To hear Michael Cohen tell it, Donald Trump inflated or deflated his own net worth depending on what was best for him at the time.
And according to financial documents Trump’s former lawyer filed with Congress on Wednesday, the New York developer – now the president of the United States – inflated his net worth to the tune of $4 billion while bidding to buy the Buffalo Bills in 2014.
That revelation, revealed amid a lengthy House committee hearing Wednesday, might have gotten lost amid all the talk of Trump’s payoffs to a porn star and hacking by WikiLeaks.
But Cohen’s testimony on Trump’s failed bid for the Bills stood out anyway – because they hinted that Trump might have broken the law.
Lying to a financial institution to get a loan constitutes bank fraud. In discussing Trump’s attempts to get a loan from Deutsche Bank to finance his purchase of the Bills, Cohen came close to accusing Trump of just that.
“Mr. Trump is a cheat,” Cohen told the House Oversight and Reform Committee, later adding: “It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes.”
To prove his point, Cohen gave the committee Trump’s financial statements from 2011-2013, which the billionaire developer submitted to Deutsche Bank in his 2014 attempt to get a loan to buy the Bills.
Those documents show Trump with a net worth of $4.26 billion as of June 30, 2011, and $4.56 billion a year later. But the third financial report, dated March 31, 2013, showed Trump’s net worth as $8.66 billion, largely because an additional $4 billion line item – labeled “brand value” – appeared on that last document.
Those figures stoked the curiosity of Rep. William Lacy Clay, a Missouri Democrat.
“Inflating assets to win a newspaper poll to boost your ego is not a crime but to your knowledge, did the president ever provide inflated assets to a bank in order to help him obtain a loan?” Clay asked at the hearing.
Cohen’s response: “These documents and others were provided to Deutsche Bank on one occasion in which I was with him in our attempt to obtain money so that we can put a bid on the Buffalo Bills.”
By no means was that the only time Trump provided inaccurate information regarding his finances, he said. In response to a question from Rep. Alexandria Ocasio-Cortez, a Bronx Democrat, Cohen said Trump also inflated his net worth in filings to insurance companies.
Ocasio-Cortez then asked if Congress could find documentation of that in Trump’s tax returns – which the president has refused to release but that House Democrats could subpoena.
“You’ll find it at the Trump Organization,” the president’s company, Cohen replied.
Neither the White House nor the Trump Organization replied to emailed questions about the sudden leap in Trump’s net worth during his pursuit of the Bills, which ended when the NFL approved the sale of the team to Terry and Kim Pegula in September 2014.
But if what Cohen said is true – if Trump did inflate his net worth in documents filed with Deutsche Bank – it might make the president’s legal troubles worse.
That’s because the U.S. criminal code defines bank fraud as, in part, obtaining help from a financial institution “by means of false or fraudulent pretenses, representations, or promises.” While many legal experts doubt whether a president can be indicted, the criminal code sets the punishment for bank fraud as a fine of up to $1 million, or a prison sentence of up to 30 years, or both.
The appearance of an extra $4 billion in “brand value” on Trump’s balance sheet raises questions, said Michael J. Dambra, an assistant professor of accounting and law at the University at Buffalo’s School of Management.
“It’s pretty unusual,” Dambra said.
By brand value, Trump appears to be referring to the net worth he generates by licensing his name to various products.
“But usually, you’re going to see brand value incorporated into the value of the business,” not separated out into an additional line item that suddenly appears on a financial report, Dambra said.
What’s more, Dambra noted that a lot of Trump-branded products have disappeared over time. The Washington Post reported last year that of 19 Trump-branded products that the developer identified in 2015, only two – Trump furniture and a line of Trump home goods – remained. Trump steaks, Trump deodorant and Trump underwear all went the way of Trump University: They all disappeared.
That being the case, “I’d be hard-pressed to believe those products were ever worth $4 billion,” Dambra said.
Even Rep. Tom Reed, a Corning Republican who’s usually a Trump supporter, expressed skepticism over the appearance of $4 billion in Trump brand value just before he attempted to buy the Bills.
“I could see a legitimate question being raised in regards to where that value comes from,” Reed said.
Reed added, though, that many brands have a history of being difficult to value accurately.
Cohen made his comments on Trump’s effort to buy the Bills at one of the most highly anticipated congressional hearings in years.
Cohen served as Trump’s personal lawyer from 2007 until last year. Their relationship began to fall apart last April when the FBI raided Cohen’s New York offices, and it officially ended when Cohen started cooperating with federal prosecutors last June.
Two months later, Cohen pleaded guilty to eight felony charges, including fraud and tax evasion in connection with his New York taxi business. He also pleaded guilty to a campaign finance violation tied to his role in paying Trump’s hush money to Stormy Daniels, a porn star who alleged she had a brief affair with Trump in 2006.
Cohen is set to begin a three-year prison sentence on May 6.
In response to his testimony, Trump tried to use Cohen’s guilty plea against him.
“Michael Cohen was one of many lawyers who represented me (unfortunately),” the president tweeted Wednesday morning. “He had other clients also. He was just disbarred by the State Supreme Court for lying & fraud. He did bad things unrelated to Trump. He is lying in order to reduce his prison time.”
The relationship between Cohen and Trump is far different today than it was five years ago, when Cohen served as Trump’s main spokesman in his effort to buy the Bills.
“The Bills have a rich history in Western New York, and Mr. Trump’s interest is to preserve that,” Cohen told The Buffalo News in April 2014.
At the time, Cohen gave no hint of what he told Congress on Wednesday: that his former boss played fast and loose with numbers specifying his own net worth.
On the contrary, as Trump ramped up his bid to buy the Bills in April 2014, Cohen told The News: “Mr. Trump’s wealth is far greater than what has been reported.”
Michael Cohen as plaintiff: Trump’s ex-fixer sues couple over $6M condo-backed loan
President Trump’s former attorney, Michael Cohen, is suing two Chicago taxi medallion moguls over a $6 million loan the couple allegedly failed to repay, and in which their luxury Sunny Isles Beach condo was used as collateral.
In 2012, Cohen loaned Semyon and Yasya Shtayner $2 million, with the loan backed by the couple’s penthouse at Acqualina Ocean Residences, according to the lawsuit. Cohen kept loaning them millions more and by 2015, the total debt was up to $6 million. Cohen, who was sentenced to three years in prison for lying to Congress and has been disbarred by the state of New York, is suing for the full amount owed, plus interest, default interest and collection expenses.
Cohen filed the lawsuit against the couple and the Acqualina condo association in early February. Attempts to reach the Shtayners and the association were unsuccessful.
According to a schedule included in the suit, the Shtayners were supposed to make monthly payments to Cohen of $61,250 beginning in May 2015, with the full principal due in April 2019. Those payments were never made, according to the suit.
“People who borrow money should pay it back,” said Cohen’s attorney, David Haber of Miami-based Haber Law.
That wasn’t the first time the Shtayners received millions of dollars in loans from a member of Cohen’s family. Cohen’s father-in-law, Fima Shusterman, has provided at least $20 million in loans to Yasya Shtayner, according to the Chicago Sun-Times.
Semyon Shtayner, who is now in the marijuana industry, acknowledged Cohen and his family had loaned him money in the past to finance taxi medallions, but told the Wall Street Journal last year that Cohen has not been involved in his marijuana growing business.
Semyon and Yasya Shtayner were also identified by name in the FBI warrant used to raid Cohen’s law office and home in April, CNN reported at the time. The FBI was searching for documents tied to Cohen’s businesses, including in the taxi industry.
Property records show the Shtayners paid $4.7 million for the Acqualina unit condo in 2009. Penthouse 4506 is four bedrooms and 6,419 square feet. The couple financed the purchase with $2.35 million in seller financing from developer Eddie Trump — no relation to the president. Fima Shusterman also owns a unit in the luxury tower, on the 40th floor. Cohen’s father-in-law paid about $1.5 million for his condo in 2006, the year the building was completed.
The Shtayners and Shusterman immigrated to New York City in the 1970s from Ukraine. Yasya Shtayner’s family owns Chicago Medallion Management Corp., which manages 368 taxicabs through five companies in the city, including some that Cohen own. Nearly 100 of their taxi medallions were in foreclosure as of April 2018.
Last February, The Real Deal reported that much of Michael Cohen’s wealth had been tied up in New York City taxi medallions. At the time, Cohen owned at least 34 medallions through 17 LLCs, according to a TRD analysis. In 2013, when medallion values were at their peak, those plates could sell for $1 million each. That figure has plummeted with the rise of Uber and other ride-hailing apps.
Cohen will begin serving his prison sentence in May for lying to Congress and making cover up payments to Stormy Daniels and Karen McDougal, who allege they had affairs with Trump.
Corey Johnson: Give NYC Control Of The Subways, Ban Cars On Bedford Avenue
City Council Speaker Corey Johnson wants New York City to take control of the subway system, ban automobiles from a slew of busy streets (including Bedford Avenue in Williamsburg), build more bus and bike lanes, and seriously consider removing a chunk of the crumbling Brooklyn-Queens Expressway.
Johnson outlined his aggressive proposal to remake New York’s transportation infrastructure in his first State of the City speech on Tuesday, which was accompanied by a 104-page report that attempts to wrestle with problems that have bedeviled governors, mayors, and legislators for decades.
Some of the Speaker’s proposals require state approval, like passing congestion pricing and a millionaire’s tax, and giving the city the authority to raise and lower certain kinds of taxes to meet the subway’s revenue needs. The report sometimes gives simple-sounding solutions to politically fraught, complicated issues—to lower MTA labor costs, the report suggests consolidation, improved procurement processes, and that labor and management should “work together” to find savings.
But where Albany fails on issues like congestion pricing, Johnson thinks the City can use “home rule authority” to pass it anyway. And the report acknowledges what many safe streets advocates have said throughout Mayor Bill de Blasio’s first term: the city can and should be doing significantly more to make streets safer and less congested.
“DOT has full control over our streets and has both the power and the resources to radically transform our streetscapes for increased and improved accessibility, safety, connectivity, and resilience,” the report states.
Last month, Mayor de Blasio pledged to put in 10 to 15 miles of bus lanes each year, up from 7 miles a year. Johnson wants 30 miles, and he wants to give buses transit signal priority in 1,000 more intersections.
At a City Council hearing last month, Department of Transportation Commissioner Polly Trottenberg was skeptical that the city could build 50 miles of protected bike lanes each year. Johnson’s goal is 50 miles, with “minimum design standards” for what constitutes a protected bike lane, and the ultimate goal of making 14 percent of all trips taken by New Yorkers bicycle rides by 2050 (as of 2017 it was 3 percent).
Johnson’s report also suggests using existing zoning laws to install more elevators into subway stations to increase accessibility, and addresses the fight over the DOT’s BQE repairs in Brooklyn Heights, which would close down the Promenade for at least six years. The DOT “should study alternatives to the reconstruction of this Robert Moses-era six lane highway, including the removal of the BQE in its entirety,” the report suggests. (The environmental review process for the BQE project begins later in 2019 and is expected to take two years. In meantime, the DOT says it’s looking at “a range of options.”)
Citing the success of Summer Streets, Johnson’s report says that areas in the Financial District, Chinatown, Brooklyn Heights, Bushwick, and Sunset Park should be pedestrianized or turned into shared streets. Bedford Avenue in Williamsburg is “ripe for permanent pedestrianization,” the report notes. “Critical pedestrianization efforts in New York City have taken a backseat to small-scale and incremental Vision Zero interventions, despite their success and popularity.”
Councilmember Antonio Reynoso, whose district includes portions of Bedford Avenue, told Gothamist he supported the Speaker’s proposal.
“My district currently ranks forty-sixth out of fifty-one council districts in terms of park and playground acreage. We could change this if so much space weren’t dedicated to roadways and the storage of vehicles,” Reynoso said in a statement. “Speaker Johnson’s proposal to permanently pedestrianize Bedford Avenue would reclaim open space for residents and would help bring health and wellness benefits to my community for generations to come. Furthermore, the pedestrianization would serve as a precedent in the fight to break car culture and truly prioritize pedestrians in New York City.”
Johnson’s most audacious proposal is the creation of Big Apple Transit, an entity that would control the subway and bus systems, the Staten Island Railroad, and the bridges and tunnels, and would be answerable to the mayor. (Johnson has all but announced he is running for mayor in 2021.). The MTA would retain control of the LIRR, Metro-North, suburban buses, and capital projects. The portion of the MTA that still has to service decades-old debt would be spun off into an entity that only exists to eliminate that debt.
Asked for a comment on Johnson’s proposal, Dani Lever, a spokesperson for Governor Andrew Cuomo, who controls the MTA, released this statement: “The City already owns the New York City transit system.”
While this is technically true, it is deeply disingenuous: the City leases the subways to the State, and the MTA, an agent of the state, is controlled by Governor Cuomo, who recently proved his dominance over the authority by bypassing the MTA board to scrap the L train shutdown and replace it with a different plan created by his own handpicked experts.
Former MTA Chairman Joe Lhota, a Cuomo appointee who also repeated the governor’s assertion that the MTA actually did not control the subway system, told reporters after Johnson’s speech that he supported the Speaker’s proposal.
“I proposed mayoral control of the NYC Subway in 2013 when I was a candidate for mayor,” Lhota said. “I applaud the Speaker and his vision for the City.”
Lhota said Johnson was starting what would be a long conversation but likened it to similar ones started when the city took control of schools and when the housing police were merged with the NYPD.
Richard Ravitch, a former MTA CEO and chairman, called the Speaker’s plan “a very thoughtful proposal, I just don’t agree with it.”
“He should use his growing political stature to get the governor and legislature to appoint a board to the MTA that will follow 2009 statue in respect to the governance of the MTA,” Ravitch said. “I would not suggest he look to impose more financial responsibility on the city as distinct from the region.”
Seth Stein, a spokesperson for the mayor, defended de Blasio’s record on safe streets. “The mayor has dramatically increased the installation of protected bike lanes – over 20 miles a year along major corridors – and installed 37 miles of bus lanes,” Stein said. “We appreciate the Speaker’s support of this effort, and look forward to doing even more to help New Yorkers get around our great city.”
Danny Pearlstein, the policy and communications director from the Riders Alliance, pointed to Mayor de Blasio’s announcement of bus improvements last month and told Gothamist it was a “great day for bus riders—the two million riders that are stuck right now, every day, in miserable traffic.”
“Today Corey is resoundingly seconding [the mayor’s announcement], he’s promising the bus riders they deserve much better. We’re excited to work with the mayor and council going forward to make sure these improvements are happening,” Pearlstein said.
As for City control of the subways, Pearlstein said that passing congestion pricing in Albany should be the first priority.
“Once that’s been implemented, there will be ample time for conversations to make sure that the subway never falls apart again.”
Alexandria Ocasio-Cortez hits back at New York Post’s report on her Green New Deal ‘hypocrisy’
Rep. Alexandria Ocasio-Cortez clapped back after the New York Post accused her of “hypocrisy” for promoting the Green New Deal initiative while continuing to travel in cars and planes.
“Pack it up folks, the Pulitzer’s been decided.” Ocasio-Cortez tweeted Sunday morning alongside a picture of the Post’s front page. “No one can rival this kind of hard-hitting journalism.”
The Green New Deal resolution introduced by Ocasio-Cortez aims to, among other things, “achieve net-zero greenhouse gas emissions” within 10 years, make existing infrastructure and buildings more sustainable and energy efficient, and ensure universal access to clean, air, water and food.
A “frequently asked questions” summary of the plan that was put together by Ocasio-Cortez’s office calls for the nation to “overhaul transportation by massively expanding electric vehicle manufacturing, build charging stations everywhere, build out highspeed rail at a scale where air travel stops becoming necessary, create affordable public transit available to all, with goal to replace every combustion-engine vehicle.”
The New York Post’s report suggests this goal is hypocritical given that Ocasio-Cortez’s campaign “heavily relied on those combustible-engine cars” despite being in close proximity to a subway station.
The campaign listed 1,049 transactions for Uber, Lyft, Juno and other car services, costing a total of $29,365.70 on federal filings, according to the New York Post.
The report also notes that the campaign spent $8,335.41 on 52 MetroCard transactions.
“I also fly and use AC,” Ocasio-Cortez tweeted Saturday night. “Living in the world as it is isn’t an argument against working towards a better future.”
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