Those Stories About Cohens/Shustermans Lending $26 Million Are Probably Wrong

on April 26, 2018 in New York City.
NEW YORK, NY - APRIL 26: Michael Cohen, longtime personal lawyer and confidante for President Donald Trump, leaves the United States District Court Southern District of New York on April 26, 2018 in New York City. C... NEW YORK, NY - APRIL 26: Michael Cohen, longtime personal lawyer and confidante for President Donald Trump, leaves the United States District Court Southern District of New York on April 26, 2018 in New York City. Cohen and lawyers representing President Trump are asking the court to block Justice Department officials from reading documents and materials related to his Cohen's relationship with President Trump that they believe should be protected by attorney-client privilege. Officials with the FBI, armed with a search warrant, recently raided Cohen's office and two private residences. (Photo by Spencer Platt/Getty Images) MORE LESS
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This may seem a bit in the weeds. But if you’re trying to make sense of Michael Cohen’s role in all the money transactions being probed by the Feds, as well as the role of Fima Shusterman, his father-in-law, who appears to be his key connection into the Ukrainian immigrant money world, this is an important point.

There have been various reports that Cohen and Shusterman have loaned $26 million to the Shtayner family, another taxi baron family of Ukrainian immigrants who live in New York City but own a cab business based in Chicago. The story is that Cohen lent the Shtayner’s $6 million since 2012 and Fima Shusterman has lent them $20 million over the last eight months. This is the story according to the AP and also the weekend piece in the Times.

But the original reporting on this comes from the Chicago Sun-Times and they say something significantly different. They also led with the $20 million number. But here’s the actual description of the loans in their article.

Shtayner has received eight loans from Cohen’s father-in-law, Fima Shusterman, according to documents filed with the Cook County recorder of deeds.

Early in March, the records show Shusterman made four loans worth a total of at least $8 million — possibly as much as $16 million — to Yasya Shtayner and two companies she owns, including 2737 W. Fulton LLC, named after the address where Chicago Medallion Management operates.

Last Aug 21, Shusterman gave Shtayner four loans totaling at least $12 million and possibly as much as $24 million.

As collateral, Shtayner used three luxury high-rise condos on Chicago’s Near North Side and properties in the 2700 block of West Fulton.

As you can see there are two sets of loans: one with a total value ranging from $8m to $16m and a second with a value range between $12m and $24m. In other words, the total value of all Shusterman’s loans is between $20 million and $40 million.

It’s normal to have ranges like this because public disclosure filings often require ranges of value rather than absolute values. (Federal appointee disclosures work the same way.) The Sun-Times was clear on this point. And it’s a reasonable short-hand to say $20 million because we know it has to be at least $20 million. But in subsequent reporting in other publications, this seems to have ossified to a specific number. Perhaps the Times or the AP did further reporting that confirmed that the value of the loans was the absolute lowest amount possible in the public disclosures. But that seems unlikely.

Why does it matter?

Well, mainly because $20 million is not the same as $40 million. Neither number is likely to be the actual sum. It’s somewhere in between. But these are massive sums of money for a man who has clear ties to post-Soviet organized crime, appears to be the money operator behind Cohen and has no clear means of getting that amount of money. In other words, it makes a fairly big difference if it’s $35 million vs $20 million. Again, these are massive sums of money being loaned with little apparent reason to believe they can ever be paid back.

There’s one other difference between Cohen’s and Shusterman’s loans. Cohen’s loans go back to 2012. At least through 2014, the Taxi business was booming. Shusterman’s loans are all in the last 8 months. They are to a company that appears to be on the verge of collapse; they are secured with collateral that doesn’t come close to covering the value of the loans, and they are into an industry which is itself in deep crisis. It’s very hard to explain these as economic, ones that make any sense in conventional business terms. Cohen’s maybe. Shusterman’s … there’s just no way.

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