Case Document 43-3 Filed 03/19/19 Page 1 of 67 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK 1n the Matter of a Warrant for All Content and Other Information I TO BE FILED UNDER SEAL Associated with the Email Accounts _anotnail com, AGENT AFFIDAVIT Maintained at Premises Controlled by Googlc, Inc., the Email Account 9 6 . Maintained at Premises Controlled by 8 MAG 6 Oath, Inc, and the Email Account - maintained at Premises Controlled by 1 35 1 Internet, Inc., USAO Reference No. 201 SRUOI 27 Agent Af?davit in Support of Application for a Search Warrant for Stored Electronic Communications STATE OF NEW YORK )ss. COUNTY OF NEW YORK Special Agent-of the United States Attomey?s Of?ce for the Southern District of New York, being duly sworn, deposes and states: I. Introduction A. Affiant Case Document 43-3 Filed 03/19/19 Page 2 of 67 B. The Provider, the Subject Account and the Subject Offenses 2. [make this affidavit in support of an application for a search warrant pursuant to 18 U.S.C. 2703 for all content and other information associated with the email accounts -@grnail.com (the ?Cohen Account?), (the (the Account?), (the Account?), and -@aol.com (the ?-Account?) (collectively, the ?Subject Accounts?). The Cohen Account, '?Account, and Account are maintained and controlled by Google, Inc, headquartered at 1600 Amphitheatre Parkway, Mountain View, California 94043 (?Google?), the Account is maintained and controlled by 1 1- Internet, Inc, headquartered at 1'01 Lee Road, Suite 300, Chesterbrook, 19087 35 and th-Account is maintained and controlled by Oath, Inc, 22000 AOL Way, Dulles, Virginia 20166 (?Oath?) (together, the ?Providers?). The information to be searched is described in the following paragraphs and in Attachments A, B, and to the proposed warrants. 3. As detailed below, there is probable cause to believe that the Subject Accounts contain evidence, fruits, and instrumentalitiesof violations of 13 U.S.C. 371 (conspiracy to dc?aud the United States), 1005 (false bank entries), 1014 (false statements to a financial institution), 1343 (wire fraud), and 1344 (bank fraud) (collectively, the ?Subject Offenses?). The Target Subjects of this investigation are MICHAEL COHEN (?Cohen?) and others known and unknown. This af?davit is based upon my personal knowledge, my review of doctnnents produced pursuant to grand jury subpoenas and prior search warrants, my review of interview reports prepared by other law enforcement officers, and my conversations with other law enforcement of?cers, as well as a 2 {12.28.2018 Case Document 43-3 Filed 03/19/19 Page 3 of 67 my training and experience concerning the use of email in criminal activity. Because this affidavit is being submitted for the limited purpose of establishing probable cause, it does not include all the facts Ihave learned during my investigation. Where the contents of documents and the actions, statements, and conversations of others are reported herein, they are reported in substance and in part, except where otherwise indicated. C. Services and Records of the Provider 4. I have learned the following about the Providers: a. The Providers offer email services to the public. In particular, Google permits subscribers to maintain email accounts under the domain name gmail.com. Google also allows a subscriber to maintain email accounts under any domain name under the subscriber?s control. For example, if a subscriber controls the domain name Google enables the subscriber to host any email address under this domain name on servers operated by Google. Oath permits subscribers to maintain email accounts under the domain name aol.com. 1 permits subscribers to maintain email accounts under any domain name under the subscriber?s control. For example, if a subscriber controls the domain name_? 1 1 enables the subscriber to host any email address under this domain name on servers operated by -1 1. A subscriber using the Providers? services can access his or her email account from any computer connected to the Internet. b. The Providers maintain the following records and information with respect to every subscriber account: i. Email contents. In general, any email (which can include attachments such as documents, images, and videos) sent to or ?'om a subscriber?s account, or stored in draft form in the account, is maintained on the Providers? servers unless and until the subscriber deletes the email. If the subscriber does not delete the email, it can remain on the Providers? computers 3 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 4 of 67 inde?nitely. Even if the subscriber deletes the email, it may continue to be available on the Provider?s servers for a certain period of time. ii. Address book. The Providers also allow subscribers to maintain the equivalent of an address book, comprising email addresses and other contact information of other email users. Subscriber and billing information. The Providers collect and maintain (typically unveri?ed} identifying information about each subscriber, including, for example, name, username, address, telephone number, and alternate email addresses. The Providers also maintain records coneeming the date on which the account was created, the Internet protocol address of the user at the time of account creation, the current status of the account (ag. active or closed), the length of service, and the types of services utilized by the subscriber. Additionally, for. paying subscribers, the Providers maintain records of the subscriber?s means and source of payment, including any credit card or bank account number. iv. Transactional in?rm?on. The Providers also typically retain certain transactional information about the use of each account on its system. This information can include records of login (ta, session) times and durations and the methods used to connect to the account (such as logging into the account through the Providers? website). v. Customer correspondence. The Providers also typically maintain records of any customer service contacts with or about the subscriber, including any inquiries or complaints concerning the subscriber?s account. I vi. Search history. Google and Oath also typically maintain records of any search history or web history associated with the subscriber?s account. 02232013 Case Document 43-3 Filed 03/19/19 Page 5 of 67 vii. Associated content. Googie also typically maintains content and records relating to the following applications that are associated with its e-mail accounts: (A) ?Google Docs,? which provides document-editing so?ware that can be used to create, share, store, and manage documents online; (B) ?Google Drive,? which enables users to store ?les on Google servers, where they can be accessed remotely by the user and others; and (C) ?Gchat? or ?Instant Messenger,? which provides a chat interface through which users can communicate with each other in real time. Oath also typically maintains content and records relating to AOL instant message, which provides a chat interface through which users can communicate with each other in real time. Preserved and backup records. The Providers also maintain preserved copies of the foregoing categories of records with respect to an account, for at least 90 days, upon receiving a preservation request from the Government parsuant to 18 U.S.C. The Providers may also maintain backup copies of the foregoing categories of records pursuant to its own data retention policy. D. Jurisdiction and Authority to Issue Warrant 5. Pursuant to 13 U.S.C. 2703(a), the Government may require a provider of an electronic communications service or a remote computing service, such as the Providers, to disclose all stored content and all non-content records or other information pertaining to a subscriber, by obtaining a warrant issued using the procedures described in the Federal Rules of Criminal Procedure. 6. A search warrant under 2703 may be issued by ?any district court of the United States (including a magistrate judge of such a court that ?has jurisdiction over the offense being investigated.? 18 U.S.C. 2711(3)(A)(i). 02.23.21313 Case Document 43-3 Filed 03/19/19 Page 6 of 67 7. When the Government obtains records under 2703 pursuant to a search warrant, the Government is not required to notify the subscriber of the existence of the warrant. 18 U.S.C. 2703 (3). Additionally, the Government may obtain an order precluding the Provider from notifying the subscriber or any other person of the warrant, for such period as the Court deems appropriate, where there is reason to believe that such noti?cation will seriously jeopardize an investigation. 18 U.S.C. 2705(b). E. Prior Applications 8. On or about July 18, 2017, in connection with an investigation being conducted by the Of?ce of the Special Counsel the Federal Bureau of Investigationi(?FBI?) sought and obtained from the Honorable Beryl A. Howell, Chief United States District Judge for the District of Columbia, a search warrant for emails in the Cohen Account sent or received between January 1, 2016 and July 18, 2017. On or about November 13, 2017, the FBI sought and obtained from Judge Howell search warrants for emails in the Cohen Account sent or received between June 1, 2015 and November 13, 2017, and emails in the Account sent or received between the opening of the account and November .13, 2017. The SCO has since referred certain aspects of their investigation into Cohen to the USAO, which is working with the New York Field Office. As part of that?referral, the SCO provided the USAO with emails and other content information obtained pursuant to the search warrants executed by the SCO, which had already been reviewed for privilege.1 As discussed below, this af?davit is based in part on my review of 1 In an abundance of caution, in a separate application the USAO has sought authorization, pursuant to Fed. R. Crim. P. 41, to review the emails obtained pursuant to the Prior Cohen Account Warrants for evidence related to certain additional conduct that was not the focus of the Prior Cohen Account Warrants. The emails obtained ?om the Prior Cohen Account Warrants that relate to that additional conduct do not form a basis for the instant application. 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 7 of 67 reaponsive materials produced pursuant to the July 18 and November 13, 2017 warrants (the ?Prior Cohen Account Warrants?). 9. On or about November 2017, and January 4, 2018, as well as certain prior dates, the SCO sought and obtained from Judge Howell orders authorizing and extending the installation and use of pen registers and trap and trace devices to record communications sent to or from the Cohen Account. The SCO has provided pen register data obtained pursuant to those orders to the USAO. This af?davit, as discussed below, is based in part on my review of the pen register data obtained pursuant to the November 2017 and January 4, 2013 orders (the ?Pen Register Data?). 10. On or about February 16, 2013, the USAO sought and obtained from the Honorable Debra Freeman, United States Magistrate Judge for the Southern District of New York, an order pursuant to 13 U.S.C. 2703(d) for email header information associated with the Account. This af?davit, as discussed below, is based in part on my review of email header information produced by 1 ?5 1 in response to that order (the Header Information?). 11. Probable Cause A. Overview 11. The United States Attorney?s Office for the Southern District of New York and FBI are investigating, amonglother things, a scheme-by Target Subject Michael Cohen to defraud multiple banks. Cohen is an attorney who currently holds himself out as the personal attorney for President Donald Trump, and who previously served for over a decade as an executive in the Trump Organization, an international conglomerate with real estate and other holdings. 12. The investigation has revealed that Cohen has made affirmative misrepresentations in and omittedrnaterial information from financial statements and other disclosures that Cohen provided to multiple banks in connection with a transaction intended to relieve Cohen of approximately $22 million in debt he owed on taxi medallion loans from the banks. As set forth 1? 02.23.2013 Case 1:18-cmr-00602-WHP Document 43-3 Filed 03/19/19 Page 8 of 67 in detail below, in these ?nancial statements, and in his oral and other written statements to these banks, Cohen appears to have intentionally omitted cash assets that he began receiving in 2017 from new consulting work; (ii) signi?cantly understated his total holdings of cash and cash equivalents; and failed to inform the banks from which he was seeking debt relief that he had agreed to make a $3.8 million cash payment to a third party, - in connection with - acquisition of the taxi medallions securing Cohen?s debt. By making these misrepresentations and material omissions, Cohen avoided making payments on his loans, and attempted to and had secured proposed agreements from the banks to relieve him of certain repayment obligations worth millions of dollars. 13. Based on my review of emails obtained from the Prior Cohen Account Warrants, Header Information, and documents produced pursuant to subpoenas, I have learned that Cohen has used the Cohen Account and/or Account to, among other things, communicate with and their attorney,? about the proposed transfer of Cohen?s medallions and associated debts; (ii) negotiate a pay-down of the principal amount of the taxi medallion loans; communicate with his accountant about the contents of the false financial statements at issue; and (iv) send those false ?nancial statements to banks. Additionally, i?Jsed the Account, ._Account and-Account, respectively, to communicate with Cohen about the status of the taxi medallion transaction, and to send relevant ?nancial statements to 7 banks. Accordingly, and as set forth in more detail below, there is probable cause to believe that the Subject Accounts will include evidence of the Subject Offenses. B. Cohen?s Statements to Sterling National Bank 14. As set forth in detail below, in 2014, Cohen, through limited liability corporations controlled by him and his wife, Laura Cohen, entered into a series of loans from Sterling 8 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 9 of 67 National Bank (?Sterling?) and the Melrose Credit Union (?Melrose?), secured by taxi medallions, for approximately $20 million. Though entered into by LLCs, the loans were also secured by personal guarantees in the names of both Cohen and his wife. Over time, as the taxi industry weakened and the medallions were devalued, Cohen sought to renegotiate the terms of those loans and/or relieve himself from their obligations, including the personal guarantees. As part of that effort, Cohen made a series of representations to Sterling and Melrose about his. net worth, assets, available cash, and ?nancial outlook. Speci?cally, based on my review of records maintained by Sterling and Melrose, and public sources concerning the taxi industry and the value of taxi medallions, as well as my review of reports prepared by law enforcement of?cers of interviews with a Sterling executive vice-president (the ?Sterling Employee-1?) and my participation in an interview with a Sterling employee (the ?Sterling Employee?2?), I have learned, among other things, the following: a. Taxi medallions are small metal plaques af?xed to taxis. Without a medallion, it is illegal to operate a taxi in cities with medallion systems, such as New York City. Cohen and his wife own multiple LLCs that collectively own 32 taxi medallions (each LLC owns two medallions).2 Cohen?s purchase of these New York taxi medallions was originally ?nanced by loans from Capital One Bank, for which the medallions served as collateral. Cohen was not a taxi operator, and leased his medallions to a third party. That third party made payments to Cohen, who in turn used some of those proceeds to pay his loan payments. b. In early 2014, Cohen became a customer of Sterling when he sought to re?nance a mortgage on a rental property that he owned. In or around April 2014, Cohen raised with Sterling 2 One of these companies, Mad Dog Cab Corp., was jointly owned by Sondra Cohen, who I believe is Cohen?s mother. 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 10sof 67 the prospect of re?nancing his taxi medallion loans, which were then at Capital One Bank. By in or about September 2014, Cohen began negotiating a lending transaction with Sterling that would allow Cohen to pay off his loans at Capital One and borrow more money ?om the then?increase in value of the medallions. According to Sterling Employee-1, in 2014, prior to the recent upheaval in the taxi industry?as a result of the emergence of ride?sharing services, such as Uber?taxi medallion loans were viewed by banks and investors as safe, short term credits, as the market value of taxi medallions was consistently rising. Consequently, taxi medallion loans?like the loans held by Cohen?were frequently re?nanced at increasing amounts as the value of the medallions rose. According to Sterling Employee-l, borrowers typically cashed out the increase in the loan amount and used the additional funds for other purposes. Cohen appears to have followed this approach in 2014, when he agreed to re?nance his medallion loans for approximately $22 million, which~ according to letters from Capital One Bank in Sterling?s ?les?was greater than his previous debt at Capital One Bank ($21 million, of which $14.6 million was. a line of credit to Cohen). This allowed Cohen to cash out the proceeds from the transaction. 0. Based on my review of records maintained by Sterling, have learned that on or about December 8, 2014, each of Cohen?s sixteen taxi medallion corporations entered into loan agreements and promissory notes with Sterling for the principal sum of $1,375,000, with repayment due on December 8, 2016. Each loan was signed by Michael or Laura Cohen, depending on who wasthe sole shareholder of the corporation. The loans were also each secured by a security agreement, datedthe same day, making the medallions collateral for the notes. To give Sterling additional security, Michael and Laura Cohen. signed personal guarantees and confessions of judgment, giving Sterling the right to pursue collection against the Cohens? personal assets were their corporations to default under the loan agreements. In total, Sterling agreed to lend 10 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 11 of 67 approximately $22 million to the Cohens? companies. Pursuant to participation agreements, Sterling transferred 45 percent of that debt to Melrose.3 Under the terms of Sterling?s participation agreements with Melrose, Sterling was precluded from amending or modifying the loans without the consent of Melrose. d. In evaluating Cohen?s requested re?nancing of the taximedallions, Sterling (and Melrose, consistent with its participation in the deal) conducted due diligence. At Sterling?s request, Cohen provided Sterling with a statement of ?nancial condition, dated August 1, 2014 (the ?August 2014 Financial Statement?), which indicated that Cohen had $100,740,000 in total assets, $23,550,000 in total liabilities, and a net worth of $77,190,000.4 From my review of Va Sterling credit memorandum, dated September 29, 2014, I know that Sterling viewed the transaction favorably because, accounting for loan payments, cash ?ows from the medallions were projected to be positive, the value of the collateral (as estimated by Sterling) exceeded $42 million, and the net worth of Cohenmwho was the direct obligor under the guarantee agreements?was over $77 million. An internal Sterling credit and risk rating analysis report, dated October 20, 2014, recommended approval of the loans for substantially the same reasons. e. Based on my review of records maintained by Sterling and public sources, I have learned that over time, the collateral backing Cohen?s loans (taxi medallions) lessened in value due to the rise in ride-sharing companies and signi?cant devaluation of taxi medallions. Additionally, Cohen began falling behind on loan payments to Sterling and Melrose. ?1 know from records maintained by Sterling and an interview with Sterling Employee?2 that, beginning in or around 3 Melrose, which had a business principally focused on taxi medallion loans, is now in conservatorship by the National Credit Union Administration 4 Cohen subsequently provided Sterling with a revised statement of ?nancial condition, also dated August 1, 2014, which reported assets of $99,420,000, total liabilities of $23,5 50,000, and a net worth of $75,870,000. 11 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 12 of 67 September 2015, Cohen told Sterling, in sum and substance, that the individual leasing Cohen?s medallions had fallen behind in making payments to Cohen, and that as a result, the cash ?ow from his taxi medallions had been reduced, leaving him with a shortfall of approximately $16,000 each month. For instance, I have reviewed an email frOmiSterling Employee?2, dated September 9, 2015, summarizing a call with Cohen?which'according to the email and toll records for Cohen?s cellphone occurred on September 8, 2015?during which Cohen told Sterling Employee-2, in sum and substance, about his cash ?ow problems and a shortfall of approximately $16,000. hithat same email, Sterling Employee?2 commented that despite Cohen?s statements, his personal financial information ?indicate a strong ability to make up the difference in payments.? Cohen, however, according to Sterling Employee-2, pushed the bank for a reduction in Cohen?s payments. i f. From my review of records maintained by Sterling and my participation in an interview with Sterling Employee-2, I have learned that Cohen and Sterling Employee-2 spoke again on September 28, 2015, and that during the call Cohen stated, in sum and substance, that the individual to whom Cohen leases the medallions had again reduced payments to Cohen. 1 know from my review of records maintained by Sterling that between in or about September 2015 and November 2015, Sterling raised the possibility?mboth internally and with Cohen?of Cohen posting his real estate holdings, personal residence, or some other collateral as additional security for the banks. According to these records, however, Cohen resisted these requests. From my review of loan documents and records maintained by Sterling, I know that in or about November 2015, as a result of Cohen?s representation that he was not earning suf?cient returns on his medallions to cover interest payments, Sterling and Melrose agreed to amend their loans with Cohen by, 12 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 13 of 67 among other things, reducing the interest rate Cohen paid to Melrose and extending the loan maturity date to DeCember 8, 2017. g. I know from interviews with Sterling Employee-1 and Sterling Employee-2, as well as emails I have reviewed, that in or about October 2016, Cohen told Sterling Employee?1 that Cohen had a potential buyer of his taxi medallions, named -who would agree to assume Cohen?s debt with Sterling and Melrose. Based on my review of records maintained by Sterling, as well as the interviews with Sterling Employee?1 and Sterling Employee?2 referenced . above, Iknow that by or before October 2016, Cohen had entered into negotiations to sell his sixteen corporate taxi medallions to for the balance of the loans, which at the time was $21,376,000. I know from my review of records maintained by Sterling, and my participation in an interview with Sterling Employee-2, that as a condition of the transfer of the medallion loans?and because Sterling was unfamiliar with- ??Ster1ing requested that Cohen make a substantial principal payment on the loan, ,of approximately one million dollars, prior to the transfer. Cohen rejected this request initially. But on or about January 31, 2017, Cohen told Sterling Employee-1, in sum and substance, that he would make a one million dollar principal reduction payment in order to move forward with the medallion transfer deal with - Indeed, in an email sent from the Cohen Account to Sterling Employee-2 on or about February 22, 2017, Cohen confirmed that he ?agreed to pay down 1 million from the loan amount.? h. Pursuant to the participation agreements between Sterling and Melrose, Sterling was required to secure Melrose?s agreement-to participate in the transfer of the taxi medallion debt from Cohen to On or about April 17, 2017, Sterling sent a memorandum to . Melrose summarizing the terms of the proposed transaction, and noting the requirement that 13 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 14 of 67 Melrose agree to the terms. On or about May 2, 2017, emailed Sterling Employee-1 from the _Account to inquire about the status of the transaction. Sterling Employee-1 responded to at the _Account that Melrose had agreed to the deal, and that Sterling would be sending a term sheet shortly. I i. In order for the banks to evaluate the proposed transaction fully, they requested ?nancial information from the parties. On or about October 26, 2016, a Sterling employee emailed the .-Account about the ?Cohen Medallion Purchase,? and stated order to proceed with the assumption of Michael?s loans,? Sterling needed certain ?nancial information _1t the _Account, that he would send a ?nancial statement and tax returns shortly. Additionally, on or about June 7, 2017, Sterling Employeel emailed Cohen to request an ?updated personal ?nancial statement,? completed jointly with Cohen?s wife, and Cohen?s most recent federal income tax return. On or about June 3, 2017, Cohen emailed Sterling Employee-1 from the Cohen Account, attaching a Sterling personal ?nancial statement form that had been ?lled out by hand, which referenced a statement of ?nancial condition, dated May 1, 2017 (the ?May 2017r Financial Statement?), that was also attached. The May 2017 Financial Statement included a cover letter from Cohen?s accountan- stating, in sum and substance, that the information in the statement came from Cohen and that -:1ad not con?rmed its accuracy or completeness. The May 2017 Financial Statement stated that Cohen had total assets of $41,955,000, total liabilities of $39,130,000, and a net worth of $2,325,000. The May 2017 Financial Statement indicated that Cohen?s assets were comprised of $1,250,000 in 14 02232013 Case Document 43-3 Filed 03/19/19 Page 15 of 67 cash, $26,155,000 in closely held companies (such as the taxi medallion entities and his real estate holdings), $3,200,000 in real estate mvesnnents, and his $11,000,000 personal residence. j. Based on my review of reports of law enforcement interviews of Sterling Employee~1 I have learned that Sterling Employee? 1 reviewed each line of the May 201? Financial Statement with Cohen to, among other things, verify its accuracy, and Sterling Employee-l asked Cohen about the cash amount listed on the May 2017r Financial Statement. Cohen stated to Sterling Employee-1, in sum and substance, that the May 201 2 Financial Statement was accurate. On or about August 16, 2017, Sterling Employee-1 emailed Cohen at the Cohen Account and at the -Account, attaching a non-binding term 1 sheet memorializing the potential transaction between Sterling, Mclrose, Cohen, and - - On or about August 29, 2017, .emailed Sterling Employee-1 from the- Account, requesting that he be included on ?all future e-mails to andfor - - concerning this matter,? and providing propo'sededits to the term sheet. On or about August 30, 2017, Sterling Employee] emailed _at the Account, Cohen at the Cohen Account, and 2- at the -Account, and provided them with a revised term sheet. On or about September 5, 2017, Sterling Employee-1 sent? at the ._?tccount, Cohen at the Cohen Account, and-at the .account a copy of the executed term sheet. According to the term sheet, would borrow $20,000,000 from Sterling and Melrose, to be secured by the medallions that -was to acquire from Cohen. - 1. As part of the agreement, according to the term sheet, $1,265,913 in principal (which is what would remain after the $20,000,000 payment on the outstanding loan balance) would be repaid by-Cohen and the two banks, with Cohen paying ?fty percent and the banks dividing the 02.23.2013 A .. .. Case Document 43-3 Filed 03/19/19 Page 16 of 67 remaining half of the balance. Based on my review of an internal Sterling credit memorandum, dated October 4, 2617, the parties reached a preliminary agreement that Cohen would pay $632,956 of the remaining $1,265,912 principal loan balance, and Sterling and Melrose would absorb $357,167 and $275,789 respectively in the form of charge?offs. According to Sterling Employee- . 1, Sterling was willing to divide the repayment of the outstanding principal balance?despite its prior insistence that Cohen make a principal pay-down of at least one million dollars?because . Cohen represented on a telephone call with Sterling Employee-l, in sum and substance, that he had insuf?cient liquidity to pay the full outstanding principal balance. As part of the agreement, Sterling and Melrose also agreed to relieve Cohen and his wife of the personal guarantees that they made on behalf of the LLCs. Thus, after completing the -transaction, Cohen would no longer I have had any outstanding obligations to Sterling or Melrose. m. Based on my review of emails sent by Sterling employees, I have learned that because the transaction between the parties was subject to full credit underwriting by Sterling and Melrose (as well as Melrose?s regulators at NCUA), in August and September 2017, Sterling required and requested-additional financial statements for Cohen and - for its credit underwriting process. In response to Sterling?s requests, on or about October 5, 2017, 2- - sent from the Account to a Sterling employee a copy of i- - personal ?nancial statement. The ?nancial statement lists the? Account as the email contact for?. Additionally, on or about October 5, 2017, Cohen, using the Cohen Account, re-sent Sterling Employee?2 a copy of his May 2017 Financial Statement. A day later, on October 6, 2017, Cohen, using the Cohen Account, emailed Sterling Employee?2 a statement of ?nancial condition, dated September 30, 2017 (the ?September 2017 Financial Statement?). 16 02.28.2018 . Case Document 43-3 Filed 03/19/19 Page 17 of 67 11. Like the May 2017 Financial Statement, the September 2017 Financial Statement included a cover letter from- Cohen? accountant, stating, in sum and substance, that the information in the statement came from Cohen, and that -1ad not con?rmed its accuracy or completeness. The September 2017 Financial Statement stated that Cohen had total assets of $33,430,000, total liabilities of $45,630,000, and a negative net worth of $12,200,000. Notably, unlike Cohen?s May 2017 Financial Statement, the September 2017 Financial Statement represented to Sterling that Cohen had a negative net worth. The September 2017 Financial Statement indicated that Cohen?s assets were comprised of $1,250,000 in cash, $17,630,000 in closely held companies (such as the taxi medallion entities and his real estate holdings), 5 $3,200,000 in real estate investments, and his $11,000,000 personal residence (which, for the ?rst time, he indicated was held in trust). The September 2017 Financial Statement included assets and liabilities not held in Cohen?s name, such as various entities associated with his taxi medallions and some? of his real estate investment entities. 0. From my participation in an interview with Sterling Employee-2, and my review of records maintained by Sterling, I have also learned that at or around the time Cohen provided Sterling with these ?nancial statements?in or around September 2017?Cohen stopped paying loan payments on his taxi medallion loans altogether. According to Sterling Employee- 2, Cohen informed Sterling, in sum and substance, that he had insuf?cient funds to pay the principal and interest payments on his medallion loans. By in or about December 2017, Sterling and Melrose had not been paid approximately $276,937.92 in principal and interest payments on the medallion loans. Based on Cohen?s ?nancial condition as conveyed in the 5 Notably, the September 2017 Financial Statement valued each of Cohen?s thirty?two New York taxi medallions at approximately $180,187.50, which was considerably less than the $650,000 valuation ascribed to each medallion in the . 17 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 18 of 67 September 2017 Financial Statement, and his delinquency in making payments to Sterling, among other things, the bank?s credit underwriting committee determined (and memorialized in a December 2017? memorandum) that the Cohen-?- transaction was favorable for the bank that is, that -would be a better borrower than Cohen. p. On or about December 26, 2017, Sterling sent Cohen a demand letter requesting the immediate receipt of past-due loan payments. On December 29, 2017, Sterling sent Cohen a letter stating that he was in default under the loans between Sterling and Cohen?s medallion corporations. Cohen did not malte an immediate payment on the loans, but instead sent an e?mail to Sterling Employee?l on or about January 24, 2013, from the Cohen Account, stating that during the closing of the CohenJ- transaction, Cohen would ?bring all payments up to date as well as deposit the payoff differential.? Cohen also requested by email sent from the Cohen Account on anuary 24, 2018, that at the closing of the Cohen?- transaction, Sterling provide a letter stating that all of Cohen?s debts have been satis?ed and that Cohen?s personal guarantees of the medallion loans had been terminated. q. The Cohen-?- transaction, however, did not close. On or about January 29, 2013, -the -attomey, emailed attorneys for Sterling from the-account and stated that ?at this time there is no deal with Michael Cohen. Some of the numbers have changed and we are not prepared to go forward.? . r. Based on my participation in the interview with Sterling Employee-2 and my review of records maintained by Sterling, I know that after the Cohen-- deal fell apart, - Sterling assigned Cohen?s loans to an employee at Sterling who specializes in collecting on defaulting loans (?Sterling From my review of telephone call notes, I know that Sterling Employees3 spoke to Cohen on or about January 30, 2018 about paying donor andfor 8 02.232013 Case Document 43-3 Filed 03/19/19 Page 19 of 67 restructuring Cohen?s outstanding taxi medallion loans. Based on my review of an email between Sterling Employee-3 and Cohen, 1 know that on the January 30, 2018 call, Cohen stated that he would send a ?corrected current? version of his personal ?nancial statement. Following that call, on or about January 31, 2018, Cohen emailed Sterling Employee?3 from the Cohen Account a copy of the September 2017 Financial Statement. Later that day, Cohen again emailed Sterling Employee~3 from the Cohen Account and proposed paying $500,000 to bring the loans current and $750,000 to bring the principal balance to $20,500,000. Cohen also suggested revised interest payment amounts. On or about January 31, 2018, Sterling Employee-3 responded to A Cohen at the Cohen Account and stated, in sum and substance, that Cohen would need to pay the entirety of the overdue payments and pay down the principal balance of the loan to $20,000,000 (in total, a payment of approximately $1,750,000), and would need to make larger interest payments. I 5. On or about February 1, 2018, Cohen emailed Sterling Employee-3 from the Cohen Account and proposed ?[p]ayment of $1.250m which ALL can be used to pay down principal, if [Sterling] will waive past due amounts,? but stated do NOT have more than the $1.250m.? (Emphasis in original.) Cohen also stated, in sum and substance, that he had insuf?cient ?nancial resources to post additional collateral or pre~fund payments. Based on my participation in an interview with Sterling Employee?2, I have learned that Sterling continues to renegotiate the I medallion loans with Cohen based on Cohen?s representations about his current ?nancial position. 19 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 20 of 67 C. Cohen Made Material Misrepresentations About His Finances to Banks Cohen Concealed from Sterling and Melrose Cash Derived from Consulting Work 15. As set forth in detail below, despite multiple representations by Cohen to Sterling (and, by extension, Melrose?i) that he had insufficient funds to pay down the principal balance of the medallion loans, make interest pawnents, or pay past-due amounts, it appears that between 2016 and the present, Cohen opened and maintained bank accounts at First Republic Bank (?First Republic?), and then received millions of dollars in purported consulting payments in these accounts, which he did not disclose to Sterling. Cohen set up these accounts and received these funds during the very period in which he made disclosures to Sterling about his personal finances (including his assets and liabilities) and his ability to make payments on the medallion loans. In these disclosures to Sterling?and despite being asked about these bank accounts by his accountanthohen withheld information about liquid ?nancial assets at First Republic. 16. Speci?cally, based on my review of documents and bank records produced pursuant to a subpoena by First Republic, and my participation in and review of reports of interviews with two First Republic employees, I have learned, among other things, the following: a. Cohen and his wife have been customers of First Republic since approximately June 2011. Cohen controls several checking and loan accounts, some in his own name and others in the names of corporate entities. 5 Based on my review of a report of an interview conducted with an employee of Melrose, 1 have learned that, pursuant to the participation agreement between Sterling and Melrose, Cohen?s ?nancial statements and other records in Sterling?s possession were forwarded to Melrose so that Melrose could make a detennination as to whether to approve of the Cohen- transaction. Based on my review of repotts of interviews with Meimse employees, 1 also know that Cohen called employees at Molrose regarding the Cohen- transaction. 20 02.23.2013 Case Document 43-3 Filed 03/19/19 Page 21 of 67 b. On or about October 26, 2016, in Manhattan, New York, Cohen opened a new checking account at First Republic in the name of Essential Consultants LLC (the ?Essential . Consultants Account?). Cohen was the only authorized signatory on the account. When Cohen opened the Essential Consultants Account, a First Republic employee (?First Republic Employee- conducted an in-person interview of Cohen. In response to a series of know-your?custcmer questionsT about the purpose of the account?the answers to which First Republic Employee-1 entered into a formL-Cohen stated, in sum and substance, that he was opening Essential Consultants as a real estate consulting company to collect fees for investment consulting work, and all of his consulting clients would be domestic individuals based in the United States. Cohen also stated, in sum and substance, that his purpose in setting up the account was to keep the revenue from his consulting business?which he said was not his main source of income?separate from his personal ?nances. As set forth below, there is probable cause to believe that Cohen?s statements about the intended pUrpose of the account and source of funds for the account were false. Speci?cally, the account was not intended to receive?and does not appear to have received?money in connection with real estate consulting work; in addition, the account has received substantial payments from foreign sources. 7' Certain ?nancial institutions are required to conduct such procedures pursuant to the Bank Secrecy Act and its implementing regulations. See 31 U.S.C. 5318; 31 C.F.R. 1020.220. 3 First Republic Employee-1 ?rst ?lled out the form on the day he interviewed Cohen, October 26, 2016. On or about December 19, 2016-, at the request of bank compliance personnel, First Republic Employeeal updated the form to add more detail about Cohen?s statements. 2] 02.23.2013 Case Document 43-3 Filed 03/19/19 Page 22 of 67 d. Second, Iknow from my review of First Republic bank records that were scheduled by an FBI forensic accountant that after Cohen opened the Essential Consultants Account, Cohen received payments into that account from foreign'businesses and entities that do not re?ect the stated client pro?le for the residential and commercial real-estate consulting services. Speci?cally, from my review of the Essential Consultants Account schedule and public sources, 1 know the following: i. Beginning on or about January 31, 2017, Cohen began receiving payments of $33,333 from an entity called Columbus Nova LLC, which were deposited into the Essential Consultants Account. According to public sources, Columbus Nova is an investment management ?rm controlled by Renova Group, an industrial holding company based in Zurich, Switzerland that is controlled by Russian national Viktor Vekselberg. From January 201? to August 2017, the Essential Consultants Account received seven payments totaling $583,332.93 from Columbus Nova LLC. 22 02.23.2013 Case Document 43-3 Filed 03/19/19 Page 23 of 67 ii. Beginning on or about April 5, 2017, Cohen began receiving payments from Novartis Investments, SARL, which I believe to be the in-house ?nancial subsidiary of the Swiss pharmaceutical company Novartis International AG (?Novartis?). Between April 2017 and January 12018, the Essential Consultants Account received ten wire payments from a Swiss bank account held in the name of Novartis, each in the amount of $99,980, for a total of $999,800. Beginning in or about April 2017, the Essential Consultants Account started receiving wire payments from a bank account associated with the telecommunications company Inc. Speci?cally, on or about April 14, 2017, wired $100,000 to the Essential ConsultantsAccount and, ?om in or about June 2017 to in or about January 2018, the Essential Consultants Account received nine $50,000 payments from In total, wired $550,000 to the Essential Consultants Account. iv. On or about May 10, 2017, June 9, 2017, July 10, 2017, and November 27, 2017, the Essential Consultants Account received four deposits in the amount $150,000 (totaling $600,000) from a bank account in South Korea. The account holder from which the money was sent is Korea Aerospace Industries Ltd. KAI is a South Korea-based company that produces and sells ?xed?wing aircraft, helicopter aircraft, and satellites to the United States Department of Defense, among other customers. v. On or about May 22, 2017, the Essential Consultants Account received a $150,000 deposit from an account at Kazkommertsbank, a Kazakhstani bank. The listed account holder at Kazkommertsbank was a second Kazakhstani bank named?BTA Bank, A0. A message accompanying the wire payment indicated that the payment was a consulting fee as per Inv DD May 10, 2017 consulting agreement DD 08 05 2017 CNTR 08/05/2017.? 23 02.28.2018 Case Document 43-3 5 Filed 03/19/19 Page 24 of 67 vi. In total, from on or about January 31, 2017 to on or about January 10, 2018, the Essential Consultants Account received approximately $2,883,132.98 in transfers and checks from the aforementioned entities. As of on or about January 10, 2018, the balance in the Essential Consultants Account'was $1,369,474.23. e. On'or about April 4, 2017, Cohen opened another newchecking account at First Republic, this one in the name of Michael D. Cohen Associates, PC. (the Account?). Cohen was the only authorized signatory on the account. Among other things, the Account received ten wire transfers and one check ?om an account in the name of Squire Patton Boggs, a law ?rm. In total, from on or about April 5,2017, to on or about January 2, 2018, the Account received $426,097.70 in deposits, and the balance in the account as of January 2, 2018, was $344,541.35. As discussed below, Cohen never disclosed any of the balance in the Essential Consultants or accounts to Sterling during the negotiations with respect to the - transaction, including in his May 2017 Financial Statement and September 2017 Financial Statement. 17. Based on my review of emails from the Cohen Account that were seized pursuant to the Prior Cohen Account Warrants, and my review of reports of interviews with employees of and Novartis, it appears that the aforementioned payments to the Essential Consultants Account and Account ostensibly were for political consulting work, including consulting for international clients on issues pending before the Trump administration.10 Specifically, from my review of emails from the Cohen Account and public sources, I have learned the following: 10 Based on my review of public sources, I have learned that Cohen is not registered as a lobbyist or as a person acting as an agent of foreign principals, as may have been required by the Foreign Agents Registration Act. 24 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 25 of 67 a. On or about April 28, 2017, Cohen sent an email from the Cohen Account to an individual whom I believe is af?liated with KAI. In the email, Cohen attached a document purporting to be a ?Consulting Agreement? between KAI and Essential Consultants dated as of about May 1, 20.17. The document indicates that Essential Consultants would render ?consulting and advisory services, as requested? by KAI, and that KAI would pay Essential Consultants ?a consulting fee of One Million Two Hundred Thousand US Dollars,? disbursed through eight $150,000 installments between Mayl2017 and December 2017. b. On or about May 10, 2017, Cohen sent an email ?om an alternate email address, copying the Cohen Account, to an employee of BTA Bank. To the email, Cohen attached an invoice to BTA Bank in the name of Essential Consultants. The invoice contemplated a $150,000 payment to Essential Consultants for a consulting fee.? c. On or about February 13, 2017, Cohen emailed an employee from the Cohen Account what appears to be a consulting agreement, which contemplates that Essential Consultants ?shall render consulting and advisory services to and that would ?advise [Essential Consultants] of those issues and matters with respect to which Services desires [Essential Consultants]?s assistance and advice.? The contract calls for ?to pay the Consultant for his services . . . a consulting fee of Fifty Thousand ($50,000) Dollars . . . per month.? Based on my review of reports of interviews with employees, I have learned that retained Cohen to consult on political issues, including net neutrality, the merger between and Time Warner, and tax reform. d. Onor? about January 17, 2017, Cohen emailed to a representative of Novartis from . the Cohen Account a contract; between Novartis and Essential Consultants, which provides that Essential Consultants will ?provide consulting and advisory services to Novartis on matters that 25 02.28.2018 Case Document 43-3 Filed 03/19/19 Page 26 of 67 relate to the repeal and replacement of the Affordable Care Act in the US and any other issues mutually agreeable to [Essential Consultants] and Novartis.? The contract provides for a ?consulting fee of One Million Two Hundred Thousand ($1,200,000) US dollars,? to be paid to Essential Consultants in even installments over the course of a year. Based on my review of reports of interviews with Novartis employees, I have learned that Novartis retained Cohen to provide political consulting services and to gain access to relevant policymakers in the Trump Administration. c. On or about April 3, 201?, Squire Patton Boggs, a law ?rm, announced on its website that is had formed a ?strategic alliance? with Michael D. Cohen 85 Associates and would cr?jointly represent clients.? 13. Despite the significant amount of money that Cohen received into the Essential Consultants Account and the Account, and the cash balance in both accounts, Cohen did not disclose that information to Sterling or Melrose. Speci?cally, based on my review of documents provided by - and my review of notes and a? I have learned the following: a. In or about May with Cohen at a law ?rm in Manhattan, New York. At the meeting, Cohen told- in sum and substance, that he had set up a law practice called Michael D. Cohen Associates P.C., and a consulting company called Essential Consultants LLC. Cohen told- in sum and substance, that he expected to earn $75,000 per month in connection with. his law practice, and that he expected gross revenues for the consulting business to be between ?ve and six million dollars annually. b. In or about October 201?, if not earlier, .was preparing a personal ?nancial statement for Cohen. On or about October 6, 2017, - sent an email to Cohen at the Cohen 26 02.232013 Case Document 43-3 Filed 03/19/19 Page 27 of 67 Account in which -wrote that ?[a]ttached is a draft of the new PFS as of September 30, 2017? and attached a draft of the September 2017 Financial Statement. The draft statement re?ected that as of September 30, 2017, Cohen had only $1,250,000 in cash, total assets of approximately $33,430,000 (comprised oftaxi medallion interests, real estate interests, and his personal residence and property), and liabilities of approximately $45,630,000, leaving him purportedly over $12 million in debt. In the same crumb-questioned Cohen, in sum and substance, about the fact that the ?nancial statement did not list any assets associated with either the Essential Consultants Account or the Account: did not add any value for you We operating entities Michael D. Cohen Associates POC [sic] and Essential Consultants LLC. Please advise whether or not these should be disclosed and what value.? c. On or about October 6, 2017, Cohen called -by telephonemwhieh is re?ected on toll records for Cohen?s cellphone?and told - in sum and substance, not to include Essential Consultants or WCSCA in the September 2017 Financial Statement because they had no value. d. On or about October 6, 201?, following the call with-Zohen, using the Cohen Account, responded to - email with the answer ?[1]ooks goodlto me.? Cohen never directed - to make any changes to his cash position as listed in the September 2017 Financial Statement. Neither Essential Consultants nor was listed on the September 2017r Financial Statement that was provided to Sterling. I I 19. Based on the foregoing, and from my review of bank records and emails sent by Cohen to Sterling, I know that the September 2017 Financial Statement made no mention whatsoever of assets that Cohen held in the Essential Consultants Account or the Account. As of September 30, 2017?the date of the September 2017 Financial Statement?Cohen had 27 02.23.2012: Case Document 43-3 Filed 03/19/19 Page 28 of 67 approximately $673,729.95 in the Essential Consultants Account and $248,619.28 in the Account. As of October 6, 2017, the date when -1sl