As Josh reminded us back in March, Michael Cohen is, to all appearances, “a very rich dude.”
He’s involved in a ton of businesses, including real estate, and — in the past — casino boats and a fleet of more than 200 taxis. He owned a small part in a Brooklyn restaurant that was a hang out for the Russian mob. He’s purchased quite a bit of tony Manhattan real estate, much of it in Trump-branded buildings.
So why does he need a GoFundMe to pay his legal bills?
According to his attorney Lanny Davis, Cohen is “without resources and owes a lot of money.”
Part of the problem appears to be that Cohen may not have a ton of liquidity. The fact that he paid off Stormy Daniels by taking out a home equity line of credit on one of his apartments is notable. He also put up his $9 million Trump Park Avenue home as collateral on loans related to his taxi business in April.
But his financial problems may go deeper. The New York City taxi cab business, the source of a good deal of Cohen’s wealth, is in a bad state following the rise of ride hailing apps like Uber and Lyft. Taxi medallions are now worth less than a quarter of the $1 million they once were.
His real estate may also be over-leveraged. Just because he’s buying multimillion dollar Manhattan apartments doesn’t mean he has a plan to pay the mortgages on them; and, if he did, there’s no guarantee those plans could have survived the rise of ridesharing, or Cohen’s eviction from Trumpworld post-election, or his recent legal woes. What’s more, New York real estate — and especially, fancy New York real estate — appears to be hitting a rough patch, a much-discussed fact among the city’s investors and one that, ironically for Cohen, appears to be partially triggered by the President’s tax law, which hit high-tax blue states hard. Real-estate debt could easily eat up the money Cohen was able to bring in from his assorted, non-Trump and non-taxi gigs, such as the consulting work he tried to drum up post election.
Most concretely, however, we know that he owes at least $1.4 million to the IRS in restitution as part of his plea deal. He also has to give up his New York City taxi medallions outright.