FBI Investigating Trump Lawyer's "Business Dealings" After Raid
After examining records and electronic devices seized from the lawyer, federal prosecutors on Friday revealed that their probe of Michael Cohen involved suspected fraud.
Federal prosecutors on Friday revealed that their probe of President Donald Trump's personal lawyer, Michael Cohen, involved suspected fraud and the attorney's personal business dealings and was going on long enough that investigators had already covertly obtained his emails.
The details in court papers came as lawyers for Cohen and Trump sought to block the Department of Justice from examining records and electronic devices, including two cellphones, seized by the FBI on Monday from Cohen's residences, office and safety deposit box.
The raids enraged Trump, who called them an "attack on the country." Trump, a Republican, sent his own lawyer to a hastily arranged hearing before a federal judge in Manhattan to argue that some of the records and communications seized were confidential attorney-client communications and off-limits to investigators.
Prosecutors blacked out sections of their legal memo in which they described what laws they believe Cohen has broken, but the document provided new clues about an investigation that the U.S. attorney's office in Manhattan had previously declined to confirm existed.
"Although Cohen is an attorney, he also has several other business interests and sources of income. The searches are the result of a months-long investigation into Cohen, and seek evidence of crimes, many of which have nothing to do with his work as an attorney, but rather relate to Cohen's own business dealings," said the filing, signed by Assistant U.S. Attorney Thomas McKay.
Prosecutors said they took the unusual step of raiding Cohen's residence and home rather than requesting records by subpoena because what they had learned led them to distrust he'd turn over what they had asked for.
"Absent a search warrant, these records could have been deleted without record, and without recourse," prosecutors wrote.
The document was filed publicly after lawyers for Cohen appeared before U.S. District Judge Kimba M. Wood to ask that they, not Department of Justice lawyers, be given the first crack at reviewing the seized evidence to see whether it was relevant to the investigation or could be forwarded to criminal investigators without jeopardizing attorney-client privilege.
Trump attorney Joanna Hendon told the judge that the president has "an acute interest in these proceedings and the manner in which these materials are reviewed." "He is the President of the United States," she said. "This is of most concern to him. I think the public is a close second. And anyone who has ever hired a lawyer a close third."
McKay, the assistant U.S. attorney, told the judge that he believed the proceedings were an attempt to delay the processing of seized material. "His attorney-client privilege is no greater than any other person who seeks legal advice," he said.
Cohen's lawyers, Todd Harrison and Joseph Evans, rejected that argument in a legal memo. They also asked that certain documents related to the case remain sealed to protect the privacy rights of "innocent third parties" who would be subjected to a media circus if their names became public.
"The documents seized by the government are uniquely sensitive because they contain documents relating to privileged communications between the President of the United States and his personal lawyer," they wrote. "The retention of such privileged information from the President presents not only routine attorney-client privilege and attorney work product issues, but also creates constitutional concerns regarding officers of the Executive Branch rummaging through the private and privileged papers of the President."
Cohen wasn't present for the hearing. The judge, who didn't immediately rule, ordered him to appear at another court hearing Monday on the issue to help answer questions about his law practice.
In forceful language, prosecutors struck back at claims by Trump and others that the Monday raids violated the attorney-client privilege between Trump and Cohen or amounted to an improper extension of the work of Special Counsel Robert Mueller.
As part of the grand jury probe, they wrote, investigators had already searched multiple email accounts maintained by Cohen. Those emails, they said, indicated that Cohen was "performing little to no legal work, and that zero emails were exchanged with President Trump."
"This court should not accept Cohen's invitation to make new law and convert a duly authorized search warrant into a subpoena," prosecutors said, calling it a "dangerous precedent" to let defense lawyers delay a probe "in a case of national interest."
In a footnote, prosecutors wrote that although the investigation was referred to prosecutors by Mueller, it was proceeding independently.
People familiar with the investigation have told the Associated Press the searches carried out Monday sought bank records, records on Cohen's dealing in the taxi industry, Cohen's communications with the Trump campaign and information on payments made in 2016 to a former Playboy model, Karen McDougal, and a porn actress, Stephanie Clifford, who performs under the name Stormy Daniels. Both women say they had affairs with Trump.
Clifford's lawyer, Michael Avenatti, spoke briefly in court. Outside court, he said: "We have every reason to believe that some of the documents seized relate to my client." Avenatti said it's "very possible" that the porn actress would show up at Monday's hearing. He then followed with a suggestive tweet that "the weather forecast for Mon looks very Stormy."
Public corruption prosecutors in the U.S. attorney's office in Manhattan are trying to determine, according to one person familiar with the investigation, if there was any fraud related to payments to McDougal and Clifford. Cohen has denied wrongdoing.
McDougal was paid $150,000 in the summer of 2016 by the parent company of the National Enquirer under an agreement that gave it the exclusive rights to her story, which it never published. Cohen said he paid Daniels $130,000 in exchange for her silence about her claim to have had a one-night stand with Trump.
The White House has consistently said Trump denies either affair.