Donald Trump’s attorney Michael Cohen is under criminal investigation ‘largely’ over his personal business dealings, prosecutors revealed Friday.
In court filings, the U.S. attorney’s office for the Southern District of New York, said it had raided his office, home and hotel room and broken into his safety deposit box on Monday seeking evidence of crimes after ‘months of investigation’.
But they blanked out details of what those potential crimes were – and also said that Cohen had extensive business dealings which had nothing to do with being a lawyer – then attacked him as barely ‘engaged in any significant practice of law’.
They also accused him of making untrue claims, exaggeration and fraud – and hinted that they feared he would destroy evidence if he had the chance.
The damaging blow to Trump came as he hired a new personal attorney who appeared in court Friday to try to stop the FBI and Department of Justice using material seized in a raid on the president’s long-time lawyer.
Joanna Hendon appeared at federal court in Manhattan to demand that a judge stop the government from using materials the FBI seized in a search of Cohen’s office and residence this week saying it is ‘privileged’.
The hearing in front of U.S. District Judge Kimba Wood was a bid by Cohen himself to get a temporary restraining order in the wake of the judicial warrant that authorized the search.
Criminal investigation: Trump attorney Michael Cohen is under active criminal investigation ‘largely’ over his personal business dealings, federal prosecutors revealed Friday
New representation: President Trump’ new attorney Joanna Hendonleaves court in Manhattan after asking a federal judge to block the FBI and Robert Mueller from using material seized in this week’s raid on Michael Cohen
Decision time: Federal judge Kimba Wood, a Reagan appointee, is hearing the case in which Trump and his personal attorney are both trying to block federal authorities looking at material seized from Michael Cohen in this week’s raid, which was prompted by Robert Mueller
It prompted the U.S. attorney’s office to release a 22-page response to Cohen which spelled out a series of bombshell revelations.
The filing said that prosecutors had seized his emails covertly and been through them for evidence that he really was practicing as lawyer before launching their raid.
There were ‘zero emails’ to the president it said, noting that Cohen was on the record that Trump was essentially his sole client.
It also included a redacted section in which secret evidence was presented to the court and described as ‘further belying the notion that Cohen is currently engaged in any significant practice of law’.
Cohen had also claimed that his other clients would be damaged but the United States District Attorney (USDA) filing said Cohen had still to hand over a list of who they were.
The filings revealed that FBI agents had broken into his safe deposit as well as his office, home and hotel room, and that they had seized both his cell phones.
Cohen has been told what federal criminal laws he is being investigated on suspicion of breaking, but they are being kept secret from the public.
The filings also revealed he had a deal set up with another law firm in which he would get a $500,000 ‘strategic alliance fee’ for introducing clients as well as a percentage of the fees – but the firm ripped up the deal at the start of March.
Cohen can now no longer be considered Trump’s active, current, attorney, after Hendon appeared at the hearing to say she represented Trump and that she also wanted the FBI and DoJ barred from looking at the material while the case was litigated.
Trump has ‘an acute interest in this matter’, Hendon told the court. She said access to the material should be blocked until a full court hearing on whether it is privileged.
‘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.’
Federal agents raided Cohen’s Manhattan office, home and hotel room Monday, seizing records on a variety of subjects, including payments that were made in 2016 to porn start Stormy Daniels, who claimed she had sex with Trump, and playboy model Karen McDougal, who claimed they had a year-long affair.
But Cohen’s attorneys say the material was subject to attorney-client privilege and the judge should stop it from being used.
FBI and Justice Department officials in Washington and New York have refused to discuss the case publicly or say what crimes they are investigating.
However people familiar with the investigation have told The Associated Press the search warrant used in the raids sought bank records, business records on Cohen’s dealing in the taxi industry, Cohen’s communications with the Trump campaign and information on payments made to a former Playboy model and a porn actress who say they had affairs with Trump.
Those people spoke on condition of anonymity to discuss the confidential details.
It was unclear how much prosecutors might have to reveal about the investigation in open court in the hearing which was opened briefly on Friday morning then adjourned until 2pm.
Tom McKay, the assistant district attorney leading the case urged the judge to reject the blocking move regardless of Trump’s status as president.
‘His attorney client privilege is no stronger than any other person who seeks legal advice,’ he said.
And he said Trump had had since Monday to protest and had failed to do so.
After the morning hearing Stormy Daniels’s lawyer, Michael Avenatti, said that Cohen and Trump had had a conflict of interest as soon as the raid happened.
Daniels is not directly involved in the case but Avenatti said she is co-operating with federal authorities.
Trump’s new attorney, Hendon, is a Yale law school graduate and formal federal prosecutor who has been a defense attorney in a series of trials of alleged white collar criminals.
Cohen has denied wrongdoing, while Trump has called the raids a ‘witch hunt,’ ‘an attack on our country,’ and a violation of rules that ordinarily make attorney client communications confidential.
Those confidentiality rules can be set aside under certain circumstances if investigators have evidence that a crime has been committed.
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 Karen McDougal, a former Playmate, and Stephanie Clifford, who performs under the name Stormy Daniels.
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.
The judge in the case is a Ronald Reagan appointee. But under the Bill Clinton administration she came close to being nominated as attorney general during the Nannygate scandal, when the first nominee dropped out for employing illegal immigrants.
Her name was floated but never formally nominated because she had also employed an illegal immigrant as a nanny for her son, although she had done it when it was legal to do so.
In court: Form left, Assistant US Attorney Tom McKay; Todd Harrison, attorney for Michael Cohen; and Joanna Hendon, attorney for Donald Trump make their cases
Payment raid: One of the reasons for the FBI warrant was to seek information on payments to Stormy Daniels and Karen McDougal, both of whom allege sex with Trump
Gangs all here: Stormy Daniels’ attorney Michael Avenatti arrives at federal court for the hearing. She is not formally part of the proceedings which pitch Cohen personally against the federal government
White House officials are concerned that Cohen, had taped recordings that federal investigators may have gotten their hands on during the raid on his hotel and home.
A court hearing offers the possibility they will find out if recordings have been seized.
Cohen, who served for a decade at the Trump Organization, was known to tape conversations with associates to use as leverage, and even had Trump hear some of his recordings. It was a practice the president was aware of.
‘We heard he had some proclivity to make tapes,’ said one Trump adviser to the Washington Post, who spoke about the ongoing investigation.
‘Now we are wondering, who did he tape? Did he store those someplace where they were actually seized? . . . Did they find his recordings?’
The FBI raided Cohen’s home, office and hotel on Monday.
The products of the search warrants were handed to the United States attorney for the Southern District of New York.
There have been several reports about what they were looking for in the raid, including information connected to the President involving porn star Stormy Daniels and ex-Playboy model Karen McDougal, who both received payments after sexual encounters with Trump.
It is unknown if Cohen recorded his own conversations with Trump specifically.
Cohen would frequently tout the New York law that only one party in the state had to consent to the taping of conversations.
Trump himself previously boasted he taped people, even teasing that he had taped now former FBI Director James Comey.
‘James Comey better hope that there are no ‘tapes’ of our conversations before he starts leaking to the press!’ Trump tweeted after stories surfaced saying Trump asked the former FBI director to pledge his loyalty before he fired Comey.
The White House later acknowledged there weren’t any tapes.
Legal experts told the Post taped phone conversations are a gold mine for prosecutors.
‘If you are looking for evidence, you can’t do any better than people talking on tape,’ said Nick Akerman, a former Watergate prosecutor.
Stephen Gillers, a law professor at New York University who specializes in legal ethics expanded, saying that phone conversations are particularly significant.
‘The significance is 9.5 to 10 on a 10-point scale,’ he added, noting that investigators know ‘that when people speak on the phone, they are not guarded. They don’t imagine that the conversation will surface.’
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