Cohen’s Taxi Business Associates Come Back To Haunt Him In New York Probe

August 10, 2018 6:00 a.m.

Michael Cohen has made it abundantly clear that he is open to cooperating with federal prosecutors.

This week brought news about two individuals who likely have interesting information to share with prosecutors about Cohen himself.

CNN reported that Jeffrey A. Getzel, Cohen’s former personal accountant, was in April subpoenaed to provide grand jury testimony in the Manhattan U.S. Attorney’s criminal probe into Cohen’s business dealings. Cohen shared that accountant with his former partner in the taxi medallion business, “Taxi King” Gene Freidman, who pleaded guilty to tax fraud earlier this year. Freidman is reportedly cooperating with federal prosecutors in the Cohen probe, who are examining whether Cohen, too, committed tax fraud.

This means that the government will be able to compare the accounts of two people intimately acquainted with Cohen’s business dealings and finances with information they obtained in April raids on his apartment, office and apartment building.

“An accountant is very, very pivotal in a case like this because the issue is: are they real records, are there two sets of records, can someone demonstrate the actual amount of money that came in,” a former federal prosecutor told TPM. He requested to speak on background because he is currently representing an individual involved in Special Counsel Robert Mueller’s investigation.

“Accountants flip often,” the former prosecutor added.

Cohen’s attorney Lanny Davis said that he could offer no comment due to “the ongoing investigation.”

Getzel did not immediately respond to a request for comment. A receptionist at his firm, Getzel, Schiff & Pesce, said “no comment” and slammed the phone down when TPM called on Wednesday.

Cohen’s taxi businesses emerged early as a point of interest for prosecutors. In the search warrant used for their April raids, FBI agents reportedly sought documents related to his ownership of taxi medallions in both New York and Chicago.

The former Trump fixer first got involved in the taxi business in the 1990s through his father-in-law, Fima Shusterman, and borrowed heavily from banks and credit unions to buy the once-lucrative medallions. He entrusted their management first to Ukrainian-born taxi magnate Simon Garber and then, after a falling-out in the mid-2000s, to the Russian-born Freidman, who once owned one of New York City’s largest taxi fleets.

Cohen has characterized his taxi medallions as just one of several business ventures he engaged in, minimizing his relationship with Freidman. But this week’s reports on Getzel’s subpoena serve as a reminder of just how closely linked the two are, and how both men found themselves mired in debt and unpaid taxes when ride-sharing apps caused the value of medallions to plummet in the mid-2010s.

According to the Wall Street Journal, prosecutors are assessing whether Cohen underreported the hundreds of thousands of cash payments he received from his medallion businesses on his federal tax returns.

Those installments came from Freidman, who reportedly paid Cohen a fixed monthly rate in return for managing his medallions. Freidman in May struck an astonishingly lenient plea deal with the New York attorney general’s office for his financial crimes. He was facing up to 125 years in prison on four counts of criminal tax fraud and one of grand larceny for failing to pay over $5 million in taxes. As the New York Times reported, Freidman instead pleaded guilty to one count of evading $50,000 in taxes and avoided jail time in exchange for agreeing to “assist government prosecutors in state or federal investigations.”

Cohen said at the time that he and Freidman were “not partners and have never been partners in this business or any other,” calling himself just “one of thousands of medallion owners who entrust management companies to operate my medallions.”

But Freidman last year told TPM that he and Cohen “talk daily sometimes” and were friends outside of their business relationship, regularly going to dinner with their wives. He would have valuable information to share with prosecutors about the fixed monthly sums he paid to Cohen.

So would the accountant that both men shared. The Journal reported that Jeffrey Getzel handled their financial matters, preparing many of the financial statements that Cohen submitted to banks.

Getzel’s small accounting firm in Woodbury, Long Island, specializes in servicing the taxi, cannabis, entertainment, and catering industries, among others. Its office is located in a low, black building in a nondescript office park off of the Oyster Bay Expressway, sharing space with a wholesale restaurant supply company and a few other accounting firms.

The former federal prosecutor said he wasn’t surprised that Cohen and Freidman would rely on a little-known known firm like Getzel’s.

“The taxi business has always been considered just a very dirty business,” he said. “So there are lawyers who do it, some accountants, but you’re not going to get some of the brand names or white-shoe firms or people like that. So it doesn’t surprise me that Ernst & Young are not his accountants.”

As his legal troubles mounted last spring, Freidman sued Getzel and his firm for malpractice in New York state court. Representing himself, Freidman alleged that the accountants failed to file tax returns on his behalf and improperly disclosed information to third parties. Getzel, Freidman said, was “intimately involved” in his “personal and business finances,” serving as “the de facto Chief Financial Officer” for many of his businesses.

Getzel called the allegations “frivolous” and “borderline extortion” in filings of his own. He denied providing any “financial and/or investment advice” to Freidman and provided correspondence to the court showing that the taxi baron owed his firm hundreds of thousands of dollars in outstanding payments. The matter was ultimately dismissed.

The exact nature of Getzel’s financial guidance to Cohen and Freidman will be of great interest to authorities, former prosecutors say, as will Cohen and Freidman’s dealings with Sterling National Bank, a mid-size Rockland, New York financial institution which provided large loans to both men in 2014. (An outside PR representative for the bank declined to comment).

Possible campaign finance violations stemming from the hush money payments Cohen brokered to women on Trump’s behalf have dominated news coverage, for understandable reasons. They’re salacious, and relate directly to the president.

But as former federal prosecutor Jeffrey Cramer recently told TPM, they could amount to barely a “blip” on Cohen’s record in the post-Citizens United world, where campaign finance regulations are murky and often go unenforced.

Federal tax fraud is another matter entirely.

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