WSJ: Cohen Under Investigation For Tax Fraud In New York

TPM Illustration. Photo by Getty Images/ HECTOR RETAMAL
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August 7, 2018 1:11 p.m.

Federal prosecutors in New York are homing in on possible tax fraud as part of their criminal investigation into the financial dealings of former Trump fixer Michael Cohen, the Wall Street Journal reported Tuesday.

A person familiar with the probe told the Journal that the possible fraud violations center on whether Cohen underreported the income he earned from his taxi medallion business on federal tax returns. Those funds amounted to hundreds of thousands of dollars Cohen received in cash.

Prosecutors from the Manhattan U.S. attorney’s office are also investigating whether employees at New York’s Sterling National Bank allowed Cohen to take out loans for that business without providing appropriate documentation, according to the report.

Cohen is under investigation for a host of financial crimes, including campaign finance violations and bank fraud. The former Trump Organization executive has signaled his willingness to cooperate with prosecutors and turn over information damaging to the president.

As TPM has reported, the once-lucrative taxi medallion business was a significant revenue stream for the Cohen family during the 2000s and 2010s. New York taxi moguls Simon Garber and Gene Freidman paid Cohen and his wife a monthly rate for managing the medallions the couple owned. The price of medallions plummeted in recent years thanks to the rise of ride-sharing apps like Lyft and Uber.

The Journal reported that federal prosecutors have subpoenaed Cohen’s former accountant, Jeffrey A. Getzel, who also served as an accountant for Freidman. Freidman earlier this year agreed to cooperate with federal prosecutors as needed as part of a lenient plea deal. The former “Taxi King” of New York pleaded guilty to one count of criminal tax evasion after an investigation into his own taxi businesses.

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