Trump attorneys target Michael Cohen in heated trial fraud testimony

Former president’s attorneys launch their offensive during ex-attorney’s first day of fraud trial testimony

Alex Woodward
in New York Supreme Court in Manhattan
Tuesday 24 October 2023 22:41 BST
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Michael Cohen seeks 'accountability' with testimony in Trump's fraud trial

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Louise Thomas

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On his first day on the witness stand in his former employer’s blockbuster fraud trial, Donald Trump’s former attorney Michael Cohen ended his testimony with a heated exchange with the former president’s attorneys determined to undermine Mr Trump’s one-time “fixer” and now star witness in the sprawling case against him.

Trump attorney Alina Habba, pacing the front of a lower Manhattan courtroom with a series of direct questions on 24 October, pressed Cohen to admit he previously lied to a federal judge and asked him whether his wife knew he committed tax crimes – an exchange that drew thunderous objections from Cohen and counsel with the office of New York Attorney General, whose lawsuit threatens to blow up Mr Trump’s business empire.

“Your honour, this witness is completely out of control,” Trump attorney Christopher Kise said.

Minutes into his testimony, Cohen got to the heart of the case: The former president allegedly instructed him to craft fraudulent financial documents around an “arbitrarily elected” value of his assets and net worth.

Those so-called statements of financial condition spanning several years are central to a civil fraud trial stemming from a lawsuit that accuses the former president of defrauding banks and insurers by grossly overvaluing assets and exaggerating his net worth.

A trial stemming from the complaint entered its fourth week inside New York Supreme Court on Centre Street on 24 October.

Cohen will return to the witness stand on 25 October.

In his testimony, Cohen said he worked with former Trump Organization chief financial officer Allen Weisselberg to manipulate Mr Trump’s assets to meet his “goal” net worth in those statements of financial condition.

Cohen answered questions slowly and deliberately in a packed courtroom to explain how the former president allegedly instructed both men – who were later separately convicted on a range of tax charges and other crimes in connection with Mr Trump’s business – to craft financial documents that inflated his net worth and assets.

“I was tasked by Mr Trump to increase the total assets based upon a number that he arbitrarily elected, and my responsibility, along with Allen Weisselberg, predominantly, was to reverse engineer the various different asset classes – increase those assets – in order to achieve the number that Mr Trump had tasked us with,” Cohen said.

Asked by counsel for the attorney general’s office what that number was, Cohen replied: “Whatever number Mr Trump told us to.”

A courtroom sketch shows Donald Trump listening to his former attorney Michael Cohen testify against him during a civil fraud trial in New York Supreme Court on 24 October.
A courtroom sketch shows Donald Trump listening to his former attorney Michael Cohen testify against him during a civil fraud trial in New York Supreme Court on 24 October. (REUTERS)

Cohen later explained that the former president would call Cohen and Weisselberg to his office to discuss his statements of financial condition and review his assets.

“He would then direct Allen and I to go to Allen’s office and (not) return until we achieved the desired goal,” he said.

Those “changed numbers” would be in red ink, Cohen said.

Among the assets that Cohen was allegedly directed to inflate were several of the former president’s brand-building properties, including his Trump Tower headquarters on Fifth Avenue, Trump Park Avenue, commercial portions of 100 Central Park South, the Trump Seven Springs estate in Westchester, properties under development in Beverly Hills, the Miss Universe pageant, and “potentially other assets”, he said.

He said he was no longer involved in crafting those documents by 2016.

Cohen also described using those statements when Mr Trump was interested in buying the Buffalo Bills NFL team in 2014, “in order to demonstrate his ability to purchase the team”, he said.

(Former Deutsche Bank executive Nicholas Haigh previously testified that the financial institution “was not willing to increase its credit exposure to Donald Trump at that time”.)

The deal, or the attempt of a deal, was arranged with Mr Trump, Weisselberg, Cohen, and Jason Greenblatt.

“We had a meeting in Mr Trump’s office with members of Deutsche Bank’s team for the purpose of securing a loan that would be predicated off his assets, so that we could acquire or at least put in a bid,” Cohen said.

In one letter, Mr Trump told Morgan Stanley, which collected bids for the team: “I have a net worth in excess of Eight Billion Dollars”.

A July 2014 letter from Deutsche Bank to Morgan Stanley indicated that Mr Trump put in a $1bn bid for the sale, and that “based on our preliminary review” and his “current financial information … it is our assessment that [Mr Trump] would have the financial wherewithal” to make the purchase.

Cohen said Deutsche Bank would have made that assessment based on Trump’s allegedly fraudulent statement of financial condition, amended under Mr Trump’s direction.

Mr Kise repeatedly objected to evidence surrounding the sale. Colleen Faherty, counsel with the New York attorney general’s office, argued that her questions were well within the scope of Letitia James’s complaint, detailing how Mr Trump and others pressed financial institutions for financing based on fraudulent documents.

“I think we can all agree that Mr Trump never owned the Buffalo Bills,” Judge Engoron said.

Donald Trump talks to reporters outside Judge Arthur Engoron’s courtroom in New York Supreme Court on 24 October.
Donald Trump talks to reporters outside Judge Arthur Engoron’s courtroom in New York Supreme Court on 24 October. (AFP via Getty Images)

Ms Faherty said the evidence reflects a “pattern and practise” of fraudulent activity, with a “plethora of reasons why this evidence” is related to the attorney general’s complaint.

In 2018, Cohen pleaded guilty to tax evasion, campaign finance violations, misrepresentations to a financial institution, and lying to Congress.

Cohen also was involved with the alleged hush-money payments at the centre of a separate criminal case in New York charging Mr Trump with falsifying business records to snuff out compromising stories of his affairs in the leadup to the 2016 election.

His bombshell testimony to Congress in 2019 outlined Mr Trump’s allegedly fraudulent business practices, building on years of allegations of fraud, and prompted several criminal and civil investigations – including Ms James’s lawsuit.

Cohen said he last saw Mr Trump five years ago.

In the years after their fallout, Cohen went to jail and Mr Trump ran for re-election, lost, and was criminally indicted four times in four separate jurisdictions, with a mountain of litigation threatening not only his business but his 2024 campaign for the Republican nomination for president.

Cohen reunited with his former boss inside a courtroom packed with reporters, New York state court officers and Secret Service members.

Outside the court’s heavy wooden doors, as Cohen arrived at the courthouse, the former president lashed out at the witness, berating him as a felon who “served a lot of time for lying, and we’re just going to go in and see and I think you’ll see that for yourself.”

Moments after his testimony was interrupted by a lunch break, Mr Trump also posted quotes from Cohen on his Truth Social to undermine his testimony and criticism.

Mr Trump also baselessly called the case “election interference” that “would have been thrown out years ago” under any other judge.

“He is a Radical Left Democrat who is totally controlled by Letitia James and her Thugs,” Mr Trump wrote.

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