Michael Cohen under investigation for possible tax fraud

The news comes as sources say Cohen is preparing to flip on President Trump.

Michael Cohen, former personal attorney for President Donald Trump, is reportedly being investigated for alleged tax fraud. (Photo credit: Drew Angerer/Getty Images)
Michael Cohen, former personal attorney for President Donald Trump, is reportedly being investigated for alleged tax fraud. (Photo credit: Drew Angerer/Getty Images)

President Trump’s former longtime personal attorney and “fixer,” Michael Cohen, is reportedly under investigation for possible tax fraud, the Wall Street Journal reported Tuesday.

The development comes as Cohen is reportedly preparing to tell Special Counsel Robert Mueller, who is investigating Russian interference in the 2016 election, that the president “knew about and approved” a June 2016 meeting between several Trump campaign associates and a Russian lawyer who had promised damaging information about Trump’s then-campaign rival, Hillary Clinton, months before the election, per Politico and CNN.

Cohen is currently being investigated by federal prosecutors in New York to determine whether he underreported income from his troubled taxi business on his federal tax returns, the Journal reported, citing a source familiar with the investigation. According to the source, that income may include “hundreds of thousands of dollars in cash and other payment methods over the last five years.”

Cohen was previously listed as the co-owner of the Taxi Funding Corp. in New York City, as well as a fleet of 200 taxis, according to a 2003 biography listed on the state’s Campaign Finance Board website from Cohen’s failed run for City Council. In total, he and his wife owned 32 taxi medallions in New York City — the small plaques on cabs that allow owners, or those to whom they lease the vehicles, to operate them within city limits — and 22 in Chicago.


Though medallions were once valued at up to $1 million dollars, that value has since dropped to below $200,000 due to increased competition from ride-sharing services, leaving many medallion-owners such as Cohen in a bind.

To remedy that, the Journal’s source claimed Cohen began underreporting the taxi-medallion income, in order to avoid paying federal taxes.

The source also claimed Russian-American businessman and disbarred attorney Evgeny “Gene” Freidman, who worked with Cohen and managed his taxi-medallions, sometimes paid Cohen a portion of the revenue from that taxi business using cash, keeping any profits for himself. By doing so, Cohen would arguably be able to avoid any detailed bookkeeping, enabling his alleged tax-avoidance scheme.

Friedman, long referred to as the “Taxi King,” pleaded guilty to tax fraud in May this year, in connection with his taxi business.


The Wall Street Journal also reported prosecutors are investigating allegations that Cohen overstated his income on loan documents to secure funding. According to sources familiar with the matter, investigators are specifically examining whether employees at Sterling National Bank, which financed his taxi-medallion business, “improperly allowed” Cohen to obtain loans without providing appropriate documentation, or whether Cohen “inflated” the value of his assets as collateral.

Prosecutors have subsequently subpoenaed Cohen’s former accountant, Jeffrey A. Getzel, who prepared the financial statements submitted to the bank.

Cohen has long maintained his innocence in the matter, and his lawyer reportedly declined to comment on the Journal’s report, “out of respect for the ongoing investigation.”

News of Cohen’s tax fraud investigation comes as the former Trump lawyer is reportedly considering speaking with Special Counsel Robert Mueller about a meeting between Trump campaign associates and a Russian lawyer with alleged links to the Kremlin that took place at Trump Tower in June 2016, months ahead of the presidential election.

The meeting in question involved the president’s son, Donald Trump Jr.; former Trump campaign chairman Paul Manafort, who is currently on trial over tax fraud and money laundering charges; campaign adviser Jared Kushner, who currently serves as senior adviser to the president; and five other people, including Russian lawyer Natalia Veselnitskaya, who had promised the campaign dirt on Hillary Clinton. Although Trump has claimed he was unaware of that meeting before it took place, Cohen is reportedly preparing to testify to Mueller that Trump lied.


According to CNN, Cohen claims he was in the room, “along with several others,” when Trump Jr. informed his father of the Russian lawyer’s offer, and that Trump subsequently “approved going ahead with the meeting.”

“According to people who have discussed the matter with Cohen, he has expressed hope that this claim about the Trump Tower meeting will help him reach out to Mueller and possibly lessen his legal troubles,” the outlet added.

Cohen legal woes stem from a broader investigation launched earlier this year on a referral from Mueller’s office. In April, the FBI raided Cohen’s office and residences, seizing documents related to payments he made, months prior to the 2016 election, to women who claimed to have had affairs with Trump. Agents also seized several audio recordings Cohen made of his meetings with Trump to discuss those payments, among other things.

Some experts have claimed the payments may constitute a violation of campaign finance laws.

Trump previously expressed confidence in his longtime attorney, suggesting on Twitter that Cohen would not “flip” on him, despite the heavy allegations against him. However, more recently, after one of Cohen’s audio recordings was leaked to CNN and published online, Trump’s tone shifted considerably, with the president condemning Cohen for making the recording at all.

“What kind of a lawyer would tape a client? So sad!” he tweeted on July 25.

Again, on July 27, Trump took things a step further, claiming Cohen was planning to lie to Mueller about the June 2016 Trump Tower meeting to avoid charges related to his taxi business.

“I did NOT know of the meeting with my son, Don jr.,” he tweeted. “Sounds to me like someone is trying to make up stories in order to get himself out of an unrelated jam (Taxi cabs maybe?). He even retained Bill and Crooked Hillary’s lawyer. Gee, I wonder if they helped him make the choice!”

Cohen was also recently linked with a Tennessee real-estate developer who allegedly agreed to pay Cohen $10 million if Cohen helped him obtain a $5 billion federal loan from the Department of Energy, to finance a nuclear power project. The two men reportedly reached an agreement days before the FBI raid on Cohen’s home and office in April, according to the Wall Street Journal.