to build a Trump Tower in Moscow.

Lying to Congress about the Trump Tower Moscow deal

On November 29, 2018, Michael Cohen, former lawyer to then-President Donald Trump, pleaded guilty to lying to Congress about work he did on an aborted project to build a Trump Tower in Moscow, Russia. Cohen told the judge he lied about the timing of the negotiations and other details to be consistent with Trump's "political message". Cohen said he discussed the proposal with Trump on multiple occasions and with members of the president's family.

Cohen confessed in his guilty plea that he lied to Congress about the Moscow real estate deal he pursued on Trump's behalf during the heat of the 2016 Republican campaign. He said he lied to be consistent with Trump's "political messaging" and out of blind loyalty to Donald Trump. Cohen acknowledged considering travelling to Moscow to discuss the project.

In fact, the negotiations continued until June 2016, Cohen acknowledged, despite telling two congressional committees the previous year that the talks had ended in January 2016. In September 2017, Cohen also lied to the Senate about the project "to be consistent with [Trump's] political messaging".

In the course of those negotiations, Cohen spoke directly with a representative of the Kremlin press office. He said he contemplated going to Moscow himself, although in the end he never did, and he raised the possibility of Trump going to Moscow during the general election campaign to seal the deal. He said he personally briefed Trump about the project on several occasions, as well as Trump family members.

In 2015, Cohen emailed the office of Kremlin spokesman Dmitry Peskov asking for help getting the Trump Tower Moscow project off the ground. He later had a 20-minute phone call with one of Peskov's assistants and asked for help "in securing land to build the proposed tower and financing the construction". The dialogue continued over the next several months with the Republican primaries in full swing.

In early May, Cohen and Felix Sater, an executive who worked on and off for the Trump Organization, discussed having Trump visit Russia after the Republican National Convention. They also discussed the possibility of Cohen meeting in June with Putin and Russian Prime Minister Dmitry Medvedev.

Violating campaign finance law

In 2018, Michael Cohen, former lawyer and fixer for Donald Trump, pleaded guilty to eight federal crimes, including tax evasion, making false statements to a federally-insured bank, and campaign finance violations. Cohen was sentenced to three years in prison, in part for "brazen violations of the election laws" during the 2016 election.

Cohen paid $130,000 to adult film actress Stephanie Clifford, known as Stormy Daniels, and arranged for a publishing company to pay $150,000 to model Karen McDougal. Both women agreed not to go public with allegations that they had affairs with Trump. Cohen's payment to Clifford exceeded the $2,700 limit on personal contributions to a single candidate for an election. The payment he facilitated for McDougal flouted the ban on corporations contributing directly to campaigns.

Cohen's actions were in violation of the Federal Election Campaign Act of 1971, which regulates the influence of money on politics. The Act sets out certain limitations and prohibitions, including individual contribution limits to any presidential candidate, and a ban on corporations making direct contributions to presidential candidates.

The Federal Election Campaign Act (FECA) established a new government agency, the Federal Election Commission (FEC), to enforce the law. The FEC has exclusive jurisdiction over the civil enforcement of federal campaign finance law. The FEC's Office of General Counsel handles civil enforcement of violations, which can include alternative dispute resolution and administrative fines. Criminal prosecutions of campaign finance law violations are dealt with by the United States Department of Justice.

Penalties for violating campaign finance laws vary depending on the specific law broken, who broke it, the extent to which it was broken, and whether it was done knowingly. Presidential campaign finance law violations can result in up to five years in prison and $50,000 in fines.

Tax evasion

Michael Cohen, former lawyer to Donald Trump, pleaded guilty to five counts of income tax evasion, as part of a total of eight or nine charges. This included failing to report more than $4 million in income to the Internal Revenue Service (IRS) between 2012 and 2016. Cohen's income was largely related to his work with various taxicab companies, but he also failed to report hundreds of thousands of dollars worth of income from other sources, including consulting, brokering sales of real estate and a Birkin bag, and payments from taxi operators.

Cohen's tax evasion scheme involved hiding his income from his accountant and the IRS. He arranged to receive portions of his income personally, rather than through his medallion entities, to avoid alerting his accountant. Cohen also hid other sources of income, including a $100,000 payment for brokering the sale of a property in Florida, $30,000 profit from the sale of a Birkin bag, and $200,000 in consulting income. In total, Cohen failed to report more than $4 million in income, resulting in the avoidance of over $1.4 million in taxes due to the IRS.

As a result of his crimes, Cohen was sentenced to three years in prison and three years of post-release supervision. He was also ordered to pay a $1.4 million in restitution, forfeit $500,000, and pay a $50,000 fine for lying to Congress. Cohen's sentence officially ended in November 2021.

Bank fraud

Michael Cohen, former lawyer to President Donald Trump, pleaded guilty to eight counts of tax evasion, making false statements, and campaign finance violations. One of these counts involved bank fraud.

In 2010, Cohen took out a $6.4 million bank loan, using his taxi medallions as collateral. The following year, he obtained an additional $6 million line of credit, again using the medallions as collateral. He later increased the line of credit to $14 million, bringing the total amount of loans to $20 million. When Cohen applied for a mortgage on a summer home worth $8.5 million, the bank discovered the original $14 million line of credit that he had not disclosed. Cohen lied, saying that he had not used the line of credit and that he would close it. Instead, he had already rolled the line of credit into another loan.

At the end of 2015, Cohen applied for a home equity line of credit from the same bank that had given him the mortgage on his condo. He again understated his debt so that the bank would give him the loan. Lying on a bank application, even once, is against the law. Cohen obtained a $500,000 HELOC that the bank would not have approved had they known the truth.

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 Internal Revenue Service.

Lying to a bank

In 2018, Michael Cohen, former lawyer to Donald Trump, pleaded guilty to eight criminal charges, including making false statements to a financial institution. Cohen's false statements to a bank involved a series of loans and lines of credit that he obtained from various banks, which were collateralised by his taxi medallions.

In 2010, Cohen took out a $6.4 million loan from Bank-1, using his taxi medallions as collateral. A year later, he obtained a $6 million line of credit from the same bank, also using the medallions as collateral. By February 2013, Cohen had increased the line of credit to $14 million, bringing his total personal medallion liabilities at Bank-1 to over $20 million.

When Cohen attempted to obtain a mortgage for a summer home from Bank-3 in 2015, the bank discovered the original $14 million line of credit that Cohen had not disclosed. Cohen lied, stating that he had not used the line of credit and that he would close it. In reality, he had already rolled the line of credit into another loan. Cohen also understated his monthly expenses, omitting at least $70,000 in monthly interest payments due to Bank-2 on the true amount of his medallion debt.

Based on Cohen's false statements and omission of material information, Bank-3 approved him for a $500,000 home equity line of credit (HELOC) in April 2016, which they otherwise would not have approved.

Cohen's actions in misleading Bank-3 about his financial condition and obtaining a HELOC constitute lying to a bank, which is a violation of federal law. This offence carries serious consequences, as demonstrated by Cohen's guilty plea and subsequent sentencing.

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